Global Housing Market Pain Has Echoes of a Crash 30 Years Ago
Interest-rate hikes, stretched affordability are taking a heavy toll
Australia saw a big run up in the home prices during the pandemic.
Photographer: Brendon Thorne/BloombergWhen Covid sent the UK economy into lockdown in 2020, the government jumped in to help the property market by cutting a tax on purchases. The temporary measure triggered a kind of mania among buyers, who responded by bidding up average prices by £31,000 ($35,000) — more than double the maximum tax saving.
The frenzy echoed the buildup to the house price crash that started at the end of the 1980s, when the government announced it would cut a tax relief for couples buying property, leading to a surge in demand. The slump that followed was brutal, with the market taking almost nine years to return to its previous high.