Japan, Italy are only losers in 2020 as home prices set to fall on Olympics, GDP hangovers: Fitch
- Home prices to fall 2 per cent in Japan as foreign demand seen weakening after the Summer Olympics in July next year
- Italy’s economy remains sluggish despite coming out from a recession in 2018 as home price gains bypass poorer regions
Japan and Italy are likely to register the biggest pullback in home prices next year, reflecting key shifts in market fundamentals in the economies, according to Fitch Ratings.
New condo prices in Japan are forecast to drop by 2 per cent next year as demand from foreign investors peters out after the Summer Olympics in Tokyo, it said. In Italy, growth near stall-speed and double-digit unemployment rate are likely to restrain home prices in cities including Rome.
Fitch forecasts nominal home prices to fall only in the two countries in a global housing and mortgage outlook in 24 countries across five continents, according to a December report published last week.
Japan’s success in winning the rights to host the next Olympiad has caused an oversupply of flats in the secondary market amid a surge in demand for accommodation, Fitch said. Investment demand from non-residents is expected to deflate after the event finishes in August, it added.
“The second-hand supply now exceeds the supply of new condos,” Hitoshi Hibino, a structured finance analyst, said in the report. Domestic buyers are also going after second-hand properties, thus compressing prices for new condos, he added.