Global House Prices rose 3.1% in the Year to December 2023

ASR’s Global House Price Index (HPI) – which excludes China - rose at an annualised rate of 5.1% over the past six months, to stand 3.1% higher than a year ago. US house prices have continued to perform strongly, up 6.7% over the past 12 months. ASR’s European and Eurozone House Price Indices were broadly unchanged on where they were a year ago, although Germany and Sweden did see declines in house prices over the course of the year.

The rise in ASR’s Global House Price Index has been dominated by a strong performance in America. Surveys suggest that the US housing market is picking up as expectations grow that borrowing costs are set to fall in 2024. The latest National Association of Home Builders / Wells Fargo Housing Market Index jumped from 37 to 44 in January while the latest Fannie Mae National Housing Survey reported an improvement in housing sentiment from 64.3 in November to 67.2 in December, spurred on by hopes of lower mortgage rates. Online searches of “Homes for Sale” having also begun to pick up from their August lows, after allowing for the usual seasonal factors.

Outside of America, house prices have been less robust. ASR’s Global House Price Index excluding America was practically unchanged on where it was a year ago, although there were some bright spots. Danish house prices have risen sharply with a 17.8% increase over the past 6 months at an annualised rate. This is mainly due to new property tax laws coming into effect in January 2024 as house buyers have tried to get ahead of the higher taxes that will come with these new laws. Canada and Australia have also seen significant rise in house prices over the past 6 months as housing supply has struggled to cope with high levels of inward migration and urbanisation.

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