The Knight Frank Global House Price Index (GHPI), which tracks the performance of mainstream home prices worldwide, showed that global home prices dropped in 60 percent of the countries tracked by the index.
Knight Frank said if this trend continues to spread, the overall GHPI could fall into a negative level this year.
“A combination of global economic uncertainty, weak consumer confidence and strict mortgage lending criteria are dampening growth in Europe and North America while stringent government cooling measures in Asia Pacific are successfully curtailing house price inflation there,” it said.
According to the index, global home prices edged up 0.5 percent in 2011, but recorded a 0.3 percent slip in the final three months of last year, representing the index’s weakest quarterly performance since Q2 2009.
“This suggests that a return to significant house price growth around the world is some way off yet,” it noted.
Overall, all 12 of the bottom rankings are occupied by European markets, with Ireland taking last place, recording a 17 percent decline.
“However, not all European markets are in a moribund state. Estonia, Slovenia, Iceland, Norway, Switzerland and Germany achieved annual growth over five percent, despite the precarious state of the Eurozone’s sovereign debt crisis.”
Meanwhile, the GHPI showed that the top five countries recording the highest price growth over five years (Q4 2006 – Q4 2011) were China, Hong Kong (pictured), Israel, Singapore and Colombia. Singapore placed fourth with an overall increase of 50.5 percent over the five-year period.
“Asia’s downturn has proved highly influential,” said the firm.
“In 2007, China, Hong Kong and Singapore saw price rises of 42 percent, 21 percent and 33 percent respectively. Last year, growth was -2 percent, 11 percent and five percent.”
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