Global house prices slow as the UK jumps up world rankings
by Kasmira Jefford
Global house prices have increased for the eighth quarter in a row but the rate of price growth is now slowing, according to figures out today from Knight Frank.
Prices rose by 7.1 per cent in the year to March, according to the property agency’s Global House Price Index.
However the last quarter saw a slowdown in growth to 0.6 per cent compared with 1.2 per cent growth seen in the previous quarter.
Knight Frank’s head of international residential research Kate Everett-Allen said the first quarter was traditionally a quieter period because of buyers rushing to complete sales before the New Year when tax rules come into effect.
“When you look back at when the Index started in 1995, the first quarter is consistently the slowest quarter of the year. For example, 18 months ago with the fiscal cliff in the US there was a rush to complete sales to avoid that hike [in taxes],” she told City A.M.
Meanwhile the UK has jumped up the world rankings, from 34 in the first quarter last year to 12th place today on the back of London’s booming property market, now spreading to other parts of the country. Prices rose by 2.6 per cent in the first quarter compared with the prior three months and are up 9.1 per cent over the year.
Dubai topped the annual rankings for the fourth consecutive quarter, with house prices up 27.7 per cent in the year to the end of March. However prices rose by only 3.4 per cent in the first three months the year, signalling that efforts to cool the property market by capping mortgages and doubling transfer fees on the sale of property are paying off.
Of the 14 countries that posted a decline in house prices year-on-year, 12 of these were in Europe, including Croatia, Cyprus and Greece, which were the weakest-performing housing markets.
But while still in decline, Knight Frank said house prices in these markets are improving and falling at a slower rate. In Greece, for example, the decline in house prices slowed to 1.3 per cent in the last three months compared with a 4.5 per cent decline over the last two quarters.
Singapore and Japan were the only non-European countries to see prices fall.
“Cooling measures and tighter mortgage lending conditions have halted price growth in Singapore, whilst in Japan Abenomics has yet to push house price growth into positive territory,” Everett-Allen said.
“We expect to see the index’s performance strengthen again in the second quarter. All eyes will remain on central banks, in particular the Federal Reserve, the Bank of England and the European Central Bank. The issue is not when interest rates rise but the speed and extent to which they do,” she added.