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But now, most of the world’s economies are aggressively raising interest rates, mortgage rates are rising rapidly, demand for home purchases is falling, and the global housing market is gradually becoming sluggish.
The data show that house prices have fallen sharply in most of the G10 countries in recent months, such as Australia, Canada and New Zealand. House prices in other countries, though not falling, have slowed sharply, such as the biggest slowdown in June in the United States since 1970.
This is also confirming Goldman Sachs’ previous judgment that a hard landing in the global property market is a risk that cannot be ignored.
The Bank of New Zealand began raising interest rates in October to control persistently high house prices and inflation.
House prices in new Zealand have been falling recently and are now down 6% from their peak in November, as surging mortgage rates dampen demand from buyers.
House prices in new Zealand fell 2.5% in the three months to July, the biggest quarterly decline since the financial crisis in October 2008, according to the latest data from residential property information provider CoreLogic on Wednesday.
It is worth mentioning that house prices in new Zealand have been falling for four consecutive months, falling 0.9% in July from a month earlier, although new Zealand house prices rose 9.5% in July from a year earlier, but still the lowest annual increase since November 2020.
In addition to New Zealand, house prices in Australia and Canada are also falling rapidly.
House prices in Australia’s major cities Sydney and Melbourne are falling sharply, with Sydney’s property market falling for six months in a row.
Of all cities since the RBA first raised interest rates in May, house prices in Sydney fell at the fastest pace in July, the sharpest decline in nearly 40 years.
For Canada, British Columbia and Ontario, the most expensive cities in Canada, are facing severe house price declines since the central bank began raising benchmark interest rates from record lows in March.
Robert Hogue, an economist at Royal Bank of Canada, said the Canadian housing market was facing a “historic” correction and expected benchmark Canadian house prices to fall more than 12 per cent from their market peak by early next year, more than in any of the four national recessions in the past 40 years.
In addition, although u.s. house prices are still rising, the annual increase in u.s. house prices slowed to 17.3% in June from 19.3% in may, the biggest drop since 1970, according to mortgage software Black Knight.
It is worth noting that the recent cooling of US house prices has even exceeded that of the financial crisis. During the recession triggered by US real estate in 2007-2009, house prices cooled by 1.19 per cent in a single month.
The recent housing market performance in G10 countries is confirming Goldman’s previous judgment.
In June, Goldman Sachs concluded that “the global property market is likely to be on the track of a hard landing” after analyzing house price momentum, major home sales, housing affordability and supply and demand fundamentals in G10 countries.