The latest release of the Knight Frank global house price index is yet more negative news for us to pour over. According to the report global house prices grew by just 0.9% in the year ending Q1 2012, which is the weakest performance recorded by the index since the depths of recession in 2009. Global house prices were flat on the quarter but this is the first time growth has been below 1% on the year since Q4 2009.
The report cites a number of factors for the weak performance, including the European debt crisis which is again apparently taking a turn for the worse, as well as the Asian cooling measures, and continued uncertainty over whether or not the global economic recovery is solid, made worse by the IMF's decision to reduce its forecasts for global GDP growth from 4% to 3.3% for this year.
Of course it is not bad news everywhere. Brazil property prices grew 23.5% in the year ending Q1 2012 according to the report, although this will increase suspicions that Brazil is now at risk of a bubble. Estonia continues to impress in 2nd place on the table with growth of 13.9% over the past year.
Ironically, for Europe being at the heart of the report for all the wrong reasons, Europe continues to be a dominant force in the top 10 countries in terms of price growth. Apart from Estonia in second we have Austria in 4th with prices up 11% on the year, Germany in 5th with 9.8%, Turkey in 7th with 8.7%, Russia in 8th with 8.2% growth over the last year, and finally Iceland in 9th with prices up 7.3% in the last year – that is 6 out of the top 10 countries for a troubled Europe. That really speaks volumes about what sums up the current status of the recovery, which is pretty much how it has always been, patchy and volatile with bright spots here and there.
- Wednesday 06 June 2012