Residential News » Istanbul Edition | By Michael Gerrity | September 9, 2022 8:20 AM ET
Turkey enjoyed the world's highest annual price growth in Q2, 2022
According to international property consultant Knight Frank, global housing markets defied the odds in Q2 of 2022. While many expected a notable slowdown in the second quarter of 2022, both in terms of the index's overall performance, and in relation to the number of countries seeing house price declines in annual terms. Neither materialized.
Knight Frank's Q2, 2022 Global Housing Index is still rising at 10% per annum, down only marginally from 10.9% last quarter. Plus, 51 of the 56 countries and territories tracked continue to register an increase in house prices on an annual basis despite the clouds, or rather storms, on the economic horizon.
51 of the 56 countries and territories tracked continue to register an increase in house prices on an annual basis despite the clouds, or rather storms, on the economic horizon.
Even when Knight Frank looked at the data over the last three months that figure only drops to 49 of the 56 markets.
As some would expect in real terms, markets are feeling the pinch. When taking inflation into account, house prices in real terms are averaging just 1.6% growth in the year to Q2 2022, down from 6.2% a year earlier.
Although the global picture in nominal terms is one of relative resilience, there are signs Asia Pacific is ahead of the curve when it comes to the slowdown. Of the seven markets that saw prices decline between March and June 2022, six are in the Asia Pacific region: Hong Kong, South Korea, Chinese mainland, Australia, Malaysia, and New Zealand.
New Zealand has seen the biggest decline with prices down 3% on a 3-month basis. New responsible lending laws and seven rate rises since October 2021 have shifted buyer sentiment, from a fear of missing out to a fear of overpaying.
Central and Eastern European countries are still performing strongly despite the proximity of the Ukraine crisis. Slovakia (26%), Czech Republic (24%), Estonia (21%), Hungary (20%), Latvia (17%) and Slovenia (17%) all sit within the top ten this quarter.
Turkey's triple-digit annual growth of 161% can largely be ignored with inflation at a 24-year high of almost 80% and with interest rates heading south this figure may yet increase.
The US housing market is resilient in sixth place with 21% annual growth, but a slowdown is on the cards. Higher mortgage rates led to another fall in existing home sales in July, which are now down by 26% from their peak in January 2022.