This version of the original article by Stephen Punwasi (betterdwelling.com) has been edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
Advanced economies left interest rates too low for too long, and are now trying to make up for lost time slowing the inflation they created, but also the global economy. This will have a big impact on interest-sensitive areas like real estate, which will be the first to experience the impact, notes GS.
GS notes that home sales have already begun to cool with the U.S. seeing a whopping 40% drop and, with higher rates in the pipeline, that’s expected to slow housing even further.
Falling home sales tend to result in falling home prices, but not all places have received the memo. Home prices are still rising in the U.S., Germany, and the U.K. but researchers expect prices to start falling there in the not-so-distant future…
They mentioned that home prices have already begun to fall in Canada, Australia, New Zealand, and Sweden with house prices falling the most in areas that had the most growth early in the pandemic.
Global economic growth is forecast to slow over the next few quarters, with home sales reinforcing the outlook and, while a tight housing market may be enough to avoid a slump, the rapid deterioration in affordability and large drops in home sales suggest that a housing downturn is a real risk.