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London, Paris, San Francisco… Falling property prices

Under the effect of inflation and in the face of economic uncertainties, the value of the global real estate market has fallen, reports “Le Figaro”.

By The

Inflation and economic uncertainty are driving down global real estate prices. (Illustrative photo).
© RICCARDO MILANI / Hans Lucas / Hans Lucas via AFP

. to 1€ the 1st month

Lhe real estate price boom has come to an end. Under the effect of the slowing economy, mortgages becoming more expensive, demand for housing has fallen, leading to an easing in property prices after several years of growth, relays Le Figaro. In an October Financial Stability Report, the IMF referred to a “tipping point” for global real estate. The most pessimistic scenario would see a fall in prices of 25% in emerging markets and more than 10% in advanced countries.

A situation that many countries are already experiencing. For example, in China, real estate sales have fallen by 43% this year. Prices drop in Sweden, Germany, Canada, New Zealand or Australia. They are declining in half of the 18 main markets, according to Oxford Economics. Same development in the United Kingdom, which saw demand fall by 44% and sales by 28%. Prices have been falling for three months and the government expects them to decline by 9% by next year.

An uneven decline at the national level

“Overall, these are the most worrying forecasts for the real estate market since 2007-2008. Some countries can expect a moderate decline and others face much steeper falls, in the range of 15-20%,” said Adam Salter of Oxford Economics. This drop in prices varies nationally. “Cities are seeing significant price drops from their 2021 peak, while others are still seeing double-digit increases,” said Kate Everett-Allen, head of residential research at Knight Frank.

READ ALSOReal estate: what is really going down

Housing demand will also suffer from weak consumer confidence as the Russian-Ukrainian conflict continues to fuel economic uncertainty. A sharp fall in prices, greater than 15%, would be likely to put banks in difficulty, particularly in France, Italy, Spain and the Netherlands. A significant drop in prices would also have consequences for social housing in the United Kingdom, which is financed by groups that derive most of their income from property sales on the market. But this fall in prices will not allow more households to access property, their purchasing power being reduced by inflation.

The editorial staff of Le Point advises you

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