By the start of the last quarter of 2008, the credit crunch was felt in various industries but it is argued to have started in the housing industry. Mortgage companies were struck fatally by the subsequent financial crisis resulting in negative effects in the property industry, not only in one country but in the whole world. This is evidenced by the downfall of the real property market not only in third world countries, but also among the richest and most developed countries.
The aforementioned downturn in the real property industry is supported by the report provided by Knight Frank Global House Price Index that showed a decline in property prices by 1.0% in the last quarter of 2008 compared to its preceding period. This report does not include figures for Dubai, as the emirate is considered a new entrant. European countries such as Lithuania, the U.K., and Norway, and also Canada show the biggest downturn in property prices by as much as 5% in just three months. On the brighter side, Russia and a handful of European countries are still performing well in the third quarter with the figures for the Czech Republic even on the rise.
The global financial crisis has shown different effects in different industries. The real property industry has suffered the most but the degree of downturn is dependent on the location, as some countries had this crisis in lesser intensity. In addition, the crisis in the real property industry is also dependent on other factors such as stock performance and the prevailing attitudes of the market toward it.