Infographic: Three reasons why house prices are set to fall in 2023
We think the stabilisation in global house prices is likely to prove short-lived. And we expect real house prices in the G7 to fall 6% this year and another 3% in 2024.
What you will learn:
- Already, the factors that drove the uptick in transactions earlier this year, such as a fallback in mortgage rates, are wearing off.
- Meanwhile, other drivers such as valuations, the resetting of fixed-rate mortgages to higher rates, and forecast rises in unemployment all point towards further price declines.
- Comparing house price levels and price/rent ratios with their long-term filtered trends suggests they are still 8%-10% above “fair value”.
- The full impact of rising short-term rates has yet to feed through to mortgage borrowers in most major economies. Markets like the UK, New Zealand, and Australia face a large share of outstanding mortgages resetting to much higher rates in 2023-2024
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