Global home prices may fall next year in nine of 15 markets as higher rates jack up mortgages and tamp demand
- Prices are likely to drop next year in Australia, Canada, Denmark, Germany, France, the Netherlands, the UK and the US due to rising interest rates, Fitch Ratings says
- China, where prices had risen by the most since the Covid-19 pandemic was first reported in 2020, is seeing a reversal in fortunes as the property market is in crisis
Home prices worldwide are likely to fall in 2023, or increase at a slower pace at best, as higher interest rates jack up mortgage payments and raise the cost of living, according to the latest forecast by Fitch Ratings.
Prices are likely to drop next year in Australia, Canada, Denmark, Germany, France, the Netherlands, the UK and the US due to rising interest rates, extending their declines since the second half of 2022, Fitch said in a survey of 15 global markets.
Still, residential property prices will remain above pre-Covid levels in most of the countries surveyed. Supply is unlikely to surpass housing demand, as fewer homes come to the market for sale, exacerbating the pent-up demand in various parts of the world.
China, where prices had risen by the most since the Covid-19 pandemic was first reported in 2020, is seeing a reversal in fortunes as the property market was driven into crisis by a crackdown on debt. Still, any change is likely to be contained in the tightly regulated housing market amid stable mortgage rates, Fitch said.
Nominal home prices may drop by between 1 and 3 per cent next year, compared with 2 per cent this year, as China’s authorities rolled out a series of supportive measures to pop up the housing market, which pave the way for the orderly resolution of the current property crisis.