House prices in global cities are rising at the fastest rate since 2004

According to the latest report from international real estate consultant Knight Frank Global Urban House Price Indexreal price growth in local currencies and house price developments in 150 cities around the world, 94% of which saw prices rise in the last 12 months, up from 85% a year ago .

Prices for townhouses outpace their national markets, which grew by 10.3% over the same period. Highly criticized during the pandemic as the history of the “space race” took hold, the dynamism of cities is reaffirming itself.

But the market cycle is changing as large parts of the world shift from a pandemic landscape to a post-pandemic landscape. Inflationary pressures are skyrocketing and the cost of debt increases as interest rates rise.

Knight Frank further states, in this environment of increased uncertainty, increased taxes and increased regulation of the real estate market (e.g. a ban on foreign buyers in Canada), we expect the rate of growth in prices are slowing in most markets, but we think a sudden shift to negative price growth is unlikely for most cities in 2022.

Along with key fundamentals such as economic growth, supply levels and employment, the speed and extent of rising interest rates will determine how much price growth slows over the course of the year. coming year.

The 69% inflation explains the dominance of Turkish cities at the top of the index. But the key headline is the performance of North American cities, 12 of the top 20 rankings are occupied by US and Canadian cities this quarter with Halifax (34.7%) leading the way.

On their heels are Australian cities, which are recording an average annual growth of 18.3%, with Brisbane (28.4%) leading the way.

Meanwhile, for economies whose monetary tightening cycle lags that of New Zealand, Auckland’s path may be one to watch. Price growth in Auckland is 5.1% compared to 22.7% a year ago. The country’s five interest rate hikes since October 2021 have influenced buyer sentiment, with home sales falling 40% from 4,013 in the first quarter of 2021 to 2,403 in the first quarter of 2022, Knight Frank concludes.

Knight Frank 2022 Global House Price Data - top performing city by world region.jpg

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