No reduction in interest rates can reduce the peak of the global property market

The extremely uncertain atmosphere caused by the Sino-US trade war continues to plague investor confidence, and global property prices have continued to fall from high levels in the near future

However, as countries begin to enter the interest rate cut cycle, property prices have once again rebounded. Investors are expecting continued interest rate cuts to push up property prices again, bringing property prices to record highs. But in fact, their expectations may not be met. The reason is that different times in the past, during the financial tsunami 10 years ago, countries were just beginning to print silver paper and lowered interest rates to historically low levels, but after nearly 10 years. After the volume is wide, the bullets are almost exhausted, and the interest rate is almost reduced. How can the property market then rely on the factors to peak again?

The prices of the UK, Australia, Canada, Singapore and other places have risen since the financial tsunami, benefiting from the global central bank’s printing of silver paper

The uptrend did not reverse until last year, but as the Sino-US trade war escalates, the global economic outlook is getting higher. Unclear, Australia and other countries have taken the lead in cutting interest rates, so that the property market that has already fallen back has been revived.

Some investors therefore expect that property prices will once again be pushed up and even hit record highs after the global central bank cut interest rates again

But this wishful thinking is not necessarily loud. First of all, the global property market has soared last time. It really benefited from the global central bank’s easing policy, which caused hot money to flow and eventually pushed up asset prices. However, after more than 10 years of interest rate cuts, the interest rate of many countries in the world has fallen to a very low level. In Australia, for example, the interest rate has been reduced from 4.7% in 2011 to only 1% in the future. The space reduction is very limited. The interest rates in the UK and the Eurozone have fallen to zero or near zero. The deposit rate in the Eurozone has even fallen to a negative number. I believe that in the future, we will continue to cut interest rates and will be powerless. As for the United States, although interest rate hikes have started since 2015, the current interest rate is not too fast. Therefore, the current interest rate is only about 2.5%. If we want to cut interest rates again, I am afraid that interest rates will soon return to zero.

In addition to the space-reduction space, the ability to re-launch the volume is also limited. In addition to the ability of the United States to gradually recover the funds in a wide range of periods, the euro zone, Japan, and the United Kingdom are still in the middle of the volume, and they have to recover the past inflows. Funding is not easy, let alone further quantitative. What’s more, even the United States will stop delisting this month.

Reduce dependence on monetary policy

Therefore, in the case that the easing ability cannot be compared with the early days of the tsunami, the central bank has now changed its strategy to reduce its reliance on monetary policy and turn to other methods to stimulate the economy, so that there will not be more hot money in the future, the global property market. There will be no incentive to rise again.


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