Here’s a great article about the international housing market featured by the Wall Street Journal. It may help us U.S. citizens feel a little better about the housing climate in our country:
‘Housing Markets around the world are losing steam. Across 23 countries, an index of inflation-adjusted home prices compiled by the Federal Reserve Bank of Dallas grew 1.8% in the third quarter of 2019 from a year earlier, down from a recent peak of 4.3% in 2016, according to an Oxford Economics analysis. In 18 large economies, world-wide residential investment dropped on a year-over-year basis for four consecutive quarters through September—the longest stretch of declines since the 2008-09 crisis, according to Oxford Economics’ analysis of national accounts. A key catalyst is the global slowdown over the past two years. “It matters because…the housing market is a big asset market, which has quite large potential impacts on consumer spending,” said Adam Slater, an economist at Oxford Economics Across the globe, home-price growth and residential investment are slowing, denting world economic growth and challenging the conventional wisdom that real estate is local. Idiosyncratic factors and country-specific policies are certainly influencing the pullback in housing markets world-wide. But as the IMF notes, home prices around the world have become increasingly synchronized, reflecting the increasing tendency for economic growth and interest rates to move in parallel across nations. Further, in a period of historically low interest rates after the 2008-09 recession, wealthy investors began swooping in to invest in properties in cities such as New York, London and Vancouver, making residential prices there more synchronized. Now, given factors like slowing global growth and a flurry of property-market regulations, price gains in luxury markets around the world are cooling.”
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