Global house price inflation slows

New research from Knight Frank has found global house price inflation has continued to slow in the first quarter of 2008.

Average house price inflation in global markets stood at 6.1 per cent for the first quarter, compared to 9.2 per cent in final three months of 2007.

Bulgaria again tops the index as the country with the greatest annualised price growth, with average prices up 31.5 per cent.

"Bulgaria continues to confound market fears of oversupply and has so far proved immune to the deceleration seen in much of the continent," explained Knight Frank's head of research, Liam Bailey.

Iceland is another surprisingly strong performer, with growth of 19.1 per cent.

However, the overall picture is one of a depressed market.

"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," said Mr Bailey.

The Baltic region remains in the doldrums, noticeably Latvia and Estonia, with difficult economic conditions, evident in high rates of national debt, partially to blame for woes.

In Latvia prices appear to be in freefall, with negative price inflation of 20 per cent, down from over 60 per cent growth during the same period in 2007.

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.

Research released earlier this week by Standard and Poor's S&P/Case-Shiller home-price index finds American house prices were down 14.4 per cent over the last year.

Outside Europe, Singapore and Hong Kong continued to outperform the market, as did Russia, Australia, and China.

Chris O'Toole