This saw house price growth begin to slow in the latter half of 2007, despite strong investor interest, in some cases falling back.
Indeed Cyprus and Iceland were the only European countries in which house price growth outstripped that of 2006.
Rising interest rates over the last 18 months have been blamed for what is hoped to be a market hiccup, with borrowing levels still strong compared to the UK market.
House prices in the Republic of Ireland took quite a blow, falling by 7 per cent, whilst growth in the Spanish market - a traditional stomping ground for British investors - tailed off to 3 per cent. France and Belgium saw continued price growth, but at a far slower rate than previously experienced.
Statistically the UK market was the strongest of the 'big four', recording 8 per cent growth - despite the current gloomy outlook from within the domestic housing industry..
Key to the findings was that oversupply is a growing issue facing the developing property markets, especially those within Eastern Europe.
This was best displayed in the Polish market. Even though Poland recorded the highest rate of price growth at 28 per cent, spooked foreign investors chose to cut their losses and sell up for fear of slowing demand.
The report's author, Professor Michael Ball, said: "The often repeated dilemma currently facing monetary authorities is that slowing economies - and housing markets - need lower interest rates, but higher inflation is against them. How Europe’s housing markets fare in 2008 depends on how that tug-of-war develops.
“There are prospects for some house price falls during 2008 but the scale of any housing market downturn is likely to be far less than the last downturn in the early 1990s.
"The UK housing market looks much better placed than many others in Europe because of the greater interest rate flexibility.”
