Since the beginning of this century, property price in Canada has increased by more than hundred percent.
In some developed economies, residential and commercial property prices have significantly increased. According to Business Insider and the Organization for Economic Cooperation and Development (OECD the price of residential and commercial properties have spiral so high that it is likely that the real estate market could overheat, and suffer large corrections later.
“Canada is one of the countries, where average property prices have increased more than doubled since the beginning of 21st century, says Catherine Mann, Chief Economist at OECD. In Sweden, the increment of residential property price in the third quarter of 2016 was at 18 percent.
According to Mann, the property market in the UK is also bleak. However, she also says that a large price drop in the UK could be in the benefits of local home buyers. “In the UK, mainly in London, we can see some changes in the real-estate prices already,” she adds.
In an interview with The Telegraph “Catherine Mann says that for the UK economy “who bears the burden and who bears the adjustment cost” is an interesting implication. “For a non-resident in the UK, the drop in house prices could actually be good,” she says in the interview.
OECD, a representative of developed economies, reports that the home price in the countries like the UK, Canada and Sweden is significantly higher and it is not consistent compared with the stable real estate market.
OECD is not the first organization to warn against a potential downturn in the real estate market in London.
In the UK Capital, the average home prices dropped more than £30,000 (S$53,195)..According to a real estate agent Haart, the Brexit vote may have caused the drop.
In the Times survey in December, 22 out of 39 leading economists predicted that the residential price in London could become flat or drop in 2017.
Likewise, Charles Dumas the Chairman of Lombard Street Research, and the former member of the Bank of England’s monetary-policy committee DeAnne Julius also forecasted that the home prices could drop up to 10 percent.
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