Reuter Poll Suggests 2021 has the Potential of Being a Difficult Year for the Global Housing Markets

A recent Reuters poll conducted between September 15^th – 29^th, disclosed that most major housing markets around the world will not be able to keep up with consumer price inflation in 2021. As a result, they are faced with multiple downside risks, in spite of rising strongly this year amid the COVID-19 pandemic and historically low interest rates. While the September poll of 123 analysts showed average home prices would rise in a few countries this year on pent-up demand and a shortage in supply, that surge was expected to be tamed next year. Hansen Lu at Capital Economics in London said, “One of the long-run effects of the pandemic has been to trigger a structural increase in housing demand. The housing market recovery has exceeded all expectations and we have substantially upgraded our 2020 house price forecast in response. Looking ahead, a weak economy, tight credit conditions and the end of these short-term factors supporting demand will hold back growth in house prices next year. We expect house prices to stagnate in 2021.” In the U.S., the Federal Reserve’s latest policy shift along with the limited supply of affordable homes was expected to support U.S. house prices this year in an otherwise-gloomy economic backdrop, with predictions for 2021 less optimistic.