Home News Some real estate markets seen falling as global frenzy fades – Reuters poll

Some real estate markets seen falling as global frenzy fades – Reuters poll

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Bengalle / London, June 1st (Reuters)-During the pandemic as people scrambled to buy more living space as interest rates rise and home price inflation is expected to fall. Market experts have shown that the paced global real estate market frenzy is likely to end.

According to analysts covering nine major global real estate markets, a 50% increase in prices over the past few years is nearing its end, with some countries likely to turn to a gradual decline in 2023.

But they also say that falling prices won’t make homes more affordable, especially for first-time buyers, just as living costs soar and mortgage rates rise. For the first time in the life of a young man.

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Liam Bailey, Head of Global Research at Knight Frank, said:

“The question is whether there is a risk of a kind of crash scenario in a particular market.”

So far, most real estate experts haven’t even predicted a 10% correction in home prices, instead housing inflation has slowed significantly, most often faster than the rate at which consumer prices are currently rising. I am sticking to the view that it will be lower.

Wages are unlikely to immediately match any of these inflationary trends, so it is very much among analysts about the record of home prices over the past few years and the impact of high interest rates on basic affordability. There is a strong agreement.

More than two-thirds of analysts who answered additional questions, or 83 out of 119, say that affordability for first-time buyers will worsen or significantly worsen over the next two years. The remaining 36 said it would improve.

Even real estate markets like India and Dubai avoided the worst-case pandemic panic buying and double-digit high annual prices in markets like the US, Canada and Australia, but analysts still I agree that affordability will worsen. NZ / HOMES

Reuters Poll-Global Housing market.png

Inflation challenges

Some of this has to do with the cost of building a new home, but in most cases it isn’t built fast enough to keep up with demand.

The soaring costs of supply chain disruptions faced by all companies around the world are passed on to first-time buyers in much the same way that consumers pay more for everything they buy. Is set to.

“The same inflationary challenges, especially in the construction market, and the supply chain problems that continue to plague developers and homebuilders, have not been alleviated to some extent,” said Adam Charis, executive director of research. rice field. EMEA’s strategy at JLL.

“In fact, in the short term, it’s very likely to get worse as people come back to the city and become more excited about their choices for city life.”

Sure, analysts are generally reluctant to predict the thinking behind consumer behavior, but people have begun to bid on real estate during the blockade of COVID-19. rice field. Few people expected it to happen.

In the future, there seems to be little reason to predict that existing homeowners who will wipe out home wealth from rising prices will be far less likely to act on the desire to return to urban life.

As a result, first-time buyers who find it difficult to come up with a deposit for most real estate of a generation are in a situation of worsening year by year. Even if the price goes down, that may be true.

“Your purchase price may go down … but in reality the cost of a loan service may not actually go down with that price,” added Knight Frank Bailey.

People in most countries, especially herds of young people, have resigned from renting for ownership. But housing shortages have also pushed up rents everywhere.

When asked what the affordability of the home leasing market would be in the next two years, more than 80% of analysts, or 82 out of 99, said it would worsen. The rest said it would improve.

(For another story from a Reuters quarterly housing market poll 🙂

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Report by Hari Kishan; Jonathan Cable, Shrutee Sarkar, Indradip Ghosh, Prerana Bhat, Vijayalakshmi Srinivasan, Milounee Purohit, Vivek Mishra, Arsh Mogre, Anant Chandak, Md. Additional reporting and polling by Manzer Hussain, Susobhan Sarkar.Edited by David Holmes

Our criteria: Thomson Reuters trusts the principles.

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