Long run on surging house prices to come in the US and other DMs — macro-prudential brakes possible?
- housing activity response to easier policies has so far been most pronounced in the U.S.;
- generally takes years, not quarters for housing expansions to buckle under their own weight;
- in countries with an elastic property supply, the emergence of an eventual supply glut plays a key role, and in many other jurisdictions, prices play the main role;
- they eventually move high enough to make a home purchase far less affordable, causing a rotation back to renting;
For in-depth analysis, see attached paper by Phil Suttle.
