Who are the movers and shakers in global residential property?

Who are the movers and shakers in global residential property?

The latest Knight Frank Global House Price Index finds that property values have slowed in the last year. The overall growth was the smallest since 2015 and around one-third of markets experienced price drops, while few of the 56 markets showed significant price increases in quarterly terms. However, several Eastern European countries have recorded double-digit upticks in the last year.

Slower annual growth

Global residential property prices increased by an average of 3.6% in the year to Q1 2023. The previous quarter had shown annual growth of 5.7%, indicating that house prices worldwide have decelerated.

global residential property price index

According to Knight Frank, the latest figures mean the Index is experiencing its slowest growth since Q3 2015. The 3.6% increase is also a stark contrast to the 11.1% spurt seen just a year ago as property markets surged worldwide.

In annual terms, house prices fell in 17 of the 56 markets in the Index (over 30%), with 8 seeing a drop of over 5%.

Faster quarterly growth

On the other hand, the Index revealed a different story in quarterly terms. Although house values dropped in 23 markets, the overall figure stood at 1.5% growth, well ahead of the 0.6% decrease in Q4 2022.

However, Knight Frank cautions that the recent reversal doesn’t confirm that the trend will continue on this path. The company claims it indicates “tight supply, limited new housing construction and strong household formation” across worldwide real estate markets.

Best and worst global residential property performers

Turkey soared ahead of all the other 56 markets in the latest Index, with annual and quarterly growth of 132.8% and 22%, respectively. However, Knight Frank attributes the figures to “a consequence of rampant inflation”.

Nevertheless, Eastern Europe headed the top of the rankings for the highest year-on-year growth. Real estate in North Macedonia saw an 18.8% surge, with Croatia and Hungary both close behind. In Asia, Singapore property took centre stage and went up by 11.3%.

At the other end of the scale, South Korean real estate values plummeted by 15.7%, while in New Zealand, they dropped by 13%. Hong Kong and Sweden (down 10.3% and 8.8%, respectively) took third and fourth places from the bottom.

Quarterly stars

Despite the overall slowdown in global residential property prices, several countries experienced strong growth in the first three months of the year. Lithuania took the first position, with an 8.2% rise in house values. Maltese real estate came a close second, with an uptick of 7.3%.

Croatia property continued its upward trend in Q1, when prices rose by 4.7%, taking it to third place in the table. Japan and Mexico (up 3.9% and 3.5%) brought up the rear.

House prices in BRIC Group investment destinations

Real estate in all three of the countries where we have investment options saw steady growth, both in annual and quarterly terms.

Brazil – Knight Frank reports a 5.7% increase for the year to Q1 2023 and a 1.1% rise from January to March. The figures confirm the solid upward trajectory of property in Brazil.

Spain – house prices rose 3.1% in the year, with a solid 2.2% rise in Q1. These increases prove that the underlying tendency for Spanish real estate is up, despite rising interest rates.

US – overall, house prices went up by just 0.7% in the year and by 1% in the quarter. Tight supply continues to constrain the market, although pockets in the country show a reverse trend, for example, the Florida property market.

(Source: Knight Frank)