While the pandemic is over, the effects continue to last. The worldwide health crisis undoubtedly changed the lives of billions, causing several global disasters — including economic turmoil and an unprecedented catastrophe in the housing market. Prices surged worldwide during the pandemic, causing a shortage of affordable housing. That impact is still being felt today.
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However, there’s a bit of good news. Global housing prices are finally dropping. According to the Bank for International Settlements (BIS), “In the fourth quarter of 2023, global house prices deflated by consumer prices declined by 1.2% year-over-year, compared with 2.0% in the third quarter.”
BIS also stated: “Real house prices declined more in emerging market economies (-1.6% year-over-year) than in advanced economies (-0.8% year-over-year), for the first time since late 2022.”
Here’s where prices are decreasing internationally, and why costs are plummeting.
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Germany
The German real estate market has experienced a recent record drop (the most significant drop in 60 years) due to high financing costs — and waning political support — that’s deterred homebuyers, according to Bloomberg. The outlet reported, “Multi-family buildings led the downturn with a 20% drop, while apartments fell 9% and single-family homes declined 11%.”
Affordability isn’t the only reason for the falling costs — energy efficiency is also playing a role.
“As the majority of the German housing stock was built before 1979, renovation activity has been limited in recent years, and as older buildings generally have a poorer energy label than new buildings, it does not come as a surprise that prices for existing properties have fail faster than those for new buildings,” ING reported.
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Hong Kong
Hong Kong was one of the most expensive places in the world to own a home, but the wild days of its housing market might be over. Prices have decreased 10%, per BIS.
“Various environmental factors, such as the 2019 protests against the National Security Law and the aftermath of the COVID-19 pandemic, have contributed to this shift,” according to Global Research and Consulting Group Insights.
Luxembourg
Located in northwestern Europe, Luxembourg is bordered by Belgium, France and Germany — and is one of the world’s smallest countries. Property prices have significantly dropped, falling to their lowest point since the end of 2020, according to the Luxembourg Times.
“The price of housing continued its downward trend for the fifth consecutive quarter, with the average price for a house or a flat contracting by 14.4% in the last quarter of 2023 year-on-year,” the outlet indicated. However, the Luxembourg Times also noted that the sharp decline may be due to high interest rates and a shortage of sales.
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This article originally appeared on GOBankingRates.com: 3 International Locations Where Housing Prices Are Plummeting Post-Pandemic
