The Knight Frank Global House Price Index, which tracks the performance of mainstream house prices worldwide, rose by just 0.5% in 2011 and recorded a 0.3% fall in the final quarter of the year, according to Knight Frank international researcher Kate Everett-Allen.

Brazil…

Everett-Allen said that the same trend looks set to increase in 2012, with values falling in Europe and Asia, and prices in Brazil and other areas of Latin America rising.

“Brazil, a new addition to the index this quarter, tops the rankings with 26% price growth in 2011. This remarkable performance is being fueled by strong population growth, rising household wealth and an expanding mortgage market.”

Curiosity: the gap between the top (Brazil + 26%) and bottom (Ireland -17%) performers in the index was 43%.

The rank…

Global prices to fall…

In the final quarter of 2011 prices fell in 60% of the countries covered by the index. If that trend spreads to more locations, the overall Global House Price Index could easily slip into negative territory during 2012, especially if the slowdown in Asia continues.

Kate Everett-Allen  explained: “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.”

Asia slowing down…

Asia’s downturn has proved highly influential. In 2007 China, Hong Kong and Singapore saw price rises of 42%, 21% and 33%, respectively. Last year, growth was -2%, 11% and 5%.

What the index makes clear is that the performance of global housing markets is far from uniform. While there is some cause for localised optimism, the overall trend for 2012 at least is unlikely to be positive.

Full report can be downloaded below…
Global House Price Index Q4 11

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