Global house prices rise at slowest pace since 2015 amid inflation and rate pressures, according to Knight Frank survey
- Kinght Frank says ‘home prices across the world will face the challenges brought by [higher] interest rates and inflation’
- In Hong Kong, home prices are expected to drop by up to 5 per cent over 2023, according to report
Global house prices rose at their slowest pace in the first quarter of 2023 year-on-year since the same period in 2015, and remain under pressure across the world, as central banks continue to tighten policy to rein in inflation, according to a report by Knight Frank.
The first cuts in interest rates may now be delayed until the second half of 2024 for several key markets, leading to fewer transactions and reduced market liquidity for 12 months or more, the consultancy said in a report released on Wednesday.
“In general, home prices across the world will face the challenges brought by [higher] interest rates and inflation, while Hong Kong, mainland China and Japan are the only exceptions from the inflation problem,” said Martin Wong, Knight Frank’s Greater China head of research and consultancy.
In Hong Kong, home prices are expected to drop by up to 5 per cent over 2023.
“Inflation is not an issue for Hong Kong, but the high-interest rate environment will remain an issue for the remainder of the year,” said Wong. “The first interest rate cuts [are unlikely to happen before] the second quarter of 2024 and thus market liquidity will remain low for the next six to nine months.”
Average annual price growth across the 56 markets covered by the Knight Frank Global House Price Index slowed to 3.6 per cent in the 12 months to the end of March, down from 5.7 per cent in the previous quarter.
