Are Housing Prices a House of Cards?

The first big city to boom was London, starting around 1996. Boom mentality spread to Los Angeles, New York, and Sydney around 1997, to Paris in 1998, to Miami, Moscow, and Shanghai in 2001, and Vancouver around 2002. These and other cities have been booming pretty much ever since; prices in most are up at least 50% in real terms since 2000. This has been a big windfall to homeowners, but has hurt anyone planning to buy.

Now growth in home prices is weakening in some of these cities. The rate of price growth in London and New York slowed sharply over the past year, to only about a 1% real increase in the second quarter of 2004. In Sydney, home prices actually fell in the second quarter.

Has the boom ended? Will no other cities benefit? Worse still, could the mood in housing markets soon lead prices in downward?

To continue reading, please log in or enter your email address.

To read this article from our archive, please log in or register now. After entering your email, you'll have access to two free articles from our archive every month. For unlimited access to Project Syndicate, subscribe now.


By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.