The growth of house price inflation around the world slowed in the first quarter of 2014, according to new data from Knight Frank with annual growth recorded overall of 7.1%. Buyers often rush to complete sales before the New Year (which brings tax changes) which usually results in a quieter market in January to March, the report points out.

Some areas are experiencing a slowing of a growth spurt, like Dubai, which topped the annual rankings for the fourth consecutive quarter, with anual growth of 27.7%. However, prices rose by just 3.4% in the first three months of 2014, which is being taken as evidence that a doubling of transfer fees and a mortgage cap are having an impact on the Emirate’s property market. 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.

On the other hand, countries on the up include the US, Australia and Iceland, as all three countries now appear in the top ten rankings alongside key emerging markets such as China, Turkey and Brazil.

The bottom ten on the list almost constitutes a geographical tour of Eastern and Southern Europe although most of these declines are slowing, even in the weakest housing markets such as Croatia, Cyprus and Greece.

Knight Frank’s expert analysis says they expect to see the index’s performance strengthen again in the second quarter, interest rate rises nothwithstanding. All eyes will remain on central banks, in particular the Federal Reserve, the Bank of England and the European Central Bank; the issue remains not when interest rates rise but the speed and extent to which they do, the report concludes.

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