Residential real estate across the developed world appears vulnerable to falling prices for the first time in over a decade. After an unprecedented run-up in home prices this is what happens when central banks flips into interest rate hiking mode.
Need of sustainable solutions to be accessible to all:
The US won’t be at the epicenter of this housing pullback unlike the last time according to Goldman Sachs. Goldman Sachs has released various research on the housing downturn. At the end of 2023, the paper predicts a cash-like drop in home prices. It includes countries like New Zealand (-21%), Australia(-18%), Canada(-13%), USA(27%) saw home price drop.
Canada, Australia, New Zealand are countries clearly in the housing crash camp. It’s less pessimistic about G10 countries. In France, Goldman researchers predict that home prices will fall by around 6%. Home prices will remain unchanged in the UK. IN 2023, USA home prices will rise by 1.8%.
Where home prices are headed through the end of 2023:
According to Goldman Sachs home prices in countries like Canada are simply off the chart. US home prices climbed a more modest 18.9%. If we talk about the G10, home sales are falling. In G10, home price growth is slowing.
US regional housing markets will see home price declines. US home prices will either remain stable or fall as much as 5% from peak to trough according to an analyst Moody’s Analytics.
Moody predicts prices will decline by 5% to 10%. Moody also said overvalued regional markets would see 15% to 20% drop.
Goldman researchers also predict that the US housing market will end 2022 and 2023 down across the board. According to experts, the US will face a sharp decline in new home sales of (22%), and the US housing GDP(8.9%)will drop. Economic contractions would be severe in countries like New Zealand, Australia, Canada.