Will the surge in house prices end with a bang or just fizzle out?

The current rate of increase has to slow down – but the hard thing to figure out, writes Hamish McRae, is when

House prices have gone up in nations around the world (PA Archive)

The global surge in house prices must inevitably come to an end. But we don’t know when that end will come, or whether it will come with a crash or simply fizzle out.

Just about everywhere prices are rising faster than both consumer prices and personal incomes. According to estate agents Knight Frank there are just four out of the 56 countries they surveyed where the price of residential property have actually fallen over the past year. They are Malaysia, Morocco, India and Spain, with Spain down 1.8 per cent.

At the other end of the scale Turkey is up 32 per cent, New Zealand 22.1 per cent and Luxembourg 16.6 per cent. The US comes in at 13.2 per cent, the UK at 10.2 per cent – the figures are for the year to the end of March and according to Nationwide, in May the UK annual increase had climbed to 10.9 per cent.