Only South Korea had a bigger decline
New Zealand has fallen near the bottom in international house price growth ranks, ranking 55 out of 56 countries.
The Knight Frank Global House Price Index showed average house price increases across 56 countries eased to 3.6% in the year ending March, down from 5.7% in the previous quarter and down from a peak of 11.1% in the year ending March 2022.
According to the index, New Zealand now has the world’s second-slowest rate of house price growth, with a price decrease of 13% in the year to March, Stuff reported.
While 17 other countries saw annual price falls, New Zealand exemplified the change in market trajectory, having secured the second spot in the index two years ago, when it posted a price increase of 22.1% in the year to March 2021.
Only South Korea posted a bigger slump, with an annual price decline of 15.7%.
Turkey ranked first, with prices surging 132.8% annually, but it was noted that the rise was largely due to the country’s rampant inflation, which was near 40% in May.
North Macedonia and Croatia ranked second and third places with rises of 18.8% and 17.3%, respectively. Also making it to the top five were Hungary and Lithuania with increases of 16.6% and 15.3%, respectively.
The United Kingdom, Australia and Canada placed 47th, 48th, and 50th, with price falls of 3.1%, 5%, and 6.9%.
Liam Bailey, Knight Frank global head of research, said prices globally were under pressure as central banks strive to curb inflation, and were lifting at the slowest annual rate since the third quarter of 2015, Stuff reported.
While the latest figures showed that annual price increases considerably eased, quarterly increases had improved, Bailey said.
“Global house prices contracted 0.6% in the final three months of 2022, and yet there was a 1.5% rise in the first three months of 2023,” he said.
The reversal, on its own, did not confirm that global markets were set to improve – but instead “highlights that tight supply, limited new housing construction, and strong household formation are acting to underpin prices in many markets,” Bailey said.
New Zealand experienced one of the biggest price corrections in the current cycle, but it might soon lead to an exit route from the global housing slowdown, Bailey said.
“While prices are likely to fall further, the speed and depth of the correction suggest an uptick in both demand and eventually prices will come back earlier than in many other developed markets,” he said. “ANZ bank expects growth in both metrics before the end of the year.”
Bailey noted that most markets continued to face several risks, with inflation still the main issue.
Recent weeks saw a growing number of commentators claiming that the country’s housing downturn has started to hit a trough, although some believed there was further to go, Stuff reported.
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