Monaco Edition | By Michael Gerrity | December 23, 2019 8:30 AM ET
According to global real estate consultant Knight Frank, home prices across 56 countries and territories worldwide are rising at an annual rate of 3.7% on average. This marks the index's slowest rate of growth for over six years. This trend mirrors the pattern observed in Knight Frank's other global city indices - across both the mainstream and prime segments.
Analysis of the latest available data, shows Hungary leads the index this quarter with 15.4% annual price growth, boosted by a robust economy (4.9% GDP growth forecast in 2019*), low mortgage rates, high wage growth and a range of government subsidy measures.
However, other previous frontrunners from the last two years have cooled significantly - Slovenia (18th), Malta (22nd) and Iceland (26th) either due to weaker economic landscapes, affordability concerns or a decline in tourism.
In contrast, some countries and territories are rising up the rankings. A year ago, Greece sat in 24th place with price growth of 2.4%. Although prices still sit 37% below their 2008 peak, they are now rising at a rate of 7.7% per annum and Greece is ranked 12th out of 56 countries and territories.
Seven of the top ten rankings this quarter are European countries and most are located within Central and Eastern Europe. Here, prices are rising from a low base, economies are strengthening and borrowing costs are close to record lows.
On a world region basis, Russia & the CIS lead the rankings, registering average annual growth of 5.7% - prices in Russia are up 8.1% over the 12-month period and Ukraine has moved off the bottom rank in the last year and is now averaging 3.3% growth per annum.
Knight Frank publishes two indices tracking mainstream prices, its Global Residential Cities Index (150 cities) and their Global House Price Index (country level). A comparison of the two indices highlights two key trends. Firstly, the extent to which national house prices lag city markets by approximately six months and secondly, the degree to which the performance gap between the two has narrowed since 2018.
