Global house prices were flat in the third quarter of 2011, the weakest performance since 2009, as the escalating eurozone debt crisis hit confidence around the world.
According to the Knight Frank Global House Price Index, average values fell in more than half of the 51 countries monitored in the index during the third quarter.
The estate agency warned that the latest figures are the weakest since the second quarter of 2009.
“The third quarter saw mounting pressures on the global economy with politicians seemingly helpless to get to grips with the eurozone debt crisis,” said Kate Everett-Allen of Knight Frank.
“This has reawakened fears of a double dip recession, not just in Europe but around the world,” said Ms Everett-Allen.
Global values rose by 1.5 per cent in the 12 months to September, in spite of annual growth of as much as 20 per cent in some Asian countries. Knight Frank believes prices are unlikely to improve in the final quarter of 2011, with values potentially falling by the end of the year.
According to the index, average house prices in Hong Kong have seen the biggest growth over the last 12 months. Values rose by 19.3 per cent over the year but fell 1.1 per cent during the third quarter.
Ireland has seen the biggest decline over the past year. Average property prices have fallen by 14.3 per cent and as much as 3.8 per cent in the third quarter.
Meanwhile, Spain, where property prices have plummeted since the economic downturn due to a huge oversupply of new-build homes, saw annual average prices fall by 5.5 per cent.
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