Global House Price Index - Fourth Quarter 2006 results

Slower global house price growth hides local market opportunities

There are two noticeable trends at work across global housing markets:

Firstly, price growth is slowly but surely beginning to decline in most locations globally. The impact of lower interest rates has led to sharply higher prices across Europe, Asia and the Americas. This upward trend in asset prices is moving to a close as interest rates either remain level or begin to rise.

Secondly the emerging economies are still dominating the top of the growth table - with the recent EU accession states being classic examples. Growth in prices here reflects wider mortgage market reform and rising wealth in expanding economies.

Liam Bailey, Head of Knight Frank Residential Research, comments: -

The next issue to consider is where next for prices? Too many people look to invest in the top growth location, (like Latvia) assuming that high growth will continue. It might be a more interesting and perhaps rewarding strategy to look at the bottom of the table and think which of these countries will see the next upturn.

For various reasons Germany has underperformed as a nation in housing market terms for a decade. We think investors could do well to look behind the headline figure and look more closely at some of the German sub-markets.

Courtesy: Knight Frank Residential Research