Following a rise in global house prices over the previous eight consecutive quarters, the rate of price growth slowed in the first three months of 2014, according to the latest Knight Frank Global House Price Index.

Following a rise in global house prices over the previous eight consecutive quarters, the rate of price growth slowed in the first three months of 2014, according to the latest Knight Frank Global House Price Index.

The index revealed that house prices rose by 0.6 per cent in the first quarter of 2014, down from 1.2 per cent in the previous quarter. Despite this fall, annual growth was 7.1 per cent.

However, Knight Frank pointed out that this may be because in the the final quarter of the year there is often a peak in sales transactions as buyers rush to complete sales before the New Year when new tax rules often come into effect, leading to a quieter market in the first quarter.

Knight Frank said that Dubai topped the annual rankings for the fourth consecutive quarter and recorded price growth of 27.7 per cent in the last year to the end of March. Despite this, prices rose by only 3.4 per cent in the first three months of 2014, evidence that the doubling of transfer fees and mortgage cap are having an impact on the Emirate’s property market.

The US, Australian and Icelandic housing markets also showed a turnaround, appearing in the top ten annual rankings for price growth alongside key emerging markets such as China, Turkey and Brazil. The pace of price growth in the US slowed slightly in the first quarter with prices rising on average by 10.3 per cent on an annualised basis, down from 11.3 per cent last quarter.

The bottom 10 rankings were dominated by countries from eastern and southern Europe. House prices here, while still in decline, are now falling at a slower rate even in the weakest housing markets such as Croatia, Cyprus and Greece.

Singapore and Japan are the only non-European countries in the bottom 14 rankings. Cooling measures and tighter mortgage lending conditions have halted price growth in Singapore, whilst in Japan “Abenomics” has yet to push house price growth into positive territory.

“We expect to see the index’s performance strengthen again in the second quarter. All eyes will remain on central banks, in particular the Federal Reserve, the Bank of England and the European Central Bank. The issue is not when interest rates rise but the speed and extent to which they do, said Kate Everett-Allen, head of international residential research at Knight Frank.