Global house prices fell by 0.6% in the final quarter of 2014, according to Knight-Frank’s latest Global House index. Although prices rose by 1.8% in the year overall, this is the first quarterly fall for over two years, and casts doubt on the strength and durability of the worldwide economic recovery.
Reasons cited for the slip included a general slowdown in economic growth, specifically falling oil prices and the parlous forecast for the Chinese economy. Global political unrest was also blamed, with the crisis in Ukraine and tensions between Greece and the EU having a particular effect.
Europe saw the slowest growth out of all global regions, with house prices rising on average by 1.6% over the year. The US saw an average price rise of 4.8% on a family home, though this was less than the 6.2% growth recorded in the previous quarter. Ireland’s house prices were 16% higher than at the start of the year, but in Ukraine prices fell by 17%.
‘The current mismatch between demand and supply is behind the fall,’ said Knight-Frank’s head of international research, Kate Everett-Allen. ‘Residential sales have fallen sharply in recent months and there is a steady stream of new schemes reaching completion, which in turn is exerting downward pressure on prices.’
‘Fewer countries are reaching the heights of double digit price growth but it’s not all bad news. No country has recorded an annual fall in house prices in excess of 10% for three consecutive quarters, suggesting a slight convergence in the performance of the 54 housing markets tracked.’
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