Global housing markets are syncing up — and slowing down

Residential investment declined year over year for four straight quarters

TRD NATIONAL /
Jan.January 28, 2020 09:50 AM
From top: London, New York and Hong Kong (Credit: Unsplash)

From top: London, New York and Hong Kong (Credit: Unsplash)

Residential investment in 18 large economies posted year-over-year declines for four straight quarters through last September (Credit: Unsplash, iStock)

The global economy grew at its slowest rate since the financial crisis last year. A big part of the slowdown came from cooling housing markets around the world, which have increasingly started moving in sync.

Residential investment in 18 large economies posted year-over-year declines for four straight quarters through last September, the Wall Street Journal reported citing an analysis from Oxford Economics. This string of declines was the longest the world economy has seen since 2008 and 2009.

“The housing market is a big asset market which has quite large potential impacts on consumer spending,” Adam Slater of Oxford Economics told the Journal. “It tends to be a sector when it booms, it booms; when it busts, it busts.”

In addition to a slowdown in the broader economy, residential markets have been constrained by affordability problems and heightened geopolitical uncertainty, including the U.S.-China trade war, Brexit, and protests in Hong Kong.

According to the International Monetary Fund — which projects worldwide economic growth to rebound somewhat this year — low interest rates have contributed to greater synchronization between housing markets, as yield-hungry investors scoop up real estate across the globe. A similar degree of synchronization has long existed in global stock and bond markets.

Home price increases have also been limited by new regulations. Vancouver introduced a foreign buyer tax in 2016, while New Zealand banned overseas investors from buying existing homes altogether in 2018. Meanwhile, Seoul has tightened restrictions on mortgage lending and capped residential prices. [WSJ] — Kevin Sun


Related Articles

arrow_forward_ios
JPMorgan Chase CEO Jamie Dimon (Getty, iStock)

JPMorgan wants to invest $700M building rentals in Sun Belt states

JPMorgan wants to invest $700M building rentals in Sun Belt states
(iStock)

Mortgage applications drop despite posting annual growth

Mortgage applications drop despite posting annual growth
The European Union’s top court backed a Parisian measure that regulates renting second homes on Airbnb. (iStock)

Airbnb hosts in Europe may hit road bump when renting second homes

Airbnb hosts in Europe may hit road bump when renting second homes
(iStock)

Déjà vu: New home sales hit 14-year high in August

Déjà vu: New home sales hit 14-year high in August
(iStock)

A foreclosure crisis is looming — but here’s what’s different from 2008

A foreclosure crisis is looming — but here’s what’s different from 2008
Sales of existing homes in the U.S. hit a 14-year high last month, according to a new report. (iStock)

US home sales hit 14-year high

US home sales hit 14-year high
An increase in mortgage applications came despite interest rates ticking up (iStock)

Applications for home mortgages surged last week

Applications for home mortgages surged last week
The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

US housing supply reaches nearly 40-year low

US housing supply reaches nearly 40-year low
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...