Central banks’ aggressive interest rate hikes have increased mortgage costs, discouraging buyers and making homeownership less affordable. In cities like London, New York, and Sydney, real estate prices have stagnated or slightly declined after record-setting highs in recent years.

Impact on Buyers and Sellers

For buyers, the cooling market may offer more opportunities to negotiate better deals, particularly in markets where inventory has increased. Sellers, however, are adjusting their expectations as properties stay on the market longer and bidding wars become less common.

Long-Term Outlook

While short-term declines may cause concern, experts predict that real estate markets will stabilize as inflation eases and interest rates normalize. In the meantime, investors are eyeing rental markets and alternative assets for returns.