What are the prospects for global real estate markets in the context of inflation?

This is particularly noticeable in the resort of Phuket; however, locals are still exercising caution to avoid creating an artificial hype in the market.

The situation in Finland

Finland is also showing positive results, with a price increase of 9.83% excluding inflation, which places it in 30th position. However, when accounting for inflation, the growth is only 2.24%, putting the country in 25th place.

This is surprising, as sellers are noticing a decrease in activity in the shadow market, which is linked to rising interest rates. It is expected that by the middle of this year, real estate sales will significantly decline, signaling a slowdown in market activity.

The situation in Germany

In Germany, the situation looks less optimistic. With a price increase of 9.98% not accounting for inflation, Germany ranks 29th, and when considering inflation, a mere 2.2% places the country in 26th position.

This is the lowest level of price growth in the last four years, when housing prices significantly exceeded 10%. Compared to the first quarter of this year, property prices have even decreased slightly.

The interest rate continues to rise, and the Central Bank has revised its forecast for GDP growth from 4.2% to 1.9%. Over the past eight years, housing prices in Germany have increased by an impressive 70%, and perhaps now is the time to correct the situation.

United Arab Emirates and Dubai

As for the United Arab Emirates, particularly Dubai, there has been a significant price increase of 10.12% excluding inflation, which ranks 28th, and 4.04% including inflation, placing it 23rd.

The reasons for such a sharp price increase are linked to the rise in external demand, especially considering that prices were almost at zero a year ago. Current activity in the UAEreal estate market has reached its highest levels in the last ten years, which boosts confidence in the favorable future of the country's economy.

Montenegro

In Montenegro, according to statistics, real estate prices have increased by 11.52% without taking inflation into account, placing the country in 24th place. When considering inflation, the increase was 1.77%, which gives Montenegro 38th place in the overall ranking.

The main reasons for the growth are high inflation and significant interest from foreign buyers, including representatives from Russia and Ukraine. As the resort season approaches, there is a slight but noticeable increase in prices, and the investment program for obtaining citizenship has brought a substantial €30 million to the country's budget.

Latvia

Latvia is showing an impressive price growth of 14.45% without taking inflation into account, placing the country in 18th place. However, when considering inflation, prices decrease by 4.1%, which puts Latvia in 42nd place.

Among European countries, Latvia can compete in growth rates with other Baltic states as well as with the Czech Republic. In 2021, there was a sharp increase in prices, but by mid-2022, demand had significantly decreased due to rising interest rates.

Portugal

Portugal also stands out with its indicators: a price increase of 17.58% without taking inflation into account places the country in 13th place, while when considering inflation, the growth is 8.89%, which corresponds to 10th place.

Overall, the real estate market in Portugal is feeling confident, showing record results due to stable interest from both local and foreign investors, especially from the United States, Brazil, and other South American countries.

Conclusion

The analysis of the current situation in the real estate market across 58 countries, presented in the GPG ranking for the second quarter of 2022, allows for several important conclusions that prompt reflection on the future. A general trend of rising housing prices is observed almost everywhere; however, the pace of this increase is significantly slowing down. In a context where the purchasing power of the population is declining and central banks are forced to raise key interest rates to combat rising inflation, it is hard not to notice that the stability of this market is beginning to waver.

This is most evident in European and Asian countries, where there has been a significant decline in activity. While the Pacific region demonstrates relative resilience, circumstances, including the crisis in Ukraine and the aftermath of the COVID-19 pandemic, do not contribute to a full market recovery. The reduction in housing availability and high interest rates put many potential buyers in a position to choose between postponing their property purchase or considering less expensive options.

Highlighted countries

Among the highlighted countries, interesting points can be observed:

• ItalyThe stable market, despite global fluctuations, continues to maintain a certain level of interest due to the influx of foreign buyers.

• SpainMarket activity remains strong, especially among foreign investors.

• Latvia and PortugalThese countries continue to attract investors despite a sharp decline in demand in 2022.

The future of the real estate market

In summary, it can be said that the future of the global real estate market looks uncertain, and all participants in this market will need to closely monitor economic indicators and changes in the political landscape. Current trends have the potential to influence price dynamics, which requires flexibility and caution from both buyers and sellers. I hope that the information provided will help readers gain a more comprehensive understanding of the current situation and make informed decisions in the future.