Knight Frank – Global Residential Cities Index, 2Q 2023

The second quarter of 2023 saw a slowdown in average annual price growth across global cities, dropping to 1.7% from 3.2% in the previous quarter. However, more recent quarterly data suggests a revival in some key markets. Despite ongoing challenges, it is expected that a growing number of cities will transition from falling to stable prices in the next two quarters. The main takeaway from this quarter is that average house price growth continues to slow globally, with a decrease from 3.2% in Q1 2023 to 1.7% in Q2. This marks the fourth consecutive quarterly slowdown since the peak in Q2 2022 when the housing market experienced a post-pandemic boom with annual growth at 11.8%. The current growth rate is lower than during the first wave of the pandemic, where it reached a low of 2.9% in Q2 2019. The last time growth was this slow was in Q1 2012 during the European Debt Crisis. However, when looking at more recent quarterly data, a more complex picture emerges. Quarterly price growth reached a high of 3.7% in Q1 2022, then sharply fell and turned negative in the final quarter of the same year. However, growth has since increased, with prices higher by an average of 1.3% across city markets in the three months leading to June 2023. At the beginning of this year, 48% of cities were experiencing price falls, but by Q2, this share had decreased to 40%. Improvements over the past three months are widespread, particularly in the US, Canada, and Australia. While some key markets are strengthening, others are facing tougher conditions. Chinese mainland city markets have weakened, with half of them seeing price falls in Q2. Turkey experienced a sharp slowdown in price growth, and Singapore saw a moderation in growth. Additionally, several European cities, including Brussels, Marseilles, Athens, Barcelona, and Madrid, saw pricing conditions tighten further.