Economics: We’re not in CANNSas anymore
Economic conditions look increasingly difficult for housing
There’s a rising risk of housing-led recessions across the global economy. The combination of high inflation, rising interest rates, and tightening lending conditions could be seen as close to a perfect storm for housing markets.
Building a scorecard to gauge the overall level of risk in housing
We’ve constructed a scorecard that attempts to summarise the risk of a housing downturn. It focuses on the drivers of housing demand and the direct, indirect, and credit channels through which housing activity spills over into the broader economy.
Overall risk is rising, but credit risks related to housing appear low
The overall level of housing risk is rising, and it’s unsurprising to see the CANNS economies top our leaderboard. But credit risks deriving from housing generally remain low. This matters because it reduces the chance of deeper and protracted recessions.