Archinect - News

Housing markets around the world are increasingly synchronized

2020-01-29T14:06:00-05:00

Even though homes aren’t tradable, like soybeans or car parts, home prices across the world have become increasingly synchronized. This reflects a variety of factors, according to the [International Monetary Fund], including the increasing tendency for economic growth and interest rates to move in parallel across nations.

An interesting report from Sarah Chaney of The Wall Street Journal illuminates some of the ways in which housing markets across the globe—which are currently showing signs of a slowdown—are increasingly falling into line with one another as the power of the global economy continues apace following the Great Recession.

One reason, according to the report, is that following 2008, many major economies took to reducing interest rates as a way of spurring new investment. Chaney writes, "In the period of low interest rates following the global financial crisis, wealthy investors in the hunt for better yields swooped in to buy properties in major financial hubs. In effect, residential prices in those cities have become globally synchronized much as stocks and bonds are."

Foreign investment in U.S. residential real estate drops 36%

2019-07-17T15:44:00-04:00

Challenging conditions in the U.S. housing market, along with tighter currency controls by the Chinese government, caused a stunning drop in foreign demand for American homes. The dollar volume of homes purchased by foreign buyers from April 2018 through March 2019 dropped 36% from the previous year, according to the National Association of Realtors.

NAR’s Profile of International Transactions in U.S. Residential Real Estate 2019 survey reports that "for the seventh consecutive year, China exceeded all other countries in terms of dollar volume of purchases, buying an estimated $13.4 billion worth of residential property, a 56% decline from the previous 12 months. The Chinese economy is growing at a slower pace compared to past years, slowing to 6.3% in 2019 compared to 6.9% in 2017. The Chinese government has also tightened the monitoring of dollar outflows since 2016 to manage its foreign exchange reserves."

The top 5 destinations of foreign home purchases were Florida (20%), California (12%), Texas (10%), Arizona (5%), and New Jersey (4%).

China leads world in investing in Africa, especially in Egyptian building projects

2017-05-30T13:25:00-04:00

How will China's $36.1 billion dollar investment shape the future of Africa? While China only has 66 projects over the continent compared to the United States' 91 projects, it has pledged about ten times the total amount of money, and the lion's share of that cash is earmarked for Egypt. As Global Construction Review notes:

The largest recipient of Chinese money is Egypt, which accounts for 25% of its African FDI. Here, China’s involvement is overwhelmingly in the construction and infrastructure sector, and it has plans to spend $15b on 15 electricity, infrastructure and transport projects. This would have been higher still if it had not in February pulled out of a $20bn plan to build a new capital city.

Is Vancouver's 15% tax on overseas buyers helping to cool the housing market?

2016-10-12T14:22:00-04:00

There is a city which is suffering a worse property bubble than Sydney, whose residents are more priced-out than Londoners, and where there is a greater divide between the housing haves and have-nots than even San Francisco. That city is Vancouver, and in response to these mounting challenges, the west-coast Canadian metropolis recently imposed an extraordinary new tax on foreign buyers – whose impact is now being watched closely by other cities grappling with bloated property markets.