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Globally, houses turning cheaper: Knight Frank index

The rise in global house prices is slowing down, with average annual house price growth around the world falling to 3.1% in the third quarter of the year, down from 4.3% in the previous quarter, a survey shows.

business Updated: Dec 07, 2010 22:07 IST

The rise in global house prices is slowing down, with average annual house price growth around the world falling to 3.1% in the third quarter of the year, down from 4.3% in the previous quarter, a survey shows.

Knight Frank's global house price index shows the weakest region in the three months to the end of September was Europe, posting 0.8% house price growth, while Asia-Pacific was the strongest with average growth of 9.9%.

For the first time since late 2008, quarterly prices increased in each of the six world regions monitored by Knight Frank (Asia-Pacific by 9.9%, Middle East by 5.1%, North America by 4.2%, South America by 3.5%, Africa by 3% and Europe by 0.8%).

But annual growth in Europe ranged from 26.1% in Latvia to -13.9% in Lithuania and -14.8% in Ireland, while average house prices in the US now stand at their mid-2003 level, according to the estate agent.

It said the critical driver for weaker global performance was the number of countries “tipping back into negative growth” in the most recent quarter, with 14 (mainly European) countries notching house price falls.

Liam Bailey, head of residential research at Knight Frank, said there is now a growing gap between the less debt-afflicted European economies of Austria, France and Finland and their neighbours to the south and west of the continent, with Greece, Spain and Ireland ranking much lower in its global house price index.

“While a majority of countries are reporting positive annual growth, 56% saw prices fall in the third quarter this year,” Bailey said.