Global Housing Market Pain Has Echoes of a Crash 30 Years Ago
UK Canada China Australia Sweden
Bloomberg 20 October 2022
A global house-price slump is coming
It won’t blow up the financial system, but it will be scary
Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic.
Yet today if your wealth is tied up in bricks and mortar it is time to get nervous.
In America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002.
The good news is that falling house prices will not cause an epic financial bust in America as they did 15 years ago.
Some other places, such as South Korea and the Nordic countries, have seen scarier accelerations in borrowing, with household debt of around 100% of gdp.
Worldwide, homes are worth about $250trn (for comparison, stockmarkets are worth only $90trn), and account for half of all wealth.
The Economist Edotprorial 20 October 2022
https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
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