Canada led the world in the most egregiously inflated home prices in the past few years, but New Zealand, Australia and Sweden were other top-risk contenders. Now high debt levels are having similar demand and price-depressing impacts in many countries all at once. See Sweden is facing its ‘day of reckoning’ as house prices plummet:
“We do expect [house prices] to drop a few more percentage points … So it could go from 20% to 25% perhaps, but if that happens that would mean that it’s pretty much the pandemic uptick that is being reversed,” Magnusson told CNBC.
Sweden isn’t the only European country experiencing a plunging property market post-pandemic, with some economists forecasting a similar downturn of between 20% and 25% in Germany.
As spending retracts under the weight of debt and evaporating home equity, commodity demand and global GDP are on the chopping block. The World Bank just lowered its 2023 global GDP growth forecast to 1.7% from 3%. Lumber (below since 1998), down more than 75% from the 2021 manic peak, sees the forest through the trees (sorry, I couldn’t help it 🙂 ) and is leading other commodities to follow.
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