New Zealand has slumped to near the bottom of the rankings in the latest Knight Frank Global House Price Index, despite being second during the 2021 housing boom.
In the second quarter of this year, New Zealand came in fourth from the bottom, in 53rd position out of 56 countries.
New Zealand faced a drop of 9.1 percent in house prices over 12 months, a drop of 2.9 percent over six months and an increase of 1.3 percent over three months.
In 2021, the country was second to the top on the index, with a price index of 22.1 percent in the year to March.
Sitting lower on the table were Finland and Sweden, with South Korea at the bottom - seeing an annual price fall of 12.8 percent, although prices bounced back 2.3 percent within the quarter.
Turkey was at the top of the table, with house prices up an outstanding 96 percent in a year, "boosted by underlying sharp inflationary pressures", the report read.
Lithuania sat behind on 15.3 percent with Croatia and Greece at 14 percent.
Knight Frank's head of global research Liam Bailey believes the rapid approach of peak interest rates around the world was coinciding with a modest improvement in housing market conditions in some key global markets.
"With the full effects of rate tightening still to be felt a more substantial improvement in housing market liquidity and price growth is still some way off," Bailey said.
However, he said the medium-term outlook for housing markets is "likely to be dominated by low supply and strong demand which will add to upward pricing pressures from late 2024 and beyond".
The latest index update said rising interest rates had had a big impact on prices, transaction volumes and market liquidity.
"Financial and credit conditions have tightened, borrowing rates have risen, and as a result house price growth has moderated and in many markets turned negative."
However, according to Knight Frank researchers, there are emerging signs of a stabilising of market conditions as peak interest rates approach.
They found strong demographic trends, limited houses for sale, and delays to new builds were all providing structural support for pricing.
This was seen in markets "like Australia, the US and Canada - which have seen price growth of 2.9 percent, 3.7 percent and 6.1 percent over the past quarter".
Globally, the annual growth rate heightened from 2.9 percent to 3 percent per quarter in the three months.
However, researchers said people shouldn't 'overstate' the shift in housing market conditions.
"Even if policy rates are not raised further, the effects of past rises will continue to work their way through economies for some time."
Researchers say despite the easing of 'downward pressure' on house prices being welcomed by many homeowners, "a full recovery is still a long way off".
