Housing markets around the world are continuing to lose steam, according to the latest quarterly report by Global Property Guide, which adds that falling purchasing power caused by soaring inflation, tighter lending conditions and record-high borrowing costs due to interest rate hikes, as well as heightened global economic uncertainty, are all contributing to house prices falling in two out of three countries at the moment.

When adjusted for inflation, house prices have risen in only 20, and actually declined in 42 markets, which have so far published housing statistics in Q2 2023.

However, high inflation in most countries creates an illusion that house prices continue to rise strongly (or the decline is just modest), with nominal house prices still rising in 40 countries, and declining in only 21 of the 62 world’s housing markets during the year to Q2 2023.

For instance, in Egypt, nominal house prices rose by a whopping 33.9% year-on-year in Q2 2023 but in real terms, prices have actually dropped 1.3%. Similarly, in Karachi, Pakistan, house prices soared 21.2%, however when adjusted for inflation, real prices have actually fallen by 6.4%.

Risers and fallers
The strongest house price increases in the Global Property Guide survey during the year to Q2 2023 were seen in: Turkey (41.7%), North Macedonia (18.3%), Dubai, UAE (14.6%), Puerto Rico (12.9%), and Georgia (+12.5%), using inflation-adjusted figures.

The biggest y-o-y house price decline was registered in Buenos Aires, Argentina (-57.1%), followed by Sweden (-20.2%), Slovak Republic (-16.6%), Bogota, Colombia (-16.0%), and Riga, Latvia (-15.2%), again using inflation-adjusted figures.