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Global Housing Market Sees Synchronized Slowdown
February 4, 2020
Much of the global economic slowdown has been attributed to manufacturing and trade tensions, but there is another hurdle to synchronized global growth: the housing market.
The Federal Reserve Bank of Dallas has compiled an index of home prices across 23 countries. This index shows that globally home prices grew at just 1.8 percent in the third quarter of 2019 from a year prior. Analysis from Oxford Economics found that in 18 of the world’s largest economies, investment in residential real estate has dropped year-over-year for four consecutive quarters, the longest stretch since the economic crisis of 2008.
The IMF has noted increased synchronicity in home prices, reflecting the increasing tendency for economic growth and interest rates to move in parallel. Global cities like London and New York have seen even more synchronicity. In the wake of the 2008 financial crisis, wealthy investors looking for better yields have purchased real estate in these cities as an investment.
