| Property & Real Estate |    1258 VIEWS  |
| Property & Real Estate | |
| 1258 VIEWS | |
 |
Tuesday, February 18, 2020 /03:12
PM /By Mondovisione / Header Image Credit: Dekel13
Although residential and commercial real estate
prices are increasingly moving in sync and the role of international investors
is growing, this does not mean that there is a global real estate market, a
report by the Committee on the Global Financial System finds.
Property price dynamics: domestic and international
drivers documents recent trends in residential and commercial property prices
in over 20 countries, gives an overview of key drivers of price developments
and describes policy initiatives used to manage associated risks to the economy
and financial stability.
Property prices have been rising, reaching record
highs in many countries. As prices appear high in comparison to simple
rule-of-thumb valuation benchmarks, such as rents and incomes, some central
banks are concerned about the consequences of a potential correction. In many
cases, however, current price developments can be largely explained by
fundamental drivers such as interest rates and income, the report finds.
"A key takeaway is that even if prices (both
residential and commercial) have become more synchronised over the past decade,
this doesn't imply that we now have a global real estate market," said
Study Group Chair Paul Hilbers, Director of Financial Stability at the Netherlands
Bank.
"Significant differences in cross country
price dynamics reflect the strength of local drivers. Some drivers are more
important in some countries than in others."
A third highlight is evidence of the growing role
of international investors in many markets. Policymakers have found they need
alternative tools to deal with foreign buyers. These investors do not fund
their purchases through local banks, so fiscal tools like higher stamp studies
may be more effective than macroprudential policy.
The CGFS is a central bank forum for the monitoring
and analysis of broad financial system issues. It supports central banks in the
fulfilment of their responsibilities for monetary and financial stability by
contributing appropriate policy recommendations.
Related News
Signup with Facebook
Signup with Twitter
