The global economic slowdown has sent property prices tumbling
Posted by Emvertex
Metropolises that have seen property prices tumble as a result of the global economic slowdown are attracting attention.If the downward trend continues, it could reduce the willingness of homeowners to spend.Then there is the fear of financial chaos.
The median price of a Manhattan apartment in central New York fell 5.8% to $999,000 in the fourth quarter from a year earlier, the first time it has fallen below the $1 million mark since the third quarter of 2015 (July to September), according to bloomberg.
The us federal reserve raised interest rates until the end of last year to prevent the us economy from overheating, making it difficult to take advantage of mortgage debt and affecting falling prices.China’s property investment boom, both at home and abroad, has also been driven lower by the country’s slowing economy.
Depressed property prices are seen in London, vancouver, Sydney, Singapore and Hong Kong. Beijing’s new home price index also fell in February from a month earlier.
In response to the deterioration in economic conditions following the 2008 financial crisis, massive monetary easing by the FRB and the bank of Japan, among others, pushed up stock and property prices.
Tightening policies such as FRB rate hikes, however, have changed the tide. In the us bond market on March 22, the yield of 10-year Treasury bonds was lower than that of three-month Treasury bonds. This was seen as a harbinger of recession and investors had to be cautious about the outlook.
In a report published in April 2018, the international monetary fund warned that after the property boom in many developed countries in the 2000s, “the global collapse in house prices led to huge losses for financial institutions”.
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