South forest hill residences.The global housing boom may be weakening. Even taking inflation into account, we are still in a period of astonishing boom in global house prices.Please Visit: South forest hill residences to Get Your VVIP Registration Today!
In the year to the first quarter of 2022, house prices rose in 37 countries and fell in 22 countries, adjusted for inflation.
However, there are also clear signs of weakness that investors should pay attention to.
In real terms, the momentum of growth has obviously weakened. Of the 59 real estate markets in the world, only 20 are growing stronger than last year, while 38 are weakening. Simply put, if the housing market rises faster (or falls less) this year than last year, it will gain momentum. In real terms, most markets are rising at a slower rate than last year.
In fact, the housing boom may have begun to lose momentum. It’s not everywhere. But this global trend of prosperity seems to be waning. Coupled with the increase in inflation caused by the war in Ukraine over the past three months, the future direction is clear.
In the year ending the first quarter of 2022:
1. In the US, which has always been a key market, the momentum has been mixed, with the Case-Shiller index slightly stronger and the FHFA index weaker. Indicators of confidence are weakening.
two。. Europe’s real estate market is still active, but growth is slowing.
3. Asian property markets are mixed, losing more momentum than rising, despite strong growth in some markets.
4. The situation in the Pacific and Middle East markets is also mixed.
5. The Latin American market is weakening.
In the global house price survey up to the first quarter of 2022, according to inflation-adjusted data, the strongest real estate markets included Turkey (+ 30.3%), Russia (+ 18.78%), HCMC, Vietnam (+ 15.49%), the Slovak Republic (+ 12.88%) and Australia (+ 12.18%).
The countries with the largest year-on-year declines in house prices are Colombo (- 19.84%), Cambodia (- 19.15%), Bogota (- 11.55%), Morocco (- 10.57%) and Peru (- 8.35%). House prices in these countries are also adjusted for inflation.
In its World Economic Outlook update in April 2022, the International Monetary Fund (IMF) cut its global economic growth forecast for 2022 to 3.6 per cent, down from a previous estimate of 4.4 per cent and from last year’s strong growth of 6.1 per cent, while inflation soared as a result of Russia’s invasion of Ukraine.
Inflation has been a factor in the rise in house prices in many countries. The most obvious is in Turkey. Turkey’s inflation rates reached a terrible 61.4% and 73.5% in March and May, respectively. In the first quarter of 2022, Turkish house prices rose by 109.97%, even after adjusting for inflation.
Inflation also seems to be reflected in Russia, which rose 16.7 per cent in March from a year earlier, while real house prices rose 18.78 per cent.
But in practice, it is difficult to link house prices in most countries directly to the rate of inflation.
The response of central banks to inflation will be important. With the exception of Turkey, most economists blame today’s high inflation on supply-side factors such as oil shortages. If so, high inflation should be temporary, giving the central bank an excuse not to raise interest rates sharply. But what if these high inflation rates are not temporary? What if inflation spreads and suffers the consequences? By then, it may be necessary to raise interest rates sharply. So the possibility of raising interest rates is that many housing markets will collapse, and the collapse of the housing market will lead to the collapse of many economies.