For the first time in over a decade, residential real estate across the developed world appears vulnerable to falling prices. That’s what happens when central banks flip into interest rate hiking mode after an unprecedented run-up in home prices.
But unlike the last time around—the 2008 housing bust—the U.S. won’t be at the epicenter of this housing pullback. At least that’s according to Goldman Sachs.
This month, researchers at Goldman Sachs released “The housing downturn: A bigger deal down under and up north.” Through the end of 2023, the paper predicts a crash-like drop in home prices in New Zealand (–21%), Australia (–18%), and Canada (–13%). For comparison, the U.S. housing bubble saw home prices drop 27% between the 2006 peak and the 2012 bottom.