Australia slips to 32nd place while Asia remains strong in house price index: Knight Frank
Global house prices rose 0.1% in the three months to June 2011, contributing to annual growth of 1.7%, according to Knight Frank’s latest global house price index, which concluded the global housing market was at its weakest since 2009.
Headed by the world’s hottest property market, Hong Kong, where prices grew 26.5% in the past year, Asia continues to outperform all other regions. With prices up 8% in the year, Asia has been the top-performing continent for seven consecutive quarters.
House prices declined in 23 of the 50 countries monitored by the index in the last three months, according to Liam Bailey, the head of Knight Frank Residential Research.
With a 1.9% decline over the year and 0.1% decline in the June quarter, Australia has slipped to 32nd position. During the March 2011 quarter Australia was ranked 28th. Just a year ago in the March quarter 2010, Australia peaked as the fourth-fastest-growing property market in the world after a 20% price annual jump.
In the latest index both North America and Europe remain the weakest performing world regions, where prices declined by 0.9% and 0.1% respectively over the year.
“This weak performance shows the extent to which many of the world’s economies are struggling in the wake of the 2008-09 global crisis,” says Bailey.
Confidence remained low and households’ disposable income is waning, Bailey notes.
The slight overall fall in prices was partly attributed to the absence of double-digit annual price growth in China, Singapore and India.
“There are clear signs that Asian policy measures, aimed at cooling asset price growth are having some success,” Bailey says.
“Annual price growth in Singapore stood at 6.7% in quarter two in 2011, down from 37% a year earlier.
“Similar patterns are emerging in India and China, which both recorded quarterly price falls in the three months to June, of 1.7% and 0.1% respectively.”
Hong Kong also slowed during the second quarter of 2011, with its quarterly price growth of 3.5% down from 10.1% in the previous quarter. “Looking forward it is difficult to be positive about price prospects in the developed world’s mainstream housing markets.
“Ongoing low interest rates and other market support measures are likely to spur increased sales activity rather than price growth,” Bailey says.
The Knight Frank Global House Price Index was established in 2006.
