Does it return to being overheated real estate market?

Nordea experts believe that the fear of a new price bubble in the housing markets of Germany, China and the United States is unfounded. But you have to monitor …

The recovery in housing prices in many markets , not just the U.S. , has rekindled the interest of investors in this asset class in recent months , so much so that some voices are beginning to warn of overheating price . However, the initial conclusion of Jan von Gerich , expert Nordea Investment Funds , is that ” in general one should not be concerned at least until large bubbles forming prices look again.”

But it is impossible not to worry. The analyst notes that the Bundesbank has recently warned that housing prices in major cities in Germany could be overvalued by up to 20 %. However, the bank said it still does not pose a significant risk to the macroeconomic performance of the economy , concluding that the entire German market is developing in line with revenues .

The situation is different in China. According to the data provided from Nordea , housing prices have risen in 69 of 70 major cities. The biggest annual rally has been in Shenzhen and Guangzhou , 20% . ” The high growth numbers will put more pressure on the government to impose new measures to cool the market , which in turn could reach new fears that China will slow ,” says Von Gerich .

United States, where the recovery of this sector is key to the recovery of consumption through the ” wealth effect ” , published data for the September show a drop in home sales in line with the market consensus , while prices have increased by 11.7 % annual rate . ” Higher prices and rising mortgage rates have pushed the standard of living, by measuring the ability of an average family to apply for a mortgage , sharply lower average home, while the index remains at historically high levels,” explains the expert, but otherwise qualifies the falling purchasing power should limit the rise in prices .

In this context, the expert considers key to predicting the evolution of the U.S. housing market in the short term results of the latest data on job creation in the country, which were lower than expected by the market ( 148,000 jobs versus 180,000 expected ) . ” After all , if the data show that the labor market was already losing momentum in September , even before the government shutdown and the debacle of the debt ceiling , likely expectations for the October figure lower yourself even more.”


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