What I Learned This Week

Is it time to worry that the boom in global megacity housing prices could turn into a bust with a potential contagion across the global economy?

A pattern of weakness is becoming apparent in megacity housing markets around the world. By the end of May, home prices in Sidney had fallen 4.7% year-over-year. In Toronto, the average price of a single family home had fallen 13% since the market’s peak in April of last year. Meanwhile, in February, London saw its first annual decrease in prices in more than eight years, which accelerated in March and April. And in the first quarter of this year, Manhattan saw the median price-per-square foot fall 18% year-over-year. No doubt, these declines can be attributed to region-specific supply and policy factors, whether newly-implemented government restrictions on foreign investment or Brexit and…

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