The upward trend in the domestic housing market continues, with prices now nearing the historic highs of 2008 before the financial crisis hit. The latest double-digit surge in the third quarter of 2023 has propelled Greece to the global top three countries with the strongest annual growth rate. However, Greeks seem somewhat distant from the celebration, as foreign investment continues to set the tone for this surge.

According to the global index compiled by the international real estate advisory firm Knight Frank, Greece ranks third among 56 countries in terms of the average annual increase in nominal property prices. The overall annual rate of housing price change for the entire country reached 11.9% in the July-September 2023 period, with a cumulative increase of 57.5% since 2017, based on data from the Bank of Greece (BoG).

Turkey, due to soaring inflation rates-there’s been an 89.2% annual increase in nominal property prices in the third quarter of 2023- maintains its leading position in the global ranking since the first quarter of 2020.
Southern and Southeastern European countries dominate the top positions in the ranking, with Croatia in second place (+13.7%), Greece in third, and North Macedonia (+11.0%) in fifth. The only outlier in this ranking is Colombia, standing fourth in the global index.

Japan leads in the Asia-Pacific region with a 6.3% annual growth rate, followed by India at 5.9%. In contrast, the United States experienced a 1.3% increase in housing prices in the third quarter due to rising mortgage rates, posing challenges to affordability.

Towards the bottom of the ranking are Sweden (-11.1%), Slovakia (-10.1%), Finland (-9.6%), and Hong Kong (-8.7%).

The resilience of housing prices can be attributed to limited available stock, increased household savings, and substantial wage hikes, as highlighted in the Knight Frank report. Specifically, in countries like the United Kingdom, wage increases surpass inflation rates.

According to Liam Bailey, Knight Frank’s Global Head of Research, the surprising resilience of global housing prices amidst increasing borrowing costs for mortgagees is sustained by robust savings, wage increases above inflation, and low supply of properties for sale. However, low liquidity remains a significant concern for housing markets in 2024, with sales volumes potentially decreasing by up to a quarter compared to recent highs. Only a shift to lower interest rates might stimulate sales activity.