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European performance weighs on global housing markets

The Eurozone’s 17 member states have on average seen prices fall by 1.8% in the 12 months to September. Other world regions such as South America and Asia Pacific have seen growth of 9.8% and 4.2% respectively.

Greece has now pushed Ireland off the bottom slot – where it has resided for five consecutive quarters – by recording an average price fall of 11.7% in the last year. Ireland, by comparison, has seen its rate of decline improve, up from -14.3% a year ago to -9.6%.

Despite positive data from the US – prices are 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 – the US fiscal cliff casts significant doubt on this recovery. 

Asia’s 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.

Six markets recorded double-digit annual price growth in the year to September; Brazil, Hong Kong, Turkey, Russia, Colombia and Austria.

Kate Everett-Allen, International Residential Researcher at Knight Frank, said: “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. The current period of stagnation looks set to continue well into 2013.”

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