The pace of growth in the European residential market has weakened, while Asia-Pacific and North America show stronger gains, according to a global survey by Knight Frank.

While overall global housing growth is on the up with more countries recording a rise in house prices in the 12 months to June than at any point since the start of the global financial crisis, Europe is lagging behind, according to the latest Knight Frank Global House Price Index.

The index revealed that the annual percentage change for house prices for Europe was 2 per cent, compared to 3.6 Africa; 4.3 per cent for Asia Pacific; 5.3 per cent for North America; 8.8 per cent for South America and 16.1 per cent for the Middle East.

Knight Frank said that the overall trajectory of the Global House Price Index was upward, with 40 of the 54 countries tracked by the index recording flat or rising prices on an annual basis.

However, despite more countries seeing positive price growth, there appear to be signs of a “two speed Europe” emerging.

Turkey recorded a 14.09 per cent increase in house prices for the year ending June 2014, while house prices in Ireland and the UK increased 12.5 per cent and 11.6 per cent, respectively.

Firmly lodged at the bottom of the table were Cyprus (-9.2 per cent) Greece (-7.9 per cent) and Slovenia (-7.4 per cent).

“The jury looks to be out on whether the European Central Bank will commence a programme of quantitative easing. This would help support some of the weakest performing EU markets but with some economists making comparisons between current conditions in Europe and Japan’s ‘lost decade’ it’s likely Europe will remain the weakest performing world region for some time,” Knight Frank said.

Globally, the survey presented a mixed picture for the quarter. The average rate of annual growth has slowed from 7.1 per cent in March to 5.2 per cent in June, but the rate of quarterly growth picked up, rising from 0.6 per cent over the first quarter to 1.6 per cent in the second.

In Asia, Singapore recorded negative growth of -2.4 per cent for the year, behind Hong Kong at 2.5 per cent. China saw annual house prices grow 4.3 per cent, while Taiwan logged a 6.8 per cent increase.

The US showed down in the rate of growth in the second quarter with annual price growth of 6.2 per cent recorded in the year to June, compared to 10.3 per cent in the year to March.

“Prices in the US may slow further as the stimulus used to aid the economic recovery post 2007/8 continues to be withdrawn by the Federal Reserve,” Knight Frank said.

Dubai topped the annual rankings for the fifth consecutive quarter, recording annual price growth of 24 per cent. However, this was down from 27.7 per cent in the year to March 2014.

“The Emirate’s mainstream market is outperforming the luxury end of the market due in part to the mortgage rules introduced by the UAE Central Bank which are less restrictive for those buying residential property worth below AED 5 million,” the report said.