Global housing prices are falling
The global housing market, which swelled during the pandemic period, started to decline due to rising interest rates and demand concerns. According to data released today, house prices in the UK have fallen the hardest since February 2021.
Housing prices in England fell for the second month in a row as the rise in interest rates hit the property market. Thus, the sharpest drop in UK housing prices in 20 months took place.
Average home prices fell 0.4 percent in October from the previous month, mortgage lender Halifax said today. Thus, the biggest decrease since February 2021 has occurred. House prices fell 0.1 percent on a monthly basis in September. The annual increase in housing prices was 8.3 percent.
In the past weeks, it has been observed that housing prices in the USA have fallen sharply. In parallel with the sharp rise in housing loan rates in the USA, there was a historical decline in housing prices.
According to the S&P Core Logic Case-Shiller index data released at the end of October, housing prices decreased by 1.3 percent in August. The annual rate of increase in housing prices, which was 15.6 percent in July, dropped to 13 percent in August. In the USA, the average interest rate for 30-year mortgages (housing loans) rose above 7 percent, hovering near the highest levels since 2002.
A DECREASE IS EXPECTED IN EUROPE
In addition to the USA, housing prices are expected to decrease due to rising interest rates and recession concerns in Europe. In previous weeks, the European Central Bank (ECB) also stated that changing consumer preferences due to the pandemic and the increase in interest rates could help soften euro area real estate prices.
While the ECB abandoned its extremely loose monetary policy, which it has maintained for many years due to inflation, according to economic models, it is thought that a one-point increase in the interest rates of housing loans may lead to a decrease of approximately 9 percent in housing prices in two years.