Knight Frank reports that Brazil has experienced record-breaking residential real estate prices, but market growth is slowing. The same is true of many global markets as the world continues to reel from the financial crisis, but Brazil is one of only six global markets to see double-digit price growth through the year ending in September, by a margin of 15.2%. European house prices are still struggling, however, due multiple recessions stemming from the debt crisis, while the U.S. continues to enjoy a modest housing market recovery. For more on this continue reading the following article from Property Wire.
Brazil has recorded the highest annual increase in prices, up 15.2% year on year, but the pace of growth is slowing in residential real estate markets across the globe.
The latest global house price index from Knight Frank shows that overall house prices in mainstream residential markets increased by just 0.1% in the three months to the end of September and by 1% in the last 12 months.
It means that mainstream global property prices stand just 5.2% above the lows hit in the wake of the financial crisis in the second quarter of 2009 The international real estate firm says that this stagnation is likely continue well into 2013.
Six markets, Brazil, Hong Kong, Turkey, Russia, Columbia and Austria recorded double digit annual price growth in the year to September and Europe was the only world region to see prices decline, the index shows.
The Eurozone’s 17 member states have on average seen prices fall by 1.8% in the 12 months to September, Greece is positioned at the bottom of the rankings, with a 11.7% decline in prices. Greece has now pushed Ireland off the bottom slot where it has been for five consecutive quarters. Ireland has seen its rate of decline improve, up from -14.3% a year ago to -9.6%.
‘With the Eurozone now in its second recession in three years buyer confidence is at an all time low and it is no coincidence that all the bottom 12 rankings are occupied by European countries this quarter,’ said Kate Everett-Allen, of Knight Franks international residential research department.
South America has seen growth of 9.8% and Asia Pacific is up 4.2%. But the markets in Asia Pacific are slowing. ‘Looking east, Asias policymakers are offering little hope of an Asian driven recovery. China’s new leadership looks set to continue with stringent property cooling measures and new lending restrictions in Hong Kong are likely to limit the availability of credit,’ explained Everett-Allen.
The United States is showing signs of growth. Prices are now 3.6% higher than in the third quarter of 2011, vacancy rates are at their lowest level since 2005 and housing starts are up 49% year on year.
But Everett-Allen warns that the US fiscal cliff, the crunch point when tax benefits are due to end and spending cuts commence at the end of 2012, could extinguish this hope.
‘In summary, confidence, affordability and debt are constraining Europe. Strict lending and the looming fiscal cliff may dent the early signs of growth in the US while regulatory measures in Asia are keeping housing markets in check,’ she said.
‘The current period of stagnation looks set to continue well into 2013,’ she added.
This article was republished with permission from Property Wire.