Global House Prices 2026: Where Markets Are Rising and Falling (Knight Frank Index)

What the Global House Price Index Shows

Knight Frank's Global House Price Index compares annual house price changes across 55 markets. Reported figures for the first quarter of 2026 are:

• Average annual nominal growth of 1.4%, down from 2.3% in the fourth quarter of 2025.
• About 91% of tracked markets still recorded positive annual nominal growth.
• Real (inflation-adjusted) prices across the index fell year on year, by roughly 1.8% according to published summaries.
• Turkey led the index in nominal terms. Mainland China and Canada recorded the sharpest annual falls.

These figures come from summaries of the Knight Frank report rather than the full report, so check the original release before quoting them in a business case. The pattern is clear, though: most markets are rising in nominal terms, but few are rising faster than inflation.

Spain: The Strongest Large Market, With Caveats

Spain ranked 7th in the first-quarter index, with annual nominal growth of 13.9% (10.1% in real terms). That is the standout result among major European markets. Local data from Spain's notaries shows why it needs context: in Marbella, Benahavis and Estepona, prices per square metre rose year on year, but transaction volumes fell in all three. Rising prices on falling volumes can mean a thin market, which matters when you want to sell. Spain also has high purchase taxes, covered in our worldwide BRRR comparison.

Prime Property: A Different Picture

Knight Frank's Prime Global Cities Index tracks luxury homes in major cities rather than the whole market. For the second quarter of 2026, the reported global annual rate was 2.6%, a recovery from a weaker start to the year. Nairobi (5.0%), Vienna (4.6%) and Stockholm (4.0%) were the strongest quarterly performers outside Asia. Prime and mainstream housing often move differently, because prime buyers are more sensitive to currency, tax changes and international demand. Our look at why luxury London property prices have fallen shows that gap in practice.

The UK in Context

The Office for National Statistics reports that the average UK house price rose 0.9% to £273,000 in the 12 months to August 2026. England rose 0.4% (to £294,000), Wales 3.1% and Scotland 2.9%. London was the weakest English region at -2.2%, driven largely by falling flat prices (ONS, Private rent and house prices, October 2026). Rents are rising faster than prices: we cover what that means for buyers in landlords selling up and rents rising. For an investor, that gap between flat prices and rising rents is why yield, not price growth, often drives UK returns.

Why Headline Price Growth Misleads Investors

1. Nominal is not real. A market where prices rise 15% a year while inflation runs at 15% has not made you richer in local purchasing power.
2. Currency decides your return. If prices rise 15% in local currency but the currency loses 15% against sterling, a sterling investor is flat before costs.
3. Averages hide the segment. Flats and houses, prime and mainstream, and new-build and resale can move in opposite directions in the same city, as London's -2.2% shows.
4. Volume matters. Rising prices on falling transactions can reverse quickly.
5. Costs and tax come off the top. Purchase taxes, withholding on rent and tax on sale reduce every headline figure. See our guide to rental income tax for non-resident landlords.

What This Means for Property Investors in 2026

A world of slow nominal growth and negative real growth rewards investors who buy for income and for value they can create, rather than for market momentum. That is the logic behind refurbishment-led strategies such as BRRR: you do not need the whole market to rise if the refurbishment lifts the value of your property. Compare markets on net yield and exit cost using the rental yield calculator and the Deal Analyser, and read our comparison of international destinations before looking abroad.

Frequently Asked Questions

Are global house prices falling in 2026?

Not in nominal terms on average. Knight Frank's index showed 1.4% average annual growth in the first quarter of 2026, with most markets rising. After inflation, prices across the index fell.

Which countries have the fastest rising house prices?

In the first quarter of 2026 Turkey led in nominal terms, and Spain ranked 7th with 13.9%. Nominal rankings flatter high-inflation markets, so look at real growth too.

Which markets are falling?

Mainland China and Canada recorded the sharpest annual falls in the first quarter of 2026. In the UK, London prices fell 2.2% in the 12 months to August 2026.

Is it a good time to buy property?

It depends on your goal and market. Slow price growth favours buyers who can add value or earn strong rental income, and it penalises those relying on rising prices alone.

Where can I find the original data?

Knight Frank publishes its indices on its research pages, and the ONS publishes UK figures monthly. Always use the original release for decisions.

Key Takeaways

• Knight Frank's index showed 1.4% average annual nominal growth in Q1 2026, and negative growth after inflation.
• Growth is uneven: Spain and Turkey are strong, Mainland China and Canada are falling, and London is weak.
• Judge any market by growth in your own currency, after inflation, tax and transaction costs.
• With slow price growth, income and refurbishment-led value matter more than waiting for the market.

This article is general information, not financial, tax or legal advice. Market figures are taken from published summaries of Knight Frank and ONS releases and change with each update; verify them against the original release before acting.