Global Housing Faces Tough Year in 2021: Reuters
Most major housing markets won't keep up with consumer price inflation in 2021 and are faced with multiple downside risks despite rising strongly this year amid the coronavirus pandemic and rock-bottom interest rates, Reuters polls showed. Over 1 million people have died and more than 33 million
Published -
Oct 2, 2020 4:44 AM
Most major housing markets won't keep up with consumer price inflation in 2021 and are faced with multiple downside risks despite rising strongly this year amid the coronavirus pandemic and rock-bottom interest rates, Reuters polls showed. Over 1 million people have died and more than 33 million have been infected by the coronavirus which has led to supply chain disruptions, stalled economic activity, pushed the world economy into its deepest recession and left many millions jobless. But many governments around the world have lifted lockdown restrictions and reopened parts of their economies in the past few months. An unprecedented amount of fiscal and monetary stimulus has boosted housing market activity. Indian and Australian house prices were forecast to fall this year and next on higher unemployment, while weak consumer confidence and fears of a second wave of infections have dampened chances for a sustainable rebound in China. The Federal Reserve's latest policy shift along with the limited supply of affordable homes was expected to support the US house prices this year in an otherwise gloomy economic backdrop, with predictions for 2021 less optimistic. But lack of appetite for lending for house purchases or tighter credit standards, due to worries about borrowers' creditworthiness, may challenge the monetary policy transmission into the real economy. British home prices were expected to mark a reversal and stagnate next year after a 2.0 percent rise this year. Canadian home prices were set to rise slower next year than in 2020 as higher unemployment and lower immigration levels cool the market down. "For the rest of 2020, the risks are probably tilted to the upside, with the large degree of fiscal stimulus helping affordability," said ANZ senior economist Felicity Emmett in Sydney. "But in 2021 when mortgage deferrals end and unemployment peaks there is a risk of larger falls."
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