The four cities around the world where home prices have been dropping

  • A report by UBS analyzed the 25 major urban housing markets around the world and found annual housing price growth for 21 of them from the second quarter of 2019 to the second quarter of 2020.
  • The 4 urban markets that saw housing prices decline span from China to the United States.
  • San Francisco, Hong Kong, Madrid, and Dubai each saw prices fall on an inflation-adjusted basis over the four quarters.
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On a global scale, the housing market has shown strength during the coronavirus pandemic, despite the economic downturn. 

A recent report by UBS identified three factors for its resilience.

First, as home prices are a backward-looking indicator of the economy, UBS said they therefore react with a delay to economic downturns. The number of transactions declined in most cities in the second quarter of 2020 compared with the previous year, “complicating price formation and reducing the validity of observed prices.”

Second, the majority of potential home buyers didn’t suffer direct income losses in the first half of 2020, UBS found. “Credit facilities for companies and short-time work schemes mitigated the fallout from the crisis, supporting employees’ housing affordability.”

And third, governments helped homeowners in many cities during the lockdown periods, with increased housing subsidies, lowered taxes, and suspension of foreclosure procedures.

The report analyzed annual house price growth rates in 25 major cities from 2001 through the second quarter of 2020. The markets in the study were Munich, Hong Kong, Zurich, Paris, Singapore, London, Geneva, Frankfurt, Stockholm, Vancouver, Milan, Toronto, Tel Aviv, Sydney, New York, Moscow, Amsterdam, Madrid, Tokyo, San Francisco, Los Angeles, Boston, Warsaw, Dubai, and Chicago.

From mid-2019 to mid-2020, UBS found that 21 of these cities saw inflation-adjusted annual price growth, while only four saw inflation-adjusted annual price declines: Hong Kong, San Francisco, Madrid, and Dubai.

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