GLOBAL - House price growth recently fell to its weakest point in more than two years, and is unlikely to improve in the near future, according to Knight Frank.

Its global index shows that in the fourth quarter of 2011 capital growth reached its lowest ebb since Q2 2009.

This is not expected to recover until income and rents catch up, and the market absorbs excess supply generated during the boom years. Values could even slip into negative territory in 2012, according to Kate Everett Allen, head of international residential research.

Capital values fell in the majority (60%) of markets covered by the index and there was a continued slowdown in Asian markets.

A report by Everett Allen said: "No improvement is expected until the gap between house prices and two of its key determinants - incomes and rents - starts to shrink and the excess supply of new homes built in many locations during the boom years prior to 2008 is absorbed."

Significant exceptions to the overall 0.5% growth trend last year included a 26% increase in Brazilian house prices, which the report attributed to population growth, rising household wealth and a growing mortgage market.

Although Ireland came in with the index's lowest growth at -17%, other European markets bucked an otherwise moribund trend.

Within the euro-zone, Estonia topped the regional inflation list with 4.4% year-on-year but posted the index's second highest growth after Brazil. Slovenia and Germany likewise posted growth above 5% in the Knight Frank index.

Despite acknowledging that the performance of global housing markets was far from uniform, and that there was "some cause for localised optimism", Everett Allen's report concluded that the overall trend this year would be negative.

In Asia, the decline in house prices has been dramatic - largely as a result of Chinese government measures aimed at cooling the market. Growth in Chinese house prices was -2% last year, compared to 42% at their 2007 peak. Singapore house prices posted 5% last year, compared with 33% in 2007.

However, Knight Frank analysts saw no indication that the government would draw back from property tightening policies, with the result that market sentiment will remain weak throughout 2012.