• Global house price inflation in Q1 2008 stood at 6.1%, compared to 9.2% in Q4 2007
• Bulgaria, again tops the index as the country with the greatest annualised price growth (31.5%)
• Latvia prices appear to be in freefall, with negative price inflation of -20%, down from over 60% growth during the same period in 2007
• Outside Europe, Singapore and Hong Kong continued to outperform the market, as did Russia Australia, and China

Overview:

Residential property price inflation continued to slow in the first quarter of 2008, falling to 6.1%, compared to the 9.2% recorded the previous quarter and 9.8% over the 12 months to Q1 2007. The number of markets where prices have fallen has increased, and although there are still locations where price growth is in double figures, at the moment they are the exception rather than the rule. A year ago, 35% of the markets covered by Knight Frank in the Global House Price Index saw house price inflation in double figures. In Q1 2008, this proportion had fallen to just 20%. The geography of the best performing markets is not so clearly delineated as in previous years, when we might have been able to say that growth was strongest in the Far East, or Central and Eastern Europe. Today, the top performing markets are dispersed around the world, with Bulgaria, Singapore, Hong Kong and Jersey being the locations with the highest growth rates.

Liam Bailey, Head of Residential Research, Knight Frank, says:

“The Knight Frank Global House Price Index shows that while house price growth in Europe and America continues to slow or even fall, pockets of strong growth remain. “Bulgaria continues to confound market fears of oversupply and has so far proved immune to the deceleration seen in much of the continent. Iceland is another surprisingly strong performer with growth of 19.1%. The Baltic region remains in the doldrums, noticeably Latvia and Estonia. Difficult economic conditions, evident in high rates of national debt, are partially to blame for the Baltic woes. The US also continues to experience difficulties, while the far-eastern cities of Hong Kong and Singapore are bright spots on the residential investment horizon. “The country by country summary that follows provides an insight to the shifts currently taking place in house prices across the world.”