Here’s where housing prices are cooling the most

Real estate prices around the world have cooled off as higher borrowing costs keep many buyers on the sidelines. 

South Korea fared the worst, as the Bank of Korea raised interest rates to curb inflation. Average home prices there fell 7.5 per cent in the third quarter compared to the prior year. Hong Kong, Peru, China and New Zealand also experienced declines.

Overall, prices of properties across 56 countries and territories rose at a rate of 8.8 per cent in the third quarter, down from 10.9 per cent at their peak in the first three months of the year, according to a new report from real estate consultancy Knight Frank. But when accounting for inflation, that’s a 0.3 per cent decline year over year. 

Prices in the UK and Canada dropped on an inflation-adjusted basis. The report used second quarter data for the US and found that nominal prices were up 11 per cent through Jun 30 compared to last year. The US market has cooled significantly in recent months, with higher mortgage rates hitting demand and prompting some sellers to pull properties off the market.

Countries like Portugal, Singapore, Ireland and Iceland all notched double-digit increases in the third quarter, aided by the return of foreign investment and expats as well as strong domestic demand.

Out of 150 cities tracked by the consultancy, 16 saw prices fall. Wellington, New Zealand, led the way with a 17.3 per cent drop, while prices decreased 9.8 per cent in Buenos Aires, 3.6 per cent in Sydney and 2.1 per cent in Venice, Italy.

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“The price slowdown is taking longer to materialise than we envisaged, but markets with the largest jump in interest rates are starting to see a real decline,” said Kate Everett-Allen, global head of residential research at Knight Frank. BLOOMBERG