“The world’s bubbliest housing markets are flashing warning signs”
June 23, 2022
“As central banks around the globe rapidly increase interest rates, soaring borrowing costs mean people who were already stretching to buy property are finally reaching their limits. The effects are being seen in countries such as Canada, the United States and New Zealand, where once-hot residential real estate markets have suddenly turned cold.
It’s a sharp reversal from years of surging prices fuelled by rock-bottom mortgage rates and government stimulus, along with a pandemic that popularised remote work and sent homebuyers on the hunt for bigger spaces. An analysis by Bloomberg Economics shows that 19 OECD countries have combined price-to-rent and home price-to-income ratios that are higher today than they were ahead of the 2008 financial crisis – an indication that prices have moved out of line with fundamentals…”
This is why people should live below their means. Good times come and go. Don’t be caught by the bad times.