A new report reveals that many countries are likely to see property price declines over the next 12 months.
The Fitch Ratings 2019 Global Housing and Mortgage Outlook says that a growing number of countries will face challenges to home price growth in 2019. These challenges include high household debt levels, political risk, slowing economic growth and stretched borrower affordability.
Australia and Sweden are expected to see the biggest price falls this year. The report forecasts that Australian house prices will decline 5 per cent this year, on top of a 6.7 per cent decline from peak levels already. Sweden is likely to see a similar downturn in household prices this year.”
“Fitch Ratings forecasts that home prices will fall in 2019 in Australia and Sweden before stabilising in 2020. Modest corrections will occur in China and South Korea, and growth will stall in Canada and slow in several other countries,” said Suzanne Albers, Senior Director of Structured Finance at Fitch.
The UK property market could also be facing a tough year as uncertainty surrounding Brexit continues – especially after following last night’s overwhelming rejection of the deal drawn up by Theresa May. It’s a situation which could impact on other countries too, most notably Ireland.
“Political risks such as Brexit mean that uncertainty around home price growth is rising,” explained Albers. “Should a no-deal Brexit materialise, this would likely hit UK home prices and lead to much slower growth in Ireland.”
Fitch does not forecast material increases in arrears in 2019 and 2020 for any of the 24 countries covered in the report.
Article published 16th January 2019