Global housing markets await interest rate cuts

Knight Frank presents the quarterly report on trends in major housing markets across 55 countries – Global House Price Index for Q4 2024.

Key figures:

2.6% – annual average house price growth across 55 countries
-10.4% – real annual growth in Turkey, despite nominal growth of 29.4%
80% – of markets show positive annual price growth
4.8% – long-term trend of annual house price growth

In the fourth quarter of 2024, the average annual growth rate across our basket of 55 global housing markets slightly increased to 2.6%. Nevertheless, growth remains significantly below the long-term global trend of 4.8%. This below-trend period began in early 2022, when interest rates sharply increased worldwide.

In our view, further growth will require additional interest rate cuts by central banks. Although the fight against inflation continues in many developed markets, it is likely that further rate reductions will occur in 2025. As a result, we expect the average pace of house price growth to rise in the second half of the year.

A look at the market

Turkey leads our index, recording the highest annual growth rate of 29.4%. Despite this strong nominal growth, when adjusted for inflation and viewed in real terms, house prices in Turkey are currently falling at a rate of 10.4% per year.

European markets dominate the upper part of our table in terms of annual growth, with seven markets – led by Bulgaria – seeing growth above 10%. Mainland China and Hong Kong are at the bottom of the table, both recording price declines of more than 8% during 2024.

Real prices decline

As demonstrated by the example of Turkey, if we adjust our index for inflation, we find that global house prices peaked in Q1 2022 and have since declined by 3.6% over two years. The last time real prices declined was following the global financial crisis, when prices fell by 10% over five years.

Real prices have fallen not only due to higher interest rates, but also due to above-trend inflation, especially in Europe and North America.

As for Slovenia, it has consistently remained among the top twenty moderately growing markets over the past seven years. As of Q4 2024, Slovenia ranks 14th in the current report.

Global House Price Index for Q4 2024

Source: Knight Frank Research