“First Wisps” of Deflation in Global Real Estate

Originally published by CNBC on August 1, 2018 Read the original article.

Signs of weakness are showing up in the global real estate market.

The July Elliott Wave Financial Forecast noted:

The vitality of real estate as the center of the financial world continues to fade. With Deutsche Bank’s recent decision to relocate from 60 Wall Street, the very lot that once contained the famous NYSE buttonwood tree, there will be no major bank with a U.S. headquarters situated on Wall Street. The cranes may continue to circle overhead, but a June 11 Bloomberg article states, “Wall Street Is Awash in Sublease Space.” A spokesman for the owner of the World Trade Center says, “Everyone is going to succeed as long as New York City is growing. This is not a war.” Of course, it’s not. Construction zones are the antithesis of war zones. But they are most prominent when the trend that created them is ending.

London is another flagging flagship. The emergence of bear market forces is exemplified in the city’s Dulwich neighborhood, where housing prices rose by 12 times between January 1995 and September of last year. According to London real estate consultant Frank Night, that was the fastest price growth across England and Wales over that two-decade span. In February, the latest month for which prices are available, Dulwich prices fell 1.6% year-over-year. In Australia, the decline from an August 2017 peak in Sydney home prices accelerated into a decline of 4.2% year-over-year in May. It was the fifth-straight decline, the longest stretch since September 2008. While Aussie home price declines “are most pronounced in Sydney,” they are now spreading. In May, overall Australian home prices fell 0.4% year-over-year, as measured by the CoreLogic Hedonic Home Value Index. It was the first annual year-over-year decline since October 2012. On a month-to-month basis, Australian home prices have been falling since September. These are just the first wisps of a deflation that will eventually consume the global economy.

Regarding the U.S., here’s what CNBC reported on Aug. 1:

Housing demand sees biggest drop in more than 2 years

  • Housing demand fell 9.6 percent in June, compared with June 2017, according to a monthly index from Redfin. That is the largest decline since April 2016.
  • The number of people requesting home tours fell 6.1 percent annually in June.

You can read the entire CNBC article by following this link:

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