There is little chance that the free money that fuelled a boom will return, and the global property markets, rattled by the sharpest increase in interest rates in a generation, will benefit much from the gradual easing of borrowing costs.
The multitrillion-dollar industry has suffered greatly as central banks have raised borrowing costs. This industry flourished in the decade following the global financial crisis when the cost of money was lowered to zero. Currently, interest rates are being lowered by central banks, including the US Federal Reserve, the European Central Bank, the Bank of England, Switzerland, and Sweden.
According to consultants Falkensteg, the number of property insolvencies in Germany has been increasing since early 2022 and surpassed 1,100 in the first half of this year.
Over the 12 months ending June 2024, the construction industry in Britain saw approximately 4,300 insolvencies, more than any other industry for the previous two years.
Rising borrowing costs and remote work are causing severe pain for offices, but the effects are also being felt in the large housing market, which has collapsed in Germany and faltered in Britain.
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