Global house prices fell for the first time in two years during the last quarter of last year, according to Knight Frank’s Global House Price Index Q4 2014.
The latest data from the real estate firm underlines not only the fragility of the global economic recovery but the extent to which it is filtering through to buyer sentiment, it noted.
The Global House Price Index, which is weighted according to each country’s GDP, rose by 1.8 percent during 2014 but slipped by 0.6 percent in the final quarter of the year, representing the index’s weakest performance since the third quarter of 2012.
Asia was the second weakest-performing region in the world last year, with prices rising on average by 3.3 percent.
According to Knight Frank, 2015 will be dominated by two monetary policy decisions – one past and one future. Firstly, the extent to which the ECB’s new QE programme will stimulate the Eurozone’s housing markets and secondly, the timing of the U.S. Federal Reserve’s rate rise.
Kate Everett-Allen, International Residential Research at Knight Frank, said: “In 2015, the focus is not just to the extent to which the U.S. market is able to absorb an interest rate rise but the impact on those markets whose currencies are pegged to the dollar.”
The Knight Frank Global House Price Index, established in 2006, allows investors and developers to monitor and compare the performance of mainstream residential markets across the world. The index is compiled on a quarterly basis using official government statistics or central bank data where available. The index’s overall performance is weighted by GDP and the latest quarter’s data is provisional pending the release of all the countries’ results.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
