Article Image 28640

Signs are pointing to a global property slowdown – why and what does this mean for you?

As we begin 2016, the world’s real estate markets stand at a crossroads. The Economist reported back in October that it had seen house prices rise at an average rate of 4.7% the previous year (in 21 of the 26 economies it tracks). And in December, the Global Property Guide described the boom of recent years as accelerating further, led by Qatar, New Zealand and Hong Kong, all with year-on-year increases of more than 12%.

However, global property company Savills recently put a dampener on these positive trends, predicting a ‘tempering’ of transaction volumes around the world. So why this caution about real estate sales despite such visible growth? And how might it affect you?

Impact of China’s economic slowdown

The Chinese authorities recently brought trading to a halt on the country's stock exchange, as share prices tumbled in reaction to a struggling commodities market. With Chinese wealth creation under threat, luxury property markets in the world’s major cities could suffer. According to CNBC, real estate consultant Knight Frank predicts China’s woes will cut price increases for the world’s most expensive homes from around 3% to 1.7%.

China’s growth slowdown has even impacted commercial rents, particularly in places like Hong Kong, where Chinese tourists are now spending less on luxury goods. Shopping districts such as Russell Street – renowned for the world’s highest commercial rents – are suffering too. It’s been reported that Adidas is now paying about $4.3m HK dollars a month for a store in the city’s Central business district – 20-40% less than what its former occupier, Coach, paid just last year.

How could this affect you?

This property slowdown, coupled with the US Fed’s recent decision to raise interest rates, could mean changing circumstances for mortgage holders all over the world. For example in Sydney, a prime luxury property market, nearly a fifth of all December’s new home loans were fixed-rate. Even though Australia’s Reserve Bank is yet to follow the US Fed, falling global commodity prices and the country’s weakening stock market have prompted Australian borrowers to be wary of future interest rates hikes that could affect their mortgages in 2016.

Elsewhere, governments are taking measures to halt the devaluation of property, such as in Singapore, where the government may be looking at scaling back stamp duty now that house prices are predicted to drop by up to 8% this year.  

What next?

If you’re a prospective investor looking to save money on buying property overseas, be sure to get advice from The Money Cloud's trusted group of foreign exchange brokers. They will be able to help you make cost-effective international money transfers, particularly for larger and regular payments abroad. You could also look into using future-proofing tools, such as a ‘fixed payment plan’, to set rates for your monthly mortgage payments for up to six months at a time.

For more tips and advice, check our specialist property guides for Spain, Portugal and France, or read more about the latest real estate tech on our blog.

Comparison tool

Sending Currency
Buying Currency
Send USD Receive

Latest Articles

Alex Larsen

I've been struggling to find a way to make regular transfers to my Norwegian account from the UK (where I work). Finally I've at least got some pointers for where to start, so I won't have to pay a fortune every time I transfer!

Etta and Pierre Deschamps, Documentree Films

We regularly receive funds from overseas and used the Moneycloud to find an FX company who have helped us with a much better exchange rate than our high street bank. We're 3-4% better off as a result. Thank you the Moneycloud
Spain property


When purchasing a property in Spain, we explain all the steps involved in the purchase. We can demonstrate how to make the most of your money when making the international payments to cover the purchase price and fees and how to avoid exchange rate risks.

washington hotel


As an overseas investor, regardless of the method of hotel management you will decide to opt for, you will be exposed to what are often volatile exchange rates, whether paying for your investment, running costs and overseas supplies and hotel management employees. Read the definitive guide.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter