How and Where to Take Advantage of the Global Turndown

All around the world, housing markets are suffering from significant economic issues – the U.S.-China trade war, the uncertainty of Brexit in Europe, rising interest rates, and in some spots, a mixture of all three. Because of this, high-end homes have lowered prices by as much as 30% to entice interested homebuyers. Here are the top four spots where Bloomberg believes the best deals will be popping up.

 

LONDON

The Stats: According to broker Savills Plc, the value of homes in the most sought after neighborhoods are 19% below their 2014 peak.

 

What’s Going On: The bougie Chelsea, Kensington, and Westminster neighborhoods have been suffering the aftershock of tax changes on luxury properties. Along with the neverending Brexit deal and anti-money laundering abolition from Russia and China, the demand for big-ticket homes is at a standstill. Case in point: Hedge fund billionaire Ken Griffin notoriously spent $122 million on a mansion close to the royal Buckingham Palace in January, an almost 35% cut from the original price.

 

SYDNEY

The Stats: Sydney home prices have fallen 12% making it the worst housing market in four decades. Economists predict that they could see an additional 8% drop in 2019 alone.

What’s Going On: When credit became easy to obtain thus raising the cost of housing through the roof, regulations were put in place for banks and foreign buyers to cool the market. Unfortunately, higher sales taxes and interest-only loans have only deterred investors. Because interest rates are hitting record lows, these bargain housing prices won’t be stopping anytime soon!

 

DUBAI

The Stats: Dubai’s domestic costs are down 25% since their 2014 peak, according to broker Jones Lang LaSalle Inc.

What’s Going On: Greedy developers in Dubai are being held responsible for this slump. Dubai is planning to build a record 31,500 homes this year, double the seasonal demand of the past five years. According to Jones Lang LaSalle Inc., this increases the risk that housing prices could fall further.

 

HONG KONG

The Stats: Home prices have dropped 10% since August, according to Centaline Property Agency Ltd. Several other financial projections anticipate another 10% plunge in 2019.

What’s Going On: Because the Hong Kong currency is tied to the U.S. dollar, borrowing costs have shot up as the American Federal Reserve has increased rates. There is also an impending vacancy tax designed to prevent developers from hoarding empty apartments in hopes to sell them for a more significant profit down the road. It seems that this tax is scaring them, as condos are flooding the market in Hong Kong for a fraction of their forecasted cost.

 

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