Property prices in the western world mark a recession

A very short post to present the trend of property prices in some of the advanced countries. This is a very important indicator of economic performance: growing economies, with greater wealth for families, are able to pay higher prices for houses. When, on the other hand, the economic signals are not positive and expectations are gray, then people don't buy real estate or try to sell what they have.

The fact is that real estate markets in several countries that, until yesterday, were growing, are now falling, and in some cases, in free fall

At the end of 2022, France also saw a drop in the value of properties, in all types, as well as in the average

France has a credit sector exposed to real estate, and its deflating could have consequences for banks across the Alps.

Curiously, among the markets that have not experienced a decline (at least according to the Idealista.it index) there is Italy, which has not had a boom previously, but, at least, is not collapsing now.

The decline in the real estate market will affect economic growth in several ways:

• first of all there will be the wealth effect, whereby families, seeing the depreciation of their properties, will feel poorer and will contain consumption,
• therefore there will be an effect on the credit sector with the risk of a growth in non-performing loans and therefore with a decrease in the funds available for lending not only to real estate but also to commercial credit;
• therefore there will be an effect on the construction sector, with a slowdown in new projects and renovations.

We will soon see if these property values ​​are a sign of an impending recession.

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The article Property prices in the western world mark a recession comes from Scenari Economici .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/i-prezzi-degli-immobili-nel-mondo-occidentale-segnano-recessione/ on Wed, 12 Apr 2023 08:00:13 +0000.