House prices around the world have seen their weakest year since the GFC.
Australia is not alone in its house price woes, with the Knight Frank Global House Price Index seeing only 0.9% growth for the year to March 2012. The result is the worst since 2009, during the depths of the GFC. It marks the first time since the GFC that the index has fallen below 1%.
Knight Frank said conumer confidence worldwide had taken a hit due to the European debt crisis, along with the IMF decision to downgrade global GDP forecasts. House prices across Europe remained flat over the year, with Ireland taking the biggest hit with a 16.3% decline.
Closer to home, the Asian housing market has cooled off as well. In 2010, Asian house prices exceeded 16% in annual growth. The region's growth still exceeds the global average, but is now closer to 2%.
"The Chinese housing market has had a tough 12 months as developers and purchasers alike have had bank finance squeezed as a consequence of the on-going cooling measures. Lending restrictions, new taxes, the curbing of multiple property purchases, and new regulations to restrict the inward flow of hot foreign money have had the desired effect," Knight Frank director of research in Asia Nicholas Holt said.