The Global House Price Index tracks the movement in mainstream residential prices across 56 countries and territories using official data from National Statistics Offices or Central Banks.
Although still in positive figures, the Global House Price Index registered only 3.4% annual growth, down from 4.2% last quarter. This represents the index’s lowest rate of annual growth since Q3 2012. From trade wars (US/China and Japan/South Korea) to Brexit, from political protests to weakening economic forecasts, headwinds are mounting and weighing on buyer sentiment despite a raft of interest rate cuts in the last three months.
China leads the index for the first time since 2010. At 10.9%, China’s growth represents the index’s lowest ranking top performer since Q1 2009. China leads due to Slovenia and Latvia, last quarter’s frontrunners, slowing at a faster rate.
Perhaps counterintuitively, this quarter also saw the highest percentage of countries and territories (93%) register either flat or positive price growth year-on-year since 2009.
In short, more locations are registering price rises year-on-year but their average rate of growth is slowing.
A look at the world’s largest advanced economies, the G7, which recently held its 45th summit in Biarritz, shows that all members apart from France saw their rate of growth slow in the last twelve months, but only Italy registered a decline in prices over this period.
The UK has slipped from 36th place a year ago to 48th place in the global rankings as uncertainty surrounding Brexit mounts. However, it remains a highly localised market, with some cities including Birmingham, Plymouth and Cardiff outperforming the average and evidence of pent-up demand building at the prime end of the market.
Only four markets registered a decline in annual prices – Morocco, Italy, Finland and Australia. However, with two interest rate cuts this year, new lending stimulus in place and prices bottoming out, we expect Australia to rise up the rankings in the second half of 2019.