These factors, combined with the lack of housing supply, help to explain the fact that house prices in Portugal recorded an annual growth of 6.5% at the beginning of this year, which is higher than the increase in the cost of housing worldwide (+3.6%). What is also clear is that these factors are “accelerating the global growth in house prices”, concludes the latest Knight Frank report analysed by idealista.
By analysing 56 countries around the world, Knight Frank concluded that the (average) house price increased by 3.6% between the first quarter of 2024 and the same period last year. And this growth is higher than that recorded at the end of 2023, indicating that the cost of housing is accelerating globally – but remains below the average of the last 20 years (+5.6%).
“With debt costs slowly starting to fall and with a limited supply of homes for sale, house price growth in the markets analysed grew by an average of 3.6% in the first quarter of 2024 compared to the same period last year, 4 percentage points more than in the previous quarter (+3.2%)”, highlights the Global House Price Index report, prepared by Knight Frank.
What is also clear is that house prices have risen in most countries over the last year. That is, houses for sale have become more expensive in 45 of the 56 markets analysed by the international consultancy (Portugal included). “Many markets are suffering from a lack of homes for sale, as well as a slow pace of new home delivery, which means that relatively healthy housing demand is pushing prices to new highs”, explains Liam Bailey, global head of research at Knight Frank, warning that, however, only lower housing credit costs “will support this growth in the long term”.
On the other hand, as inflation remains high in many global markets, the evolution of real house prices remains negative. Taking inflation into account, house prices will have fallen by 0.4% on average over the last 12 months. “Real price growth is now 3.3 percentage points lower than the long-term average (last 20 years) of 2.9%”, the document indicates.
