A graphic presentation of the 2007 global property bubble by McKinsey Quarterly.
According to McKinsey Quarterly, ``Although the current crisis started with the bursting of the US housing bubble, other economies around the world are feeling the effects of their own real-estate booms and busts. From 2000 through 2007, a remarkable run-up in global home prices occurred (see exhibit). But that trend has reversed abruptly. In 2008, the value of US residential real estate fell 10 percent; the global average fared only somewhat better, declining by almost 4 percent. We estimate that falling home prices erased more than $3.4 trillion of household wealth in 2008. And because home prices are slow to correct, the current slide may persist for some time, which could depress global consumption."
Additional observations:
-The US bubble had been dwarfed by property bubbles mostly in Europe.
-3 major economies, Switzerland, Japan and Germany had no bubbles yet were similarly hit hard (transmitted from Banking and exports)
-Asia (and possibly emerging markets) was mostly exempt-except for Australia.
According to McKinsey Quarterly, ``Although the current crisis started with the bursting of the US housing bubble, other economies around the world are feeling the effects of their own real-estate booms and busts. From 2000 through 2007, a remarkable run-up in global home prices occurred (see exhibit). But that trend has reversed abruptly. In 2008, the value of US residential real estate fell 10 percent; the global average fared only somewhat better, declining by almost 4 percent. We estimate that falling home prices erased more than $3.4 trillion of household wealth in 2008. And because home prices are slow to correct, the current slide may persist for some time, which could depress global consumption."
Additional observations:-The US bubble had been dwarfed by property bubbles mostly in Europe.
-3 major economies, Switzerland, Japan and Germany had no bubbles yet were similarly hit hard (transmitted from Banking and exports)
-Asia (and possibly emerging markets) was mostly exempt-except for Australia.
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