Australia slips to 44th from fourth in past two years in world house price growth rankings: Knight Frank

With a 4.5% annual drop in house prices, Australia now ranks 44th in the world for house prices.

Overall global house prices were static in the first three months of 2012, the first time since late 2009 that annual price growth has slipped below 1%, according to the latest Knight Frank Global House Price Index.

The index traces price movements across 53 countries. Australia was 32nd in September last year and 28th in June 2011.

Australia peaked as the fourth-fastest-growing property market in the world after a 20% price jump in the year to March 2010.

Ireland (down 16.3%), Greece (down 9.8%) and Portugal (down 8.6%) were the worst international performers, with house prices down in 58% of the countries on the index.

There was 0.9% overall growth in the year to March 2012 as doubts over the Eurozone's future, along with the Asian governments' staunch efforts to cool their markets have taken their toll.

The major price growth came in Southern American countries, with Brazil recording the strongest annual growth of 23.5%.

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Knight Frank suggested the Asian tiger now resembled something of a domestic cat as far as house prices are concerned, mainly due to government efforts to cool price inflation.

The region recorded average annual price growth exceed 16% in the first quarter of 2010, but two years later the figure was closer to 2%.

The region's growth still exceeds the global average, but the margins have shrunk considerably.

Nicholas Holt, Knight Frank's director of research in Asia, says: "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 ongoing 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."