Estonia has experienced the sharpest annual rise in house prices of any country in the world in the first quarter of this year.
The Baltic state has seen house prices grow by 17 per cent compared to the first three months of last year, research by Knight Frank estate agents shows.
It led the growth table from Denmark and New Zealand, which enjoyed annual house price rises of 16.1 per cent and 13.5 per cent respectively.
Propping up the table at the other end is Serbia-Macedonia, which has seen house prices fall 10.3 per cent during the last twelve months.
Hong Kong and Japan, with annual falls of 6.6 per cent and 2.6 per cent respectively, are also near the bottom.
The Hong Kong housing market has suffered a sharp reversal of fortunes, having recorded annual growth of 23 per cent in early 2005.
This index is the first serious attempt to analyse house price trends across the globe, and covers 29 countries.
To compile the index, Knight Frank has used official national statistics or those from a respected national financial institution such as a large mortgage provider.
"Those familiar with the UK residential market will be surprised to learn that not every nationality finds house prices a subject for fascination," said Liam Bailey, Knight Frank's head of residential research.
"This unfortunately means there is a resulting lack of data to assess market movements in many countries. Even tracking basic data on house prices within the European Union can be problematic."
In the Baltic states of Lithuania, Latvia and Estonia, for example, Knight Frank has used the findings for the capital cities as a proxy for the wider national market.
The index shows that globally, house prices were 6.1 per cent higher at the end of March compared to the same period 12 months earlier.
The property market has slowed down considerably from its recent peak in 2004, when prices were growing on average by 10.9 per cent per annum.
The UK's current annual growth of 5.3 per cent puts it in 14th position – halfway down the table.
"The most notable trend is that house price growth is slowing across the globe," said Mr Bailey.
"The early boom in house prices was led by the UK and Ireland in the second half of the 1990s with Australia catching up in 2000. As the 2000s progressed, more and more countries saw house prices rise strongly, including the majority of the European Union, South Africa, and latterly the US and New Zealand."
Mr Bailey picked out Germany and Eastern Europe as the places likely to see house price growth in the near future.
"We believe that stronger than anticipated economic performance will lead to above average performance in Germany in 2007.
He added: "The process of 'levelling up' in Eastern Europe will carry on apace over the next five years with average prices in most of these states coming close to the EU average."
Annualised house price growth by country
Country 2006 Q1
Estonia 17.0%
Denmark 16.1%
New Zealand 13.5%
Bulgaria 12.5%
South Africa 12.1%
Spain 11.6%
Ireland 10.7%
US 10.7%
France 9.3%
Sweden 8.5%
Latvia 8.3%
Lithuania 8.0%
Greece 7.9%
Italy 7.2%
UK 5.3%
Canada 5.2%
Belgium 5.1%
Finland 4.7%
China 4.7%
Netherlands 4.0%
Singapore 3.8%
Australia 2.6%
Switzerland 2.3%
Portugal 2.1%
Austria 1.7%
Germany 0.2%
Japan -2.6%
Hong Kong -6.6%
Serbia-Macedonia -10.3%
Table source: Knight Frank
For European and indeed Global Properties www.OverseasPropertyOnline.com
