Rising Apartment Prices Worldwide in Q1 2022 – Czech Republic Leads Again

The housing index published by real estate agency Knight Frank ranks the Czech Republic second in the world.

The index, which examined the rise in apartment prices in 56 countries around the world (Global House Price Index Q1), found that in the first quarter of 2022, apartment prices in the Czech Republic rose by 25.9%, while the European average was only 10.2% — the highest in 18 years.

Turkey Takes the Lead — and There’s a Reason

Turkey ranked first with an average price increase of 110%, followed by Slovakia in third place with a 22.1% increase. For comparison, Israel ranked 17th with a 13.3% increase.

The report’s authors believe that property purchases in Turkey were mostly made by investors, largely due to the surge in inflation in the country, which made real estate a hedge against rising inflation.

Price Drops – The Exception, Not the Rule

In most cities (94%) surveyed in the index, prices rose in the first quarter of 2022, with only nine cities seeing price declines.

Most of the cities that saw price drops were in Italy (Turin, Florence, Venice, Palermo, and Genoa), but declines were also recorded in Kuala Lumpur (Malaysia) and Lima (Peru). The city with the sharpest price drop was Rabat (capital of Morocco) – a decline of 6.3%.

What Does the Future Hold?

The authors of the report believe that global real estate price increases have also been fueled by central banks injecting money into the economy — primarily as a way to boost activity after the subprime crisis.

Lowering interest rates around the world to near-zero levels may have helped economic recovery post-crisis, but it also turned real estate into a safe investment channel.

The report estimates that despite expected global interest rate hikes aimed at curbing inflation, most housing prices will remain high due to limited supply.

This means that buyers are likely to spend more than planned on purchasing homes — even if that means paying prices higher than those seen before the global COVID-19 pandemic.

In summary – it seems that housing prices worldwide, and especially in the Czech Republic, are unlikely to drop anytime soon. Economic policy shifts are not expected to affect them significantly, at least not in the immediate future. Want to learn more about real estate in Prague? Talk to us…