Global House Price Index - First Quarter 2007 results
Global residential markets remain strong despite US housing downturn
The Knight Frank Global House Price Index, the most authoritative guide to the performance of international housing markets, reveals that the downturn in the US market has not as yet affected other national housing markets. On an unweighted basis prices around the world are rising by 9.60% per annum compared to 9.63% 12 months ago.
Latvia still tops the world price growth list, however it appears that recently the number of transactions (particularly apartments) in Riga has begun to slow. Around 1,200 transactions occurred in February, compared to 1,600 in January. Price rises in other cities have exceeded that of Riga (Sigulda 5% growth in March alone).
While Germany's market appears to be performing relatively poorly, the latest quarterly data suggest that there has been a turn around in the fortunes of the German market and while prices now may be lower than at the same point 12 months ago, prices compared to the last quarter of 2006 have actually risen by 1.8%.
Growth across a number of Western European markets has slowed - notably in Ireland and Denmark, marking a return to more sustainable rates of growth from the 15% and 24% growth seen in these countries respectively to Q1 2006. However, strong growth has continued in the UK, primarily driven my gains in the London and South Eastern Markets.
Despite recent negative press, the Spanish market continues to record growth, albeit this growth is slowing and in some local markets, growth has all but stalled.
US house price inflation has picked up slightly, following the widely reported slump at the end of last year, and although year-on-year price inflation has fallen from the same point a year previously, quarter on quarter growth accelerated to 2.5% from 1.6% to Q4 2006.
Although price growth remains strong in Riga, the volume of transactions has started to decrease, particularly in the first quarter of 2007. In 2006 there was an average of 10,000 transactions per month in the city. During the first quarter of this year the total was closer to 7,000 per month.
Courtesy: Knight Frank Residential Research