The global market for residential real estate has reached its weakest point since 2009, new research published by Knight Frank has revealed. According to the firm, house prices around the world increased by just 0.1 per cent during the second quarter of the year, with annual growth standing at 1.7 per cent. Although the global picture remained in positive territory, Europe and North America experienced declines of 0.1 per cent and 0.9 per cent respectively over the 12 months to June. At the other end of the spectrum, Asia was the top performing region, recording rises of eight per cent in the same period.
Knight Frank highlighted Hong Kong in particular as contributing to the strong growth in Asian markets, with the residential sector here up by 26.5 per cent over the course of a year. However, the firm noted that efforts among governments in the region to slow price growth appear to be having the desired effect, with Singapore, India and China among the nations to see house values moderate or even decline during the second quarter of 2011.
Developed nations in particular are struggling, the report noted, citing factors such as restricted lending, low consumer confidence and constrained household budgets as contributing to the problem. Countries experiencing the biggest falls in value included Russia, Ukraine, Ireland, Cyprus, Bulgaria and the US.
Last month, head of real estate at Standard Life Investments David Paine stated that global property remains "an attractive component of a diversified, multi-asset portfolio", adding that the sector is expected to be "resilient" during the ongoing economic difficulties. He described Asian markets in particular as being "buoyant", noting "the region's robust underlying growth dynamics are expected to continue to underpin real estate markets". Mr Paine was less optimistic about the prospects of the European and US markets, pointing to a movement among investors towards prime assets as they look for "safe haven" locations.