A majority of analysts polled by the Reuters news agency have presented a subdued outlook for the significant global housing markets and identified the biggest hurdles to the recovery in the coming years to be the high unemployment because of the coronavirus pandemic and lockdowns and low immigration.
The analysts forecast a fall in house prices for the rest of the year in the markets of Australia, India, Dubai, Britain, Canada and the United States as there are several risks still at play while the trend will also continues into the next year under a worst-case economic scenario and resurgence of the pandemic.
More than 480,000 people all across the world have been killed by the pandemic while infecting a total of 9.3 million people with millions having lost their jobs. The pandemic has also thrown the global economy into a deep depression with an expected slow recovery as the novel coronavirus continues to spread in stages.
This slump in house prices is being anticipated despite a host of fiscal and monetary stimulus by various governments, often up to unprecedented amounts. There has however been a rally in stock markets from late-March troughs as many countries slowly resumed their economic activities.
The poll that was held between June 9 and 24 globally among more than 100 property market experts, showed that there was an increase in fears of a prolonged drop in transaction activity compared to three months ago despite the predictions that the average home prices in a few countries polled would rise this year or next or both.
"Our general view is that prices across most major markets will fall, probably around 5 percent ... and in some it could be more significant," said Liam Bailey, global head of research at property consultancy Knight Frank in London.
"The risks are to the downside. The big thing that we don't know is the potential for a second outbreak and lockdown. And if we get another significant lockdown, then there is every chance that prices would fall again."
The poll predicted that one bright spot in the otherwise gloomy outlook will be the housing market in the United States which was at the epicentre of the 2008-2009 financial crisis which caused a global recession, as analysts expect a growth in house prices against the economic downturn. This was because of record low mortgage rates and limited supply.
The poll of the experts also identified high levels of unemployment to be the largest hurdle that would be faced by housing markets over the coming year with two-thirds of the more than 100 analysts across the countries predicting continued unemployment levels in the near future. More than 10 percent said lower immigration would dampen housing markets.
"Rising unemployment and the risk of redundancies is likely to have a negative impact on the housing market over the coming months. Many people will choose to put off any major financial decisions, including buying or selling a house, until they are clearer on their income security and the economic outlook has improved," said Jamie Durham, an economist at consultancy firm PwC in London.
"The impact on the housing market is likely to be felt disproportionately in areas with large hospitality and tourism sectors, which have been most affected by the virus."
(Source:www.aljazeera.com)
The analysts forecast a fall in house prices for the rest of the year in the markets of Australia, India, Dubai, Britain, Canada and the United States as there are several risks still at play while the trend will also continues into the next year under a worst-case economic scenario and resurgence of the pandemic.
More than 480,000 people all across the world have been killed by the pandemic while infecting a total of 9.3 million people with millions having lost their jobs. The pandemic has also thrown the global economy into a deep depression with an expected slow recovery as the novel coronavirus continues to spread in stages.
This slump in house prices is being anticipated despite a host of fiscal and monetary stimulus by various governments, often up to unprecedented amounts. There has however been a rally in stock markets from late-March troughs as many countries slowly resumed their economic activities.
The poll that was held between June 9 and 24 globally among more than 100 property market experts, showed that there was an increase in fears of a prolonged drop in transaction activity compared to three months ago despite the predictions that the average home prices in a few countries polled would rise this year or next or both.
"Our general view is that prices across most major markets will fall, probably around 5 percent ... and in some it could be more significant," said Liam Bailey, global head of research at property consultancy Knight Frank in London.
"The risks are to the downside. The big thing that we don't know is the potential for a second outbreak and lockdown. And if we get another significant lockdown, then there is every chance that prices would fall again."
The poll predicted that one bright spot in the otherwise gloomy outlook will be the housing market in the United States which was at the epicentre of the 2008-2009 financial crisis which caused a global recession, as analysts expect a growth in house prices against the economic downturn. This was because of record low mortgage rates and limited supply.
The poll of the experts also identified high levels of unemployment to be the largest hurdle that would be faced by housing markets over the coming year with two-thirds of the more than 100 analysts across the countries predicting continued unemployment levels in the near future. More than 10 percent said lower immigration would dampen housing markets.
"Rising unemployment and the risk of redundancies is likely to have a negative impact on the housing market over the coming months. Many people will choose to put off any major financial decisions, including buying or selling a house, until they are clearer on their income security and the economic outlook has improved," said Jamie Durham, an economist at consultancy firm PwC in London.
"The impact on the housing market is likely to be felt disproportionately in areas with large hospitality and tourism sectors, which have been most affected by the virus."
(Source:www.aljazeera.com)
