House prices in the U.S. and Europe climb to record levels
As large-scale fiscal and monetary stimulus measures help the residential real estate market continue to escape the impact of the coronavirus pandemic, housing prices in the United States and parts of Europe have set new records.
The National Association of Realtors said on Tuesday that the median price of existing homes in the United States rose by 23.6% year-on-year last month to a new high of $350,300, with increases in every region of the country.
Despite the Covid-19 crisis, the European real estate market has also been climbing. Statistics Netherlands stated that in the Netherlands, the price of existing homes in May rose 12.9% from the same period last year, the fastest growth rate since 2001.
Although prices continue to rise, the number of residential property sales in the United States and the Netherlands has declined, indicating that demand is in short supply. The Dutch Land Registry stated that 16,126 residential property transactions were recorded in May, a year-on-year decrease of 12.1%.
Between April and May, second-hand housing sales in the United States fell by 0.9%, with a seasonally adjusted annual rate of 5.8 million units. NAR stated that the total inventory of 1.2 million units in the United States was 20.6% lower than in May 2020, but increased by 7% from April.
Some economists said that the decline in sales may indicate that the US real estate market has peaked, with activity last year reaching its highest level since 2006.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “Declining sales and increasing inventories mean that extreme upward pressure on prices should begin to fade soon.”
Others believe that, driven by central bank policies, housing prices will rise further. Adam Slater, an economist at the Oxford Economics Institute, said: “Easy monetary conditions may push up asset prices, and there may be a sharp correction in the end.” Attractive prospects.”
The soaring house prices have caught the attention of Fed officials, especially considering its $40 billion per month buy Institutional mortgage-backed securities as part of its $120 billion bond purchase plan.
Dallas Fed President Robert Kaplan recently warned that prices are at “historic high” levels and emphasized that financial investors have purchased a large number of residential properties.On Tuesday, the private equity group Blackstone Group agree Acquired Home Partners of America for $6 billion, a buyer and operator of single-family rental properties with more than 17,000 homes.
“More and more single-family buyers are being squeezed out of the market,” Kaplan said at an event hosted by the Think Tank Official Currency and Financial Institutions Forum on Monday. “At this stage, we question whether the real estate market really needs the Fed to provide $40 billion a month in support.”
In the same incident, St. Louis Federal Reserve Bank President James Brad said that now may be the time to consider whether to “exit” the institution’s MBS purchases.
The European Central Bank said A report This week, in the fourth quarter of last year, Eurozone house prices rose by 5.8% year-on-year-the highest growth rate since mid-2007.
According to the report, Germany, France and the Netherlands accounted for nearly three-quarters of the euro zone’s total housing price increase last year.
Rising prices and a shortage of affordable housing have sparked public outrage against large commercial landlords in several European countries.Ireland impose A 10% stamp duty is imposed on anyone who purchases 10 or more houses within 12 months to prevent financial investors from buying large numbers of properties.
In Germany, the plan 18 billion euro merger The dispute between Vonovia, the country’s largest residential landlord, and its rival Deutsche Wohnen has triggered calls for rent restrictions and even nationalization of these companies.
The housing price issue has also become a lightning rod to criticize the European Central Bank’s ultra-loose monetary policy. Its president Christina Lagarde accepted inquiries about the matter in the European Parliament this week.
“Young and middle-class families are forced to participate in fierce competition and pay exorbitant prices in the overheated real estate market,” said Michiel Hoogeveen, a member of the Dutch European Parliament who doubts Europe. “This is one of the consequences of your generous funding and low-interest policy in order to keep the weaker eurozone countries alive.”
In response, Lagarde stated that “there is no obvious sign that [a] Credit has promoted the real estate bubble throughout the Eurozone,” but she added that some countries, especially some cities, have “residence real estate vulnerabilities.”