Global House Prices and City Rankings — 2026-10-26
Global housing markets are diverging sharply, with Australia recording its first simultaneous decline across all capital cities in 15 years while European hubs like Munich top new affordability rankings. In the US, affordability remains strained as mortgage rates hover near 7%, prompting warnings from major financial institutions about a potential 2027 downturn.
Global House Prices and City Rankings — 2026-10-26
Australia’s First Nationwide Price Drop
For the first time in 15 years, house prices have fallen in every major Australian capital city during the September quarter. Sydney prices dropped 4.7% to a median of $1.66 million, hitting a two-year low, as higher interest rates significantly reduced borrowing capacity. This marks the steepest quarterly decline in the national market, although some regional areas in Victoria and the Northern Territory still saw price increases.
Munich Named Europe’s Most Expensive City for New Builds
In the latest Deloitte Property Index 2026, Munich has been crowned the most expensive European city for new residential property, with prices reaching €11,200 per square meter. German media highlights that Munich’s prices now exceed those of traditional rivals like Paris and London, driven by persistent supply shortages and strong demand. While purchase prices in Germany's top seven cities have stagnated or slightly declined due to high financing costs, rental prices continue to rise by 4.5%.
US Housing Market Stalls as Rates Top 7%
The US housing market is currently "stuck," with mortgage rates exceeding 7% and affordability remaining critically strained despite some wage growth. New data from ATTOM shows that while home prices have softened in some areas, the high cost of borrowing continues to deter buyers. Goldman Sachs has issued a new warning for the 2027 market, suggesting that the current stagnation could lead to further complications if rates do not ease.
Central Bankers Warn of Iberian Housing Shortage
The central bank governors of Portugal and Spain have jointly warned that persistent housing shortages are the primary domestic economic risk for the Iberian region. Portugal alone faces a construction deficit of approximately 300,000 homes, prompting urgent calls for increased public housing and construction activity to stabilize the market.
Local view
In Germany, local stakeholders are closely watching the divergence between falling purchase prices and rising rents. The Institute of the German Economy (IW) notes that high interest rates are pushing households from the purchase market into the rental market, thereby driving up rents by 4.5% even as transaction prices in cities like Munich and Frankfurt cool. Meanwhile, Australian media is focusing on the "deep freeze" in sales volumes and sentiment, with analysts noting that the correction is broad-based across all state capitals.
Context & numbers
- Sydney Median Price: $1.66 million (down 4.7% in Q3).
- Munich New Build Price: €11,200 per m² (highest in Europe).
- German Rent Growth: +4.5% year-on-year.
- US Mortgage Rates: >7%.
- Portugal Housing Shortage: ~300,000 homes deficit.
On the radar
- Q1 2026 BIS Data Release: The Bank for International Settlements is expected to release updated global residential property price statistics in late November, providing a comprehensive view of Q1 2026 trends.
- Fed Policy Decisions: Global markets are watching the US Federal Reserve’s upcoming meetings for signals on interest rate cuts, which could directly impact affordability rankings in North America.
- UBS Bubble Index Updates: Following the September release that ranked Zurich and Tokyo as having the highest bubble risks, analysts are monitoring for any Q4 adjustments to these city rankings.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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