Prices increased by 0.6% in the first quarter of this year compared with 1.2% in the last quarter but the index still recorded annual growth of 7.1%.
Knight Frank pointed out that the final quarter of a year often sees a peak in sales transactions as buyers rush to complete sales before the New Year when new tax rules come into effect, leading to a quieter market in the first quarter.
Dubai, which topped the annual rankings for the fourth consecutive quarter, recorded price growth of 27.7% in the year to the end of March. However, prices rose by 3.4% in the first three months of 2014, evidence that the doubling of transfer fees and the mortgage cap are having an impact on the Emirate’s property market.
The turnaround in the US, Australian and Icelandic housing markets is evident with all three countries now appearing in the top 10 rankings for annual price growth alongside key emerging markets such as China, Turkey and Brazil. The pace of price growth in the US slowed slightly in the first quarter. Prices rose on average by 10.3% on an annualised basis, down from 11.3% last quarter.
The bottom 10 rankings reads like a geographical tour of Eastern and Southern Europe. House prices here, while still in decline, are now falling at a slower rate, even in the weakest housing markets such as Croatia, Cyprus and Greece.
For the first time since 2008 no single country tracked by the Global House Price Index has recorded an annual price fall in excess of 10%.
Singapore and Japan are the only non European countries in the bottom 10 rankings. ‘Cooler measures and tighter mortgage lending conditions have halted prices growth in Singapore whilst in Japan house price growth has not yet reached positive territory,’ said Kate Everett-Allen, of Knight Frank’s international residential research team.
‘We expect to see the index’s performance strengthening again in the second quarter. All eyes will remain on central banks, in particular the Federal Reserve, the Bank of England and the European Central Bank. The issue is not when interest rates rise but the speed and extent to which they do,’ she added.