Why faltering NY house prices are an ominous sign

IMF report shows real estate prices worldwide are increasingly synchronised

Clouds are hovering over New York's housing market. A couple of years ago, property prices were spiralling ever higher - much like the new luxury skyscrapers now springing up in midtown Manhattan.

But estate agents say that sales volumes in the first quarter of the year were at their lowest level for six years. Meanwhile, the median price per sq ft was 18 per cent lower than a year earlier, according to some reports. That leaves Manhattan estate agents nervously gossiping about the local outlook. However, it should prompt investors and policymakers to ask a bigger question: Could New York's jitters herald declines in other non-US real estate markets too? Do those global markets, in other words, display "synchronicity", or spillover effects?

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A version of this article appeared in the print edition of The Straits Times on May 26, 2018, with the headline 'Why faltering NY house prices are an ominous sign'. Print Edition | Subscribe