The Global Housing Price Boom

Is the current high level of house prices sustainable? Central banks, worried about surging inflation, are tightening monetary policy, including by raising interest rates. In its latest financial-stability report the IMF warned that “downside risks to house prices appear to be significant”. This could reduce prices substantially.  However, in a recent article, the Economist magazine argues that there are three reasons why prices could remain at their current level, or even continue to increase. Here is the vocabulary we will look at in this podcast.  Surging inflation: Inflation that is increasing suddenly, and powerfully. Downside risk: A risk that something will get worse. Sustainable: Able to be maintained at a certain rate or level. Stable jobs: A job position that employees can keep for long periods of time. Foreclose: take possession of a mortgaged property as a result of a lack of payment. The property is then usually resold. Shifting preference: A change in preference. A change in what people want. Supply constraint: A constraint holds something back, in this case, a supply constraint is a limit on the amount of supplies, like building materials for example.