{"id":14119,"date":"2023-06-08T16:03:40","date_gmt":"2023-06-08T13:03:40","guid":{"rendered":"https:\/\/www.liberalglobe.com\/?p=14119"},"modified":"2023-06-08T16:03:51","modified_gmt":"2023-06-08T13:03:51","slug":"imf-which-countries-are-at-risk-of-a-real-estate-market-collapse","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=14119","title":{"rendered":"IMF: Which countries are at risk of a real estate market collapse?"},"content":{"rendered":"\n<p>Since the pandemic, an upward rally has boosted property prices in many countries, especially in developed economies. Low interest rates and the limited supply of real estate &#8211; also due to the suspension of construction work due to restrictive measures &#8211; created favorable conditions for this phenomenon.<\/p>\n\n\n\n<p>Then, as the International Monetary Fund notes, prices began to decline. Decline began late last year in many countries, while in others the pace of growth has slowed.<\/p>\n\n\n\n<p>&#8220;The deterioration was more pronounced in advanced economies with indications that property valuations had been &#8216;stretched&#8217; before and during the pandemic,&#8221; notes IMF economist Nina Biljanovska.<\/p>\n\n\n\n<p>With central banks raising interest rates to tame inflation, the average mortgage rate in advanced economies reached 6.8% at the end of 2022, more than double from early last year.<\/p>\n\n\n\n<p>As the IMF predicts, if borrowing costs continue to rise or remain elevated for longer, demand and property prices are likely to weaken further.<\/p>\n\n\n\n<p>The relevant IMF Chart shows that countries with high levels of household debt and a large percentage of borrowing carried out at floating interest rates are more exposed to higher mortgage installments, resulting in a greater risk of default. Canada, Australia, Luxembourg, Norway and Sweden are most at risk, data shows.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"738\" height=\"1024\" src=\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2023\/06\/image-40-738x1024.png\" alt=\"\" class=\"wp-image-14121\" srcset=\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2023\/06\/image-40-738x1024.png 738w, https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2023\/06\/image-40-216x300.png 216w, https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2023\/06\/image-40-768x1066.png 768w, https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2023\/06\/image-40-1107x1536.png 1107w, https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2023\/06\/image-40.png 1184w\" sizes=\"auto, (max-width: 738px) 100vw, 738px\" \/><\/figure>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<p>The IMF Chart uses five different criteria to assess the level of risk to property markets in the different countries it examines.<\/p>\n\n\n\n<p>1. Criterion 1 concerns household debt as a percentage of gross disposable income.<\/p>\n\n\n\n<p>2. Criterion 2 examines the share of debt issued at floating rate.<\/p>\n\n\n\n<p>3. Criterion 3 captures the percentage of households that have a mortgage.<\/p>\n\n\n\n<p>4. Criterion 4 concerns the cumulative real increase in real estate prices.<\/p>\n\n\n\n<p>5. Criterion 5 captures the overall change in interest rate policy.<\/p>\n\n\n\n<p>The best performances are recorded by Slovenia and Slovakia. Also, the risks in the real estate markets of Spain, Ireland, France, Belgium, Poland and Germany appear to be limited &#8211; for now.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Since the pandemic, an upward rally has boosted property prices in many countries, especially in developed economies. Low interest rates and the limited supply&#8230;<\/p>\n","protected":false},"author":1,"featured_media":14120,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[620,3003],"tags":[63,3032,3067,1103,4388],"class_list":["post-14119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-property","tag-imf","tag-property","tag-real-estate","tag-real-estate-market","tag-real-estate-prices"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/14119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14119"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/14119\/revisions"}],"predecessor-version":[{"id":14122,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/14119\/revisions\/14122"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/media\/14120"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}