Canada, China lead downturn in global home prices

Amid weakness in Canada and China, global real housing prices weakened further in the third quarter, according to data from the Bank for International Settlements (BIS).

While nominal prices were up by 2% in the third quarter, real global prices — which reflect inflation-adjusted prices — declined by 0.7% in the quarter, the BIS said in a report published on Thursday. 

The largest declines came in Canada and China, which both saw prices drop by 5% in the third quarter.

This latest weakness was in line with the previous quarter, which saw real prices down by 0.8% — and continues a trend of declining global housing prices that began in 2022.

However, the BIS noted that the third quarter decline in global prices “was driven by a few major economies.” 

“In fact, most advanced economies and emerging market economies recorded price growth,” the report said.

Indeed, the data showed that about 60% of advanced economies and 70% of emerging markets registered higher real prices in the third quarter — and, the median change in real house prices was positive, up 1.5% in the quarter.

And, despite the ongoing decline in real prices, global prices are still up by 20% from the end of the global financial crisis in 2009, and are up 3% from their pre-pandemic levels, the BIS said.

For emerging markets, real prices were down by 1.5% in the third quarter, while advanced economies recorded a 0.3% gain, the report noted.

The weakness in emerging markets was driven by Asia, the BIS said, whereas prices were up a bit in emerging Europe, Latin America and Africa.

Among advanced economies, the Euro area led the way, with prices in the region rising 3% in the quarter.