However, nothing lasts forever, and there are reasons that may make 2022 a difficult year for global real estate markets, according to the website «National». He says that the rapid spread of the "Omicron" mutation threatens to force another round of closures in different parts of the world, and this will force many who intend to buy new properties to think again.
1: A source of concern
Inflation is a greater source of concern in 2022, with consumer prices growing by 6.8% in America, 6% in Germany, and 5.1% in Britain, and many know that real estate values today have already been pumped through more than 12 years of low-interest and low-cost financing.
Today, with an interest rate on home loans of 2%, prices may not remain at a low level for long, and if other central banks follow the Bank of Britain to raise interest rates (even by only 0.25%), and mortgage rates rise, the demand for real estate will drop.
So, will anyone who is planning to buy a property dare to take the initiative and take a risk? Or will he wait for a bargain after assuming a long-awaited price crash? It really is baffling!
2: Real estate Performance
However, according to Kate Allen, head of international housing research at Knight Frank: Real estate prices in the world's major cities will rise in 2022, but their growth rate will decrease. It expects prices to rise by an average of 9% in 2021 and 7% in 2022, adding: Interest rates may rise next year, but this will not disturb the main real estate markets, as many buyers can complete their purchases of real estate in cash.
She adds: It seems that real estate prices in major cities such as New York and London will witness a revival next year, with the acceleration of sales on the map, and the transition of growth to the positive side for the first time in 3 to 6 years.
While luxury properties in Miami (Florida) have grown at the strongest rate in the world at 22% this year, and global real estate may lead in terms of price increases in 2022 with prices expected to rise by 10%, Allen says that the low tax system in Florida and competitive prices in the city Miami and the allure of coastal life during the Corona crisis boosted the demand for its real estate.
Expectations indicate that the performance of real estate prices in major cities around the world will be strong in 2022, and will grow in Sydney (Australia), which ranks second after Miami with 9% in 2022, followed by Los Angeles with 8%, then Auckland and London with 7% each, and Geneva Madrid, with 6% each, and Singapore, New York and Hong Kong, with 5% each.
However, what may help the real estate market now from any negative surprise is forcing “Omicron” to many global central banks to delay raising interest rates.
In addition, higher interest rates may slow the rise in real estate prices, and even if interest rates are raised, the demand for real estate still exceeds supply, so it is possible that some real estate markets will witness a gradual slowdown in their price growth rather than a sudden decrease, and this means The collapse of the global real estate market may be delayed by another year, according to Karen Noy, a mortgage expert at "Quilter" Global Wealth Management.
3: Tips For Buying a Dream Home
Buying a property is always considered a big risk, but international market experts advise that if a researcher finds a dream home, he should buy it and there is no need to search and roam between houses, and he should not buy a property to achieve a short-term profit only, but rather choose a property to make you happy for several years to allow time To recover prices from any possible collapse.
Also, the property buyer should not borrow more than his monthly payment, even if interest rates rise, and in case he is worried, he should modify his mortgage at low rates.
4: Unexpected Surprise
Zillow also expected real estate prices to rise in various parts of America by 13.6% until October 2022, although this figure represents a decrease from previous expectations in August, which amounted to about 20%.
And the British "SBF" for real estate loans answers positively whether a property should be purchased next year, provided that those who want to buy the property realize what they are doing and why? and that the borrower must prepare for higher interest rates in 2022 and bear the costs of the mortgage. Everything now depends on the trends of global mortgage rates. According to Fouad Zada, a market analyst at Think Markets, global central banks may be forced to abandon the illusion that price growth is temporary with the increase in inflation.
However, Zadeh points out that the US Central Bank remains reluctant to raise interest rates, and the markets expect the US Federal Reserve to raise interest rates twice in 2022. However, if the bank resorts to a tight phase, global real estate markets may be exposed to an unexpected surprise.
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