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Global house price index – Istanbul leads the way as values soar

Knight Frank's latest Global House Price and Residential Cities Index has revealed that Istanbul was the city with the highest rate of price growth in the year to Q1 2022.

The historic Turkish city, which straddles Europe and Asia, saw a huge 122% growth in residential house prices in the 12-month period between Q1 2021 and Q1 2022. The largest city in Turkey, formerly known as Constantinople, it serves as the country’s main economic, cultural and historic hub.

Turkey overall performed very well in the index, with the capital Ankara and the coastal city of Izmir (Turkey’s third biggest) in second and third place respectively, both with more than 100% price growth.


The index says that inflation of 69% helps explain the dominance of Turkish cities at the top of the index, but argues that the key headline is the performance of cities in North America, with 12 of the top 20 rankings occupied by US and Canadian cities in Q1 2022. Halifax (with 34.7% price growth) was out in front.

Hot on their heels were Australian cities, which average 18.3% annual growth, with Brisbane (28.4%) the frontrunner, while Hobart, Adelaide, Darwin and Canberra also featured in the top 30.

From a European perspective, Bratislava, Utrecht, Reykjavik, Amsterdam, Rotterdam and Tallinn were the top performers, while Porto, Gothenburg, Stockholm, Dublin, Berlin and Prague made the top 50.

With regards to the UK, Edinburgh was the top performer, in 41st place with house price growth of 13%. Belfast, Manchester, Cardiff, Exeter, Bristol and Glasgow were also in the top 100, but the Scottish capital was the only UK city to make the top 50.

London was only in a lowly 108th position, with growth of 4.7%, while fellow powerhouse cities Paris, Milan, Delhi and Rome achieved house price growth of under 4%.

In total, nine cities registered negative house price growth, including Turin, Venice, Florence, Lima, Rabat, Palermo and Kuala Lumpur.

The index also offered an interesting perspective on the impact of interest rate rises, which the UK has experienced a number of in recent years. It said that, for economies whose monetary tightening cycle lags that of New Zealand, Auckland’s path may be one to watch.

“Price growth in Auckland sits at 5.1% down from 22.7% a year ago. The country’s five interest rate rises since October 2021 has influenced buyer sentiment with residential sales falling 40% from 4,013 in Q1 2021 to 2,403 in Q1 2022.”

Other key findings from the index showed that the average annual price growth across all the 150 cities included was 11.5% in the 12 months to Q1 2022, the highest rate since Q3 2004. Meanwhile, 43% of cities registered annual price growth of more than 10% in the year to Q1 2022.

“City house prices are outpacing their national markets which registered growth of 10.3% over the same period,” the report said. “Much maligned during the pandemic as the ‘race for space’ story took hold, the dynamism of cities is reasserting itself. But the market cycle is shifting as large parts of the world move from a pandemic to post-pandemic landscape.”

“Inflationary pressures are surging, and the cost of debt is increasing as interest rates track higher. Set against this backdrop of heightened uncertainty, rising taxes and more property market regulations (e.g. a ban on foreign buyers in Canada), we expect the rate of price growth to slow in most markets but we think a sudden shift to negative price growth is unlikely for most cities in 2022.”

It added: “Along with key fundamentals such as economic growth, supply levels and employment, the speed and scale by which interest rates rise will determine the extent of the slowdown in price growth over the coming year.”


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