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Global house prices experienced a significant shift in 2022, with advanced economies seeing a notable decline after a prolonged period of growth. The real house price index (adjusted for inflation) for advanced economies peaked at nearly *** index points in early 2022 before falling to around *** points by the second quarter of 2023. In the fourth quarter of 2025, the index reached * points. This represented a reversal of the upward trend that had characterized the housing market for roughly a decade. Likewise, real house prices in emerging economies declined after reaching a high of * points in the third quarter of 2021.

What is behind the slowdown?

Inflation and slow economic growth have been the primary drivers for the cooling of the housing market. Secondly, the growing gap between incomes and house prices since 2012 has decreased the affordability of homeownership. Last but not least, homebuyers in 2024 faced dramatically higher mortgage interest rates, further contributing to worsening sentiment and declining transactions.

Some markets continue to grow

While many countries witnessed a deceleration in house price growth in 2022, some markets continued to see substantial increases. Turkey, in particular, stood out with a nominal increase in house prices of over ** percent in the fourth quarter of 2025. Other countries that recorded a two-digit growth include North Macedonia and Hungary. When accounting for inflation, the three countries with the fastest growing residential prices in early 2025 were North Macedonia, Portugal, and Bulgaria.