Are we heading towards another housing bubble? It’s a growing concern due to rising real estate prices around the world, which has experts wondering if another global economic collapse is inevitable.
The numbers show that housing prices in the United States are growing at the fastest rate in nearly three decades, but America is not alone when it comes to skyrocketing housing prices. The average price of a house in the United Kingdom increased by more than 14 percent over the last year, and that level of growth is occurring in housing markets all across the globe, with New Zealand, Sweden, and Canada’s housing markets experiencing the largest growth.
According to Bloomberg Economics, real estate prices around the world are growing at rates not seen since the financial crisis in 2008, which is causing some people to wonder if we are heading towards another housing market bubble.
“A cocktail of ingredients is sending house prices to unprecedented levels worldwide,” economist Niraj Shah wrote in the report. “Record low-interest rates, unparalleled fiscal stimulus, lockdown savings ready to be used as deposits, limited housing stock, and expectations of a robust recovery in the global economy are all contributing.”
The biggest reason housing prices are rising at such historic rates is the global pandemic, as record-low mortgage rates combined with an increased desire to leave city life behind and buy a home in the suburbs. Millennials were beginning to migrate towards the suburbs even before the pandemic and that only increased over the last 16 months, especially with remote work becoming a commonplace practice due to COVID.
Whether or not we are headed towards a global real estate bubble remains to be seen, as some experts believe that prices will level out as we appear to be slowly exiting the pandemic. However, if prices continue to grow, we could be heading towards a repeat of 2008, which resulted in millions of people losing their homes around the world. And either way, it sure seems like a really good time to sell your house.