The figures foreshadowing a crisis in the real estate market of developed countries are constantly growing, while house sales be reduced to USA For the tenth month in a row, house prices in London have been declining. The main reason is the increase in interest rates, which inevitably increases mortgage payments, causing their interest rates to skyrocket.

According to her American National Association of Realtors (NAR), sales of houses, small apartments and semi-detached houses in November decreased by 35.4% compared to the corresponding period last year, as well as by 7.7% compared to October. The same pattern prevailed in all US states, where sales were declining both year-on-year and month-on-month. As noted in a related CNN report, the trend that began in February continues and marks the longest decline in property sales recorded since 1999, when the data began to be recorded. In addition, in November, real estate sales in the superpower were at the lowest level recorded since May 2020, when the real estate market was literally paralyzed due to the pandemic and quarantine. With the exception of that terrible month, home sales in November were the lowest in US history since November 2010.

Sales of houses, small apartments and townhouses in November decreased both on an annual basis and on a monthly basis.

Speaking to the American Network, Lawrence Yun, NAR’s lead economist, stressed that “the determining factor is the rapid rise in mortgage interest rates, which is making the housing market unaffordable.” With the rising cost of US loans, not only is home ownership out of reach for a large portion of the population, but many Americans are no longer eligible for mortgages. Surprisingly, despite falling sales, home prices continue to rise: the average price in November reached $370,000, up 3.5% from the same period last year.

in Londonon the contrary, house prices tend to decrease. Recent studies even record real prices falling by up to 24% over the past five years, while in the expensive areas of the British capital, prices remain unaffordable even after a slight drop of 2%. The Relative Price Index for December shows that property prices in London have fallen by 7% since 2017, and according to real estate market participants and analysis of relevant websites, the downward trend will continue into the next year. According to him, prices in the British capital will fall by 5-8%, while the country as a whole is projected to fall by 5%. And in the case of Britain, however, the decisive factor is none other than the rise in the cost of borrowing, which makes the cost of servicing a home loan unaffordable. According to a related report from the Financial Times, the UK property market will bear a direct burden from the tech giants who are leaving their offices in London and Dublin due to the rapid economic slowdown. Alphabet, the parent company of Google, as well as Meta, the parent company of Facebook, as well as software company Salesforce and other US companies, are vacating offices they have rented in the UK and Ireland capitals. As the British newspaper notes, their choice further exacerbates the situation of large real estate companies, which are facing the biggest challenge to their sector since the 2008 global financial crisis. Office prices are falling on both sides of the Atlantic, on the one hand because of rising interest rates and growing uncertainty about the state of the economy, and on the other hand, because the teleworking system is constantly expanding, making jobs unnecessary.

The British newspaper also notes that remote work has turned some high-tech companies into random intermediaries who are now trying to rent out rented but unnecessary offices. Google, for example, is in this position as one in ten employees opt to work remotely full-time and the company is moving out of its leased offices in London. As for Meta, it has rented building premises with an area of ​​29,000 sq.m. in central London and is now trying to rent a building in which he did not have time to settle.