Real estate investors literally stopped buying and selling property in the final quarter of 2008, as global property transactions fell by a staggering 80 percent.
According to preliminary data from Real Capital Analytics, the US was one of the hardest hit countries during the closing stages of the year, with real estate sales and purchases down 88 percent in the three months to the end of December 2008 compared to 12 months earlier.
India followed with property transactions down 87 percent in the final three months of 2008, compared to 12 months previously.
The best performing region in the world during the fourth quarter was Eastern Europe, where property trades fell by just half.
Overall, global property transactions during 2008 were down 59 percent, with the US, Australia and New Zealand taking the hardest knocks. Just $495.9 billion of property was traded globally in the past 12 months compared to $1,036 billion in 2007.
According to RCA, property deals in the US in the 12 months of 2008 were down 75 percent, while Australia and New Zealand were down 76 percent. In the UK, sales and purchases were down 60 percent for the year, compared to a 48 percent fall in Western Europe over the same period.
Only one region, the Middle East, showed any gains during the whole of 2008 – with transactions up 73 percent overall. However, even the Middle East was severely impacted by the economic crisis in the final three months of 2008, with property transactions down 62 percent compared to the same period in 2007.
Entity-level real estate trades were the most affected, which were off 99 percent in the fourth quarter and 83 percent in 2008. One-off and portfolio transactions were down 50 percent and 64 percent respectively for the whole of 2008.