Knight Frank’s latest global house price index for 2007 contains some surprises, as countries which have been at the top of the price growth table for some time are beaten by newcomers, and the UK and US markets look to be stronger than much of the press would have it.

* Overseas property

Overall, global price growth is slowing, the report says, with the Baltic states, which have seen the most growth in recent years, cooling slightly. Latvia, which occupied the top spot for the past ten quarters, has been knocked off by Bulgaria, which has seen rapid construction, and marketing, particularly around the ski resort of Bansko.

In contrast to the end of the boom in some of the Baltic countries, the Asia Pacific region has seen robust growth. According to these figures, the only market which is not experiencing relatively strong rates of growth there is Japan, where prices are now falling at the slowest rate for years. The best performer in Asia Pacific is unquestionably Singapore, where prices have been rising steadily for the past three years.

In Australasia, both Australia and New Zealand have seen prices rise by over 10%, although growth in New Zealand is now slowing due to affordability issues.

South Africa comes in third place overall, with ongoing demand for coastal property driving price growth, although tighter mortgage lending is expected to slow this market following the introduction of the National Credit Act, which came into force in June.

The much-documented troubles in the US seem to have had little effect in Canada: growth still hovers around the 10% mark there, with major cities seeing the lowest levels of inflation. Indeed, the results for the US make for interesting reading: ‘Much has been made of the dire housing market prognosis in the US,’ says the report. ‘Despite this, the most recent data reveals that prices over the last year across the country have risen by 1.8%. Falls in Michigan, California, Nevada, Massachusetts and Rhode Island have been countered by continued price growth in Utah, Wyoming, Montana, New Mexico and Washington.’

In Western Europe we find mixed fortunes: the Irish market has finally turned, with prices falling around 1% year-on-year as the market corrects itself after a prolonged period of growth. In contrast Spain, which has had its fair share of bad press, has performed well, achieving overall growth of 5.3%.

The UK posted growth of almost 11%, most of which has been driven by London and the South East. Other European markets also remain robust: Norway and Sweden are doing extremely well and Iceland ? a new entry to the Knight Frank index ? comes fourth overall on the table, with growth of 14% despite interest rates there rising to 13.75%.

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global house pricesKnight Frank’s table of house price growth for Q3 2007