Better than expected economic recovery and cheap borrowing costs delivered by globally co-ordinated government liquidity measures have helped lift the cloud of uncertainty hanging over some property markets. But property watchers warn the recovery in confidence that was shattered by the outbreak of the US subprime credit crisis late last year remains fragile. It is also confined to a relatively few key markets, they add, and elsewhere in the world the recovery in property markets could be delayed until the end of next year. For those with an appetite for risk, however, now would be an opportune time to search for discounted premium assets to upgrade the quality of their portfolios, said Nicholas Brooke, chairman of Professional Property Services Group. Renewed hope of an early stabilisation to the global financial crisis triggered by the collapse of the subprime lending market in the United States has lifted sales volumes in some markets and also prompted some developers to dust off projects put on hold last year. That, in turn, has helped lift the share prices of developers following their steep declines last year. In Britain, the non-seasonally adjusted average asking price for a home rose 0.6 per cent this month to GBP227,864 (HK$2.91 million) after a 0.4 per cent fall in June, meaning prices have risen for five months out of seven so far this year, says property website Rightmove. And in London, the average sales price of GBP402,761 was up 1.4 per cent on the previous month and 0.6 per cent on the same month last year due to a shortage of properties for sale, Rightmove said in its report. In the US, housing starts unexpectedly rose in June as construction of single-family dwellings jumped the most since 2004. Many Asian markets, meanwhile, including Hong Kong and the mainland, are witnessing a recovery in demand fuelled by increased bank lending and low mortgage rates. Shayne Harris, divisional director for residential sales in Savills Australia's New South Wale office, said there were signs of a selective recovery of the property market in Australia. In Sydney the recovery was based on price bands rather than geographical location. Mr Harris had earlier predicted prices would not hit bottom until late 2011 or early 2012. But an increase in the government's First Home Buyer Grant from September, along with record low interest rates, rapidly rising rents and a shortage of listings, have accelerated the recovery. 'It is fair to say that economic recovery may come faster than experts have forecast and therefore we may see property markets rebound quicker than expected,' said Mr Brooke. In a recent report the International Monetary Fund said it expected the British economy would grow by 0.2 per cent next year, up from a forecast of a 0.4 per cent contraction it made in April. The IMF also said the US economy would recover more strongly and more quickly than it previously thought. It now believes the world's largest economy will grow by 0.75 per cent next year, rather than the zero per cent it forecast earlier. 'Commercial markets in the UK have sensed that prices are at or near the bottom,' said David Watt, chairman of DTZ North Asia. 'Repricing has occurred and some debt is being made available for investment purchases but not always by traditional means.' Prices in residential markets in the US and Britain were still retreating, Mr Watt noted, but the rate of decline was slowing and investors foresaw a bottom being reached in the next few months. In the US the commercial market still had a lot of refinancing issues to get through over the rest of this year, however, so it was difficult to call a bottom to this sector yet. 'I can confirm that in my view, certainly in London, the market for prime property has now - in your words - 'bottomed out',' said Jeremy Helsby, chief executive of Savills Group. 'However, this is a very small part of the market and anything that is not prime is not selling,' he warned. 'Certainly in Europe I believe values still have further to fall and probably the same applies to the US,' he said. Among some investors the glimmer of recovery is being taken as a bargain-buying opportunity. Mr Brooke said Britain was probably a prime target of such attention and the focus would primarily be on London, with peripheral interest in Manchester, Birmingham, Liverpool and Leeds. 'There is also some interest in the strata-title office market in Sydney and in small office investments in Japan if you are prepared to borrow yen and accept a currency exposure,' he said. Last month, a survey of 73 investors, fund managers and fund of funds managers showed they ranked China, Australia and Japan as the three most appealing locations. The survey was conducted by the Asian Real Estate Association together with its partners.