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In Europe, UK house prices fell for the first time in 15 months, while Swedish house prices fell at their fastest pace in at least a decade.
In the Americas, US house prices have fallen at their fastest pace in 13 years, while prices in Toronto, Canada’s largest city, have fallen to their lowest level since October last year.
In Asian markets, South Korea is facing an “imminent real estate recession” that will be more severe than it was after the financial crisis of 2009-2014.
During the blockade, the British government announced a temporary tax cut to bail out the property market, sparking a buying frenzy in the market, pushing up average house prices by 31000 pounds, twice the tax cut.
Investors are also increasingly pessimistic about the housing market as the economic outlook darkens and former British Prime Minister Truss’s tax cuts have dented market confidence. Real estate portal Zoopla says demand for property has fallen 20 per cent since the so-called mini-budget, to its lowest level since the outbreak began.
The house price can no longer hold up. According to CCTV news, data released by the National Home Mortgage Association on November 1 showed that average house prices in Britain fell 0.9% month-on-month in October 2022, the first decline in 15 months and the biggest monthly decline since June 2020.
Simon French, chief economist at Panmure Gordon, an investment bank, predicts that British house prices will fall by 14% over the next three years, bringing real values back to 2013 levels. Bloomberg economists expect house prices to fall by about 10% next year.
This is reminiscent of the crash of more than 30 years ago. At that time, the British government announced a tax break for couples to buy homes, leading to a surge in demand in the property market and a surge in house prices. By the late 1980s, house prices were finally overwhelmed by an avalanche, and it took nearly nine years to return to their previous highs.
The situation in Sweden is similar to that in the UK, where the stimulus package has led to a brief housing boom. But that changed after the Riksbank began to raise interest rates.
The latest figures show that the Swedish property market is collapsing at its fastest pace since 2013.
Swedish state-owned bank SBAB said on Wednesday that transaction data from real estate listing website Booli showed that house prices were down 19% from their peak and apartment prices were down 13% as of last month. It also expects house prices to fall by about 20 per cent from their March peak, slightly more than Nordic banks and the Riksbank forecast.
House prices fell 4 per cent month-on-month in October and a seasonally adjusted 2.3 per cent. By contrast, the nominal decline in September was 2.6 per cent, the highest level in history at the time. Data show that house prices are falling across Sweden, with single-family houses in Gothenburg, Sweden’s second-largest city, falling the most, down 19 per cent since its peak.
