The global rebound in house prices narrows as commercial property prices have slumped
The global rebound in house prices has become more narrowly based, while US and European commercial property prices have slumped.
The global rebound in house prices has become more narrowly based over recent months.
US and Australian house prices are at new record highs, albeit on slower monthly growth.
Canada’s recovery has started to unwind, with prices down about 1% over the past few months, while New Zealand’s rebound has flattened out on updated seasonal adjustment.
UK and Nordic prices have been relatively flat, while German prices continue to decline (less timely euro area prices have stabilised after an earlier decline).
The strength in US and Australian prices raises questions about the tightness of monetary policy, where it seems likely that the neutral policy rate is higher than pre-COVID levels (in contrast, the euro area neutral rate appears broadly similar to pre-pandemic levels).
Commercial property prices have taken a different path, trending sharply lower in the US and Europe.
This is due to the combination of higher interest rates and banks significantly tightening lending standards on commercial real estate loans.
In the US, the divergence between record-high house prices and lower commercial property prices is stark, with the Green Street Advisors commercial property price index down about 22% from its 2022 peak.
It is a similar story in Europe, with European house prices down 3% from their peak, whereas the Green Street Advisors commercial property price index is 24% below its 2022 peak.
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Based in Sydney, Kieran Davies is Chief Macro Strategist at Coolabah Capital Investments, an asset manager with 40 executives and over $8 billion in fixed-income strategies. Kieran is responsible for macroeconomic research and investment strategy, contributing to the investment decisions of the firm. Kieran has long experience as a macroeconomist in both the private and public sectors. He has worked most recently as Chief Markets Economist for National Australia Bank and was previously Chief Economist, Australia and New Zealand, for Barclays Bank and ABN Amro Bank/RBS. Kieran also worked as Principal Adviser on the macroeconomy and budget policy in the Commonwealth Treasury and Director of Forecasting.
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Based in Sydney, Kieran Davies is Chief Macro Strategist at Coolabah Capital Investments, an asset manager with 40 executives and over $8 billion in fixed-income strategies. Kieran is responsible for macroeconomic research and investment strategy,...
Based in Sydney, Kieran Davies is Chief Macro Strategist at Coolabah Capital Investments, an asset manager with 40 executives and over $8 billion in fixed-income strategies. Kieran is responsible for macroeconomic research and investment strategy,...
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