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By Jhoo Dong-chan
A local research center reported global housing prices are likely to dip this year due to U.S. rate hikes, strengthening regulations on housing markets and the global slowdown.
According to a study released by the Korea Center for International Finance (KCIF), Monday, advanced economies' housing prices have recovered since the third quarter of 2012.
The recovery pace peaked in the second quarter of 2017 as prices were up 1.73 percent year-on-year, but have since entered a slowdown. Prices were up 0.87 percent year-on-year in the third quarter of last year.
The study claimed the pace could slow further or even turn to a downturn due to the global slowdown and advanced economies' austerity measures. Weakening Chinese demand is another reason behind the slowdown.
"The Fed already raised its rate four times last year, and is likely to continue the uptrend this year. Other central banks do not have many options except to follow the trend," the KCIF said.
"The European Centrl Bank has also ended its quantitative easing. Such stances could discourage demand in the global housing market. Also, a number of countries started strengthening regulations on housing prices last year."
It added the global slowdown could also affect global housing demand.
"China posted a 6.6 percent growth rate last year. Its government is likely to introduce measures to prevent capital outflow. Weakening Chinese money will discourage global housing prices," it said.
"The ongoing trade dispute between the U.S. and China won't be completely settled anytime soon. Follow-on protectionism is another factor that could negatively influence prices."
The downtrend is evident in the nation's housing market.
According to a report released by KB Financial Group's research institute, 70.5 percent of 112 real estate experts surveyed by the group said property prices nationwide would decline this year.
As many as 31.3 percent predicted a price drop of between 1 percent and 3 percent, while 17 percent projected a sharper fall of 3 percent to 5 percent.
"The government said it will continue strengthening regulations on apartment prices while checking mortgage loans," said a Gyeonggi Province real estate agent surnamed Ahn.
"It could be temporary, but the downtrend will prolong for a while in the metropolitan area."
