The global housing market is going down: Here’s what you need to know

Photo by Michael Tuszynski

The COVID-19 pandemic saw the global economy, including the housing market, take an unprecedented turn. It was a time of darkness and despair, as well as uncertainty for many markets around the world. During the pandemic, house prices were all over the place and no one knew what was going to happen. Many predictions were a lot worse than the actual reality of things. While everything around the world came to a halt, the market was not impacted as badly as initially predicted. The pandemic brought about a lot of disruption, however, the market itself did not suffer too much. 

Inevitably, the prices of houses dropped, and so did the number of sales, as everyone went into lockdown and put their life on pause. Other things were also put in place, such as a holiday for stamp duty. It didn’t take long for the housing market to recover though. As soon as restrictions were lifted, the housing market bounced back extremely quickly. The prices of houses even began to rise shortly after restrictions were eased. The housing market in the UK reached new highs, which were above the level before Covid. 

Just as the world thought the housing crisis was over, things have taken another turn. It appears that the global housing market is going downhill. Here’s what you need to know.  

Rising prices 

One of the biggest factors that impacted the global housing market is the increase in prices. From energy to food supplies, prices have been rising everywhere, leaving Governments to declare a cost of living crisis. It has become much harder for people to afford to live, heat their homes and put food on the table for their families. If people are struggling to afford necessities, investing in property is going to be the last thing on their minds. 

One major factor contributing to this crisis is the Russia and Ukraine war, as these actions shocked the economy and as a result, inflation surged. Banks and Governments all around the world are reevaluating and tightening their policies around money. 

Rising mortgage prices

Not only is the cost of living much higher, but mortgage rates have also surged. This has made it much less affordable for people to invest in a property and commit to paying such a high mortgage rate. This advancement has become a threat to economies all over the world. Banks are going through this to try and tackle the pressure of prices around tight lending standards, the soaring cost of borrowing, and much more. This is prompting a huge decline in house prices. In the UK, the turmoil around mortgages was triggered by the political crisis and proposed tax cuts. 

What does the future hold? 

The housing market will begin to cool off around the world. Individual countries will have different policies put in place to try and stabilise the market and help the economy. In the UK, with the appointment of the new Government, markets have started to calm down, albeit they are still higher. 

With things starting to look up, make sure you monitor the market closely, so you can find the best time to buy and sell properties.