Are resi markets headed for an apocalypse?

As the ultra-wealthy snap up a bevy of houses in big cities all over the world, one market tanking becomes an international threat

Aug.August 04, 2018 10:00 AM

(Credit: Pixabay)

All for one and one for all is officially an appropriate slogan for the global housing market.

The International Monetary Fund is warning that, because the wealthy are parking money in various homes around the world, the fate of cities’ housing markets are increasingly linked together–meaning that if one takes a hit, it’s becoming more and more likely that other markets will too, as Bloomberg reports.

Why the downward trend? A confluence of factors ranging from Brexit to new taxes and tighter lending rules are combining to drag markets down. From New York to London, Beijing to Sydney, a downward spiral is beginning, albeit the symptoms look different in each city.

In London, properties values have dropped up to a third in some areas as a rush of new luxury apartments hit the market. It’s a familiar story for New Yorkers, who are facing down a massive oversupply in the high-end resi market with 11 percent more apartments on the market this year–or 7,000 units–compared to 2017–and there’s 4,600 more units on the way.

Meanwhile, in Beijing, government intervention is saddling the market with red tape that’s sent sales to a record low and wound up with older homes selling for higher prices than brand-new product.

Finally, in Sydney, tighter controls on borrowing have slowed hurried investors leaving many wondering what’s the rush to buy into one of the world’s most expensive markets. [Bloomberg]

Related Articles

There will be 70 agents based at the new office (Credit: iStock)

Compass opens Long Island City office as new-development sales surge

The Daily Digest - Tuesday

New life for Toys “R” Us, Masa Son is “embarrassed” with the Vision Fund: Daily digest

Nooklyn CEO Harley Courts (Credit: iStock)

Brokerage slashes agent commissions, delays payments after rent law change

The Daily Digest - Tuesday

NYC apartment prices hit 4-year low, Pacific Park developers reveal new plans: Daily digest

LeBron wanted it and California’s governor signed it. What the college athlete compensation law means to real estate

Racial inequality in homeownership across US is sharpest in New York: report

Governor Andrew Cuomo and Senator James Skoufis (Credit: Getty Images, NY Senate)

Owners of some residential properties can’t hide behind
LLCs anymore

Philip Seymour Hoffman and 1 Sheridan Square (Credit: Getty Images and Google Maps)

Philip Seymour Hoffman’s old West Village pad sells for $2.57M