Growth in residential property prices around the world is slowing, according to the latest report from Knight Frank which found that globally, prices are rising by 7.8% per annum, as opposed to 9.6% 12 months previously. This slight slowdown has been attributed to rising interest rates and the tightening of lending criteria.
The agent also says another factor is almost a correction of unsustainable growth in some European countries, most obviously in Latvia, which still leads the table of inflation rates. Those considering rushing out to buy in Eastern Europe may be interested to know that the fall in property prices has been felt most in the apartment market, properties typically of interest to speculative purchasers.
The slowdown in global house price inflation is also bound to be affected by the recent difficulties in the US sub-prime market, as banks review their lending criteria. One of the European markets which has performed markedly less well is the Irish market, where prices this year were less than a percent higher than the same time in 2006, although Dublin continues to be exempt from outside influences and still outperforms the rest of the country.
Spain has also seen growth moderate slightly, although nationally growth still stands at 5% year-on-year, while Denmark, France, the Netherlands and Switzerland all saw property price inflation slowing, and the German market remains ‘in the doldrums’.
However there are some European countries which have performed well including Bulgaria, Estonia and the UK. In general, it is the nations outside Europe which have performed best this year so far: ‘Singapore has seen a spectacular improvement in its fortunes with house price inflation exceeding 20%,’ says the report ‘South African prices have continued to rise, as have those in New Zealand and Australia. In fact, of the non-European nations in the table, only the US and Japan are lagging behind.’