In the ever-shifting landscape of global economies, 2024 looms ahead with its unique challenges and prospects. Amidst geopolitical uncertainties, endemic global issues, and the relentless march of protectionism, the world’s economy must find its footing. While some nations have high hopes for a drop in housing prices, the reality may be less optimistic. Influenced by multifaceted factors, 2024 is shaping up to see housing prices in many countries rise rather than fall.
Rising Housing Prices Across Nations
Recent data paints a vivid picture of surging property prices across the globe, from the United States, Australia, India, New Zealand, Canada, to the United Kingdom. In May alone, Australia’s housing market saw a significant increase, marking the 16th consecutive month of rising prices since October last year. Compared to the same period last year, house prices have soared by 8.3%. Meanwhile, Sydney’s real estate prices have re-attained historical highs from January 2022.
In the United States, the housing market continued its upward trend for the 13th consecutive month in March, setting new records since October 2022. Following a dip from June 2023 to January 2024, Canada’s housing market rebounded in February, with the national average price climbing to $735,900 CAD in April—a 4% increase from earlier in the year. In Calgary, year-on-year house prices surged by 9.9% in April.
Across these regions, the pressure on local residents to afford homes continues to escalate. For instance, in the United States, a survey revealed that 60% of renters believe they will never be able to own a home—a record high disparity since the survey began a decade ago with the New York Federal Reserve.
Soaring Prices and Inequality
The widening gap between those who own homes and those who don’t could exacerbate socio-economic disparities, making home ownership an increasingly elusive dream for the average middle-class American. In Canada, potential homebuyers have reported negative emotions due to skyrocketing prices, with 46% feeling pressured, 41% experiencing anxiety, and 34% feeling depressed while trying to navigate the housing market.
The persistent shortage of housing supply is a key driver of rising prices in many countries. In the U.S., homeowner reluctance to sell due to high mortgage rates has led to a sharp decline in housing inventory, pushing prices higher. As of April 24, the average 30-year fixed mortgage rate stood at 7.05%, with peaks reaching 7.9% in October 2023.
The Future of Housing Prices
Looking ahead, the supply shortage may continue to drive housing prices up in numerous countries, potentially beyond expectations. In Australia, the next two years could see house prices outpace overall inflation rates, positioning it as one of the highest-priced housing markets worldwide.
With major Western economies like the U.S., the U.K., and Canada entering a cycle of interest rate cuts, lowered interest rates can promote economic recovery, increase housing demand, and further elevate prices. Meanwhile, inflation rates remain a complex issue intertwined with housing, education, and supply dynamics.
In conclusion, the outlook for 2024 suggests continued upward pressure on housing prices across many nations, driven by supply constraints, economic policies, and enduring inflation challenges. As we move forward, nations will need to address these systemic issues to balance housing markets and ensure affordable living conditions for their citizens.
