The real estate industry is nearing a bubble, after a global land boom. After a significant increase in housing market prices and demand worldwide, experts believe in a high possibility of price decline in the years to come.
According to recent studies, at least five global cities are facing this decline. For people who haven’t owned any properties in these areas yet thinking about getting one, the bubble burst is something to watch out for by all means.
Here are five cities where a significant bubble burst can come sooner than later.
Price listings for homes in Vancouver have increased over time, influenced by an uplifted buyer demand in the area. In almost two years, the value of houses has already increased by a quarter. Thanks to foreign buyers who would like to try their Canadian luck.
The government has imposed a higher property transfer tax this year to reduce the possible effects of any housing bubble.
In almost a decade, real estate properties in London have risen by at least 15% even when salaries are reported to be lower nowadays.
The Swedish capital has been very expensive lately when it comes to real estate, that even bigger corporations are starting to protest. Their central bank has helped lower mortgages by a significant rate in the recent years, due to affordability issues.
This Aussie city has attracted many foreign buyers and investors in just a few years, especially Asians. While Australians currently categorize their housing markets as extremely unaffordable, experts believe that the real property prices are nearing a balloon.
Hong Kong, China
Low-interest rates play a critical role in causing an economic and housing bubble in places where prices have gone greatly unsustainable, including Hong Kong. While housing costs have gone up, incomes are not improving which creates an affordability issue for most people.
While these areas are still enjoying their land boom, we may have to wait longer before a bubble burst. Then again, we may not have to wait that long.