The 2015 Global House Price Crash Accelerates

Housing markets are prone to the bandwagon effect, they continue rising when the fundamentals vanish, a year, maybe two years before. Stock market and commodity price volatility and declines are currently chronicled ad-nausea by the press without seeing the dramatic upswing of international property price falls. What is alarming is the pace of price declines. Even countries where prices are not falling, many are witnessing a rapid deceleration in price growth.

As China supplants Greece as the world’s key economic concern, and emerging markets look increasingly anaemic, there is a global quest for growth which is evident at a macroeconomic level but also when analysing house price performance.

In annual terms the Knight Frank Global House Price Index rose by only 0.1% in the year to June, its weakest rate of growth since the final quarter of 2011. Of the 56 housing markets tracked, 27% recorded an annual decline in prices, but it gets worse.

Europe is no longer the weakest- performing world region, a title it has held for 15 consecutive quarters.

Contrary to all of that — here is a headline from Global Property Guide; “The global house price boom continues ever more strongly. House prices rose in 25 of the 38 world’s housing markets”. It was published June 15 2015. It fails to properly point out that the data set used was Q1-2014 to Q1-2015. That’s not only history, it’s not relevant, especially to the speed of what is currently unravelling.

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