Hany Salaam | A global property bidding war!

 

From the United States, Europe, the United Kingdom and Asia, the housing market is riding an extended boom. Global valuations are soaring at the fastest pace since 2006, according to entrepreneur and businessman Hany Salaam, with annual price increases in double digits. 

 

In the housing market, shocking stories are getting more and more common, with desperate buyers going out of their way to accommodate sellers who are selling almost crumbling buildings for mansion prices. “The drivers for the frenzy are remarkably consistent: cheap mortgages, a post-pandemic desire for more space, newly remote workers taking city cash to regional locations — and, crucially, a pervasive fear that if you don’t buy now you may never be able to”, said Hany Salaam.

As prices mount, so do the risks for both individuals and society. According to Hany Salaam, even without an outright crash, big mortgages mean borrowers are vulnerable if interest rates rise. They will have less disposable income to spend in the wider economy and are more likely to retire in debt. “For younger people, buying property becomes increasingly difficult, further widening intergenerational inequality”, he added.

While regulators are starting to get nervous, there are few signs of meaningful action in most countries. “In my opinion, the market will start to cool on its own”, argued Hany Salaam. He believes that a decade-long focus on higher lending standards combined with the prospect of low interest rates for an extended period means there is no obvious trigger for a crash. Much of the activity is also being driven by owner-occupiers rather than investors, who typically don’t all head for the door at once if prices start to drop.

In Hany Salaam´s expert opinion, U.S. home prices jumped the most in 30 years in April, with even more dramatic increases in many suburban and rural areas. ¨At the peak of the pandemic, Greenwich attracted former New Yorkers who wanted to escape the city — and they’ve kept coming ever since¨, he added. 

Signed contracts for single-family homes more than tripled in May from a year earlier to 165, according to Hany Salaam. “In Manhattan, sales have picked up in recent months too, but that’s largely thanks to the prospect of discounted prices. By contrast, buyers pushing deep into the outer boroughs in search of more spacious homes are facing bidding wars”, he concluded.