BENGALURU (Reuters) – The surge in global house prices is coming to an end as interest rates and the cost of living rise, according to a Reuters poll on housing, analysts said. Prices in several major markets need to fall by double-digit rates to be affordable.
Ultra-low interest rates and strong demand for remote workers have helped house prices exceed not only real wages in most major economies, but the rewards of their respective stock markets are now coming to an end.
What’s not over yet is a rise in consumer inflation, which is above most central banks’ target ranges and in several cases at multi-decade highs, setting the stage for more rate hikes in the coming months foundation. When hordes of new homeowners buy at the height of a multi-year housing boom.
“We’ve seen significant changes,” said Adam Challis, executive director of research and strategy for JLL’s EMEA region: “Of course, mortgage rates have gone from Rising record lows…(this) will start to take its toll on households. “
August 12-September 2 Reuters to 100 multiple real estate strategists Home prices in almost all countries will slow over the next two years by more than expected three months ago in nine major housing markets.
Although only India and Dubai are expected to show some margins Earnings, but these median estimates are nearly identical to
Despite a softened outlook, most analysts disagree with the collapse in home prices, as strong labor markets in the developed world are expected to prevent delinquencies from rising.
But most analysts say prices are already so high that even a low-single-digit rise from the low-single-digit forecast here, or in some cases an outright fall, would not be enough to cover them Affordable.
Supply has also not improved as home construction is not expected to keep up with demand.
“Affordability has deteriorated and will require considerable price adjustment to Really hitting the affordability metrics back to where we were six months ago,” said Liam Bailey, global head of research at Knight Frank.
Bailey said the housing market is most likely The near-term outlook is for turnover to slow to a trickle as sellers are reluctant to admit that the market is falling and they need to lower their asking prices.
Chart: Reuters poll – Global Real Estate Market (https://fingfx.thomsonreuters.com/gfx/polling/gdpzyxwwdvw/Reuters%100 Voting %20-%15Global%20Housing%20markets.PNG)
But even as prices start to fall in most markets, as predicted for next year, analysts are just asking how much the average price has risen over the past few years.
In Housing is rated expensive, and analysts say prices need to fall by double digits or close to that level to be affordable.
Canada, Australia and New Zealand, three most overvalued, survey shows of markets where average home prices have risen by 45%, 35% and 100 % during the pandemic, need to fall 17.5%, 17.5% and 20% , respectively, to return to affordable.[CA/HOMES] [AU/HOMES]
UK house prices need to fall by 8.5% to be affordable, according to opinion polls, the least developed among developed countries. [GB/HO MES]
In Germany and the US, rates are now rising sharply, these figures are % and 10%. [US/HOMES]
ING Chief International Economist James Knightley said of the U.S. market, “With borrowing costs almost doubling, we’re seeing Demand for mortgage applications to buy a home has fallen sharply. At a time when supply has really increased.”
“This is some sharp corrections to several previous ‘hot spots’
(Other reports on Reuters’ quarterly housing market survey:)