Global Scenarios Service: Housing Market Crash

Global economic prospects have deteriorated further. 

Since we published the Q3 Global Scenarios Service in August, we have reduced our baseline world GDP forecast for 2023 to 1.2% in 2023. A worse near -term outlook for Chinese GDP growth means that we now expect a technical global recession, with per capita GDP falling in both Q4 2022 and Q1 2023.

In this scenario, rising interest rates and unemployment lead to sharp falls in house prices. Amid the fall-out, the global economy enters a more severe recession.

The decline in house prices triggers falls in residential investment. Consumer spending also weakens as credit conditions tighten and worsening investor sentiment drives equity prices lower.

To explore the scenarios quantifying key risks to the global economy this quarter, download the executive summary of the report.