Union city condos.Interest rates are getting higher and higher. The initial release of water caused the global bubble to take off and set off a boom in the global property market; however, more than 60 central banks around the world have raised interest rates by 50 basis points or more so far this year, putting an end to the property boom.Please Visit: Union city condos to Get Your VVIP Registration Today!
From Europe to Asia to Latin America, the property market is cooling rapidly, and house prices are falling as central banks actively raise borrowing costs to curb soaring prices.
For central banks around the world, squeezing bubbles out of bubbly property markets is part of controlling high inflation. Falling house prices usually lead to lower household spending, easing upward inflationary pressures as construction production slows, bank lending declines and property sales fall, and overall economic activity slows.
Tiff Macklem, governor of the Bank of Canada, said last month that he expected housing activity to slow. Frankly, this will be healthy because the current economy is overheating. But economists believe the risk is that central banks raise interest rates too aggressively, slowing the global property market and eventually bursting the bubble with unpredictable effects.
Interest rates are rising rapidly and the real estate market is not as expected.
According to the latest media reports, property markets in countries such as Canada, New Zealand, Australia and Sweden look particularly vulnerable based on indicators such as the share of real estate in their economy, recent prosperity and the sensitivity of buyers to rapidly rising interest rates.
Average seasonally adjusted house prices in Canada fell nearly 8% in June from their peak earlier this year, in New Zealand, by 8% from their peak at the end of 2021, and in Sweden by 1.6% month-on-month in May, the biggest monthly decline since the outbreak began.
Global house prices rose 19 per cent between the first quarter of 2020 and the first quarter of this year, or 10 per cent adjusted for inflation, according to the Knight Frank global house price index, a real estate consultancy. Inflation-adjusted global house price growth slowed to 3.9 per cent year-on-year in the first three months of 2022, with declines in countries such as Brazil, Chile, Spain, Finland, South Africa and India.
While the economy is slowing, many countries are still tightening monetary policy further, and mortgage rates are expected to follow suit.
On Wednesday, the Bank of Canada raised interest rates by 100 basis points, raised the policy rate to 2.5%, and warned that there would be more rate increases in the future. Tiff Macklem, governor of the Bank of Canada, said cooling housing was crucial to reducing inflation.
Canadian mortgage rates rose to their highest level since 2009 as the Bank of Canada violently raised interest rates, and property transaction activity cooled rapidly from its previous frenzy. Home sales fell 24% in June from a year earlier, according to the Canadian Real Estate Association.
Real estate agency Realosophy says home sales in Toronto fell 40 per cent in may from a year earlier and are now at a 20-year low. The median price of homes in Toronto (excluding apartments) is down nearly 20% from its peak in February.