Goldman Sachs has made available for download their article, titled “The Global Housing Market is Starting to Wobble as Central Banks Hike Rates.” The article begins as follows:
The pandemic-induced housing boom appears to be cooling off.
From Toronto to Auckland, a slowdown in the housing market (the most interest-rate sensitive segment of the economy) is underway as interest rates in developed economies are set to climb rapidly, according to Goldman Sachs Research.
Mortgage rates spiked sharply since last summer in the U.K., Canada, New Zealand and U.S.; and given the likelihood of further rate hikes, borrowing costs for housing are likely to rise even further.
The housing picture in many of these countries shows a stark change underway, with already substantial declines in sales across developed economies. Home sales are down by 40% from their pandemic peak in the U.S., and by half in the U.K. Those declines in home sales are meaningful for prices in the near future because a 10 percentage point slowdown in house sales growth tends to be followed by a 2 percentage point slowdown in house price growth in around 6 months, Goldman Sachs Research estimates.
Click here to see the full article: “The Global Housing Market is Starting to Wobble as Central Banks Hike Rates.”
Posted by Will Frankenberry, Associate Editor, Wealth Strategies Journal.
Wealth Strategies Journal 