A Knight’s Tale of Global Home Values

by Chicago Agent

The Knight Frank Global House Price Index collects home value data from across the globe.

The Knight Frank Global House Price Index, a massive, wide-ranging collection of data that operates as a Case-Shiller-esque index for the global housing market, was just released by Knight Frank, and it offers some startling revelations on how housing is performing in other parts of the world.

The story for the U.S. is the same as ever – very little change in prices throughout the third quarter, and a 3.9 percent decline from the third quarter of 2010. But what about prices in Hong Kong? India? Russia? Or the UK? Though variations exist, the averages, Knight Frank stated, display a reality U.S. Realtors are all to familiar with.

“During the third quarter of 2011, house prices fell in 54 percent of the countries monitored by the index and average price growth was zero,” Knight Frank reported. “The boom conditions experienced between 2004 and 2007 when global housing markets recorded double-digit annual price growth for 16 consecutive quarters are a distant memory. Average annual growth now stands at just 1.5 percent.”

Yet, certain areas are doing remarkably well, and unsurprisingly, the fortunes of those housing markets are tied directly to the health of the area’s general economy.

Hong Kong’s housing values, for instance, have grown rapidly the last year, rising by an incredible 19.3 percent, the highest of all the markets Knight Frank sampled. Also near the top of the heap were India, at 13.9, Taiwan, at 12.7, China, at 8.9, and Turkey, at 6.3 percent. All the aforementioned markets are associated with the EAGLE economies, or, “Emerging And Growth Leading Economies” that have been the crown in capitalism’s jewel the last few years.

The nation’s of Europe, however, tell a different story with their housing data, due in no small part to the debt crisis sweeping the Eurozone and threatening the very existence of the European Union. Germany and France, two of the stronger European nations, posted modest gains of 2.8 and 6.7 percent, respectively, while the following EU members had the following results: Sweden at 1.1; Finland at 1.3; Denmark at -0.5; Italy at -1.4; Greece at -4.1; Spain at -5.5; and finally, the worst performing housing market in the world, Ireland at -14.3.

Overall, Europe was the weakest performing region in the study, with prices falling an average of 0.5 percent in the past 12 months. Asia Pacific and South America were the two best performing regions, with respective gains of roughly 7.5 and 6.7 percent.

In its closing statements on the study, Knight Global was not particularly optimistic on the final quarter of 2011, stating that all of the worst economic indicators in the last month have yet to be reflected in quarterly data.

“Looking forward, house prices are likely to show little improvement in the final quarter of 2011 given that much of the unravelling of the Eurozone sovereign debt crisis took place post- September and has yet to be reflected in the index results,” the firm stated.

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