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Charted: The Global Decline in Consumer Confidence

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Declining Global Consumer Confidence in 2022

Charting the Global Decline in Consumer Confidence

Our plans to buy new things, travel, invest, and save money, all rely on one crucial factor—our ability to pay for it.

This ability in turn is dependent on not just our current savings, but our expected income and confidence in the economy, i.e. consumer confidence.

This graphic by Gilbert Fontana uses OECD data from 2019‒2022 to chart the rise and fall of consumer confidence in nine major economies.

What is Consumer Confidence?

Measured at a base value of 100, the Consumer Confidence Index takes consumers’ expectations and sentiments about their financial futures into account to indicate household consumption and saving patterns in the future.

An indicator above 100 means that there is a boost in people’s confidence towards economic prospects. This means that they are less likely to save and more inclined to spend money in the near future.

On the other hand, a value below 100 indicates that consumers are pessimistic about their economic standing in the future. This can result in them saving more and spending less.

Inflation, job losses, and expectations of a not-so-bright financial future can shake this confidence, making consumers think twice about their consumption.

Global Consumers are Becoming Pessimistic

After falling down and quickly recovering during the COVID-19 pandemic in 2020, consumer confidence seems to be trending downwards across the globe.

CountryConsumer Confidence (Oct 2021)Consumer Confidence (Oct 2022)
🇫🇷 France100.896.5
🇩🇪 Germany101.195.9
🇮🇹 Italy102.896.8
🇯🇵 Japan99.096.7
🇬🇧 UK100.791.6
🇺🇸 U.S.98.196.8
🇨🇳 China103.292.1* (Sept 2022)
🇦🇺 Australia100.498.0
🇰🇷 South Korea100.798.3

The UK was hit the worst as its Consumer Confidence Index (CCI) dropped down to 92 in 2022, from 100.6 in 2021. Just behind is China, which also fell to 92 in 2022 despite sitting at 103 two years prior.

The remaining countries had CCIs between 96‒98, including France, Germany, and the U.S.

Even with the most optimistic populations and a CCI of 98, South Korea and Australia, were below the ideal 100 mark and indicated pessimism.

The main culprits of this declining confidence in global economic markets including expectations of rising inflation—especially for food and gas—as well as high interest rates, the threats of a looming recession, and layoffs in major sectors.

To learn more about confidence and predictions for the upcoming year, check out Prediction Consensus: What the Experts See Coming in 2023.
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This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.

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Real Estate

Mapped: The Growth in House Prices by Country

Global house prices were resilient in 2022, rising 6%. We compare nominal and real price growth by country as interest rates surged.

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The Growth in House Prices by Country

Mapped: The Growth in House Prices by Country

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Global housing prices rose an average of 6% annually, between Q4 2021 and Q4 2022.

In real terms that take inflation into account, prices actually fell 2% for the first decline in 12 years. Despite a surge in interest rates and mortgage costs, housing markets were noticeably stable. Real prices remain 7% above pre-pandemic levels.

In this graphic, we show the change in residential property prices with data from the Bank for International Settlements (BIS).

The Growth in House Prices, Ranked

The following dataset from the BIS covers nominal and real house price growth across 58 countries and regions as of the fourth quarter of 2022:

Price Growth
Rank
Country /
Region
Nominal Year-over-Year
Change (%)
Real Year-over-Year
Change (%)
1🇹🇷 Türkiye167.951.0
2🇷🇸 Serbia23.17.0
3🇷🇺 Russia23.19.7
4🇲🇰 North Macedonia20.61.0
5🇮🇸 Iceland20.39.9
6🇭🇷 Croatia17.33.6
7🇪🇪 Estonia16.9-3.0
8🇮🇱 Israel16.811.0
9🇭🇺 Hungary16.5-5.1
10🇱🇹 Lithuania16.0-5.5
11🇸🇮 Slovenia15.44.2
12🇧🇬 Bulgaria13.4-3.2
13🇬🇷 Greece12.23.7
14🇵🇹 Portugal11.31.3
15🇬🇧 United Kingdom10.0-0.7
16🇸🇰 Slovak Republic9.7-4.8
17
🇦🇪 United Arab Emirates
9.62.9
18🇵🇱 Poland9.3-6.9
19🇱🇻 Latvia9.1-10.2
20🇸🇬 Singapore8.61.9
21🇮🇪 Ireland8.6-0.2
22🇨🇱 Chile8.2-3.0
23🇯🇵 Japan7.93.9
24🇲🇽 Mexico7.9-0.1
25🇵🇭 Philippines7.7-0.2
26🇺🇸 United States7.10.0
27🇨🇿 Czechia6.9-7.6
28🇷🇴 Romania6.7-7.5
29🇲🇹 Malta6.3-0.7
30🇨🇾 Cyprus6.3-2.9
31🇨🇴 Colombia6.3-5.6
32🇱🇺 Luxembourg5.6-0.5
33🇪🇸 Spain5.5-1.1
34🇨🇭 Switzerland5.42.4
35🇳🇱 Netherlands5.4-5.3
36🇦🇹 Austria5.2-4.8
37🇫🇷 France4.8-1.2
38🇧🇪 Belgium4.7-5.7
39🇹🇭 Thailand4.7-1.1
40🇿🇦 South Africa3.1-4.0
41🇮🇳 India2.8-3.1
42🇮🇹 Italy2.8-8.0
43🇳🇴 Norway2.6-3.8
44🇮🇩 Indonesia2.0-3.4
45🇵🇪 Peru1.5-6.3
46🇲🇾 Malaysia1.2-2.6
47🇰🇷 South Korea-0.1-5.0
48🇲🇦 Morocco-0.1-7.7
49🇧🇷 Brazil-0.1-5.8
50🇫🇮 Finland-2.3-10.2
51🇩🇰 Denmark-2.4-10.6
52🇦🇺 Australia-3.2-10.2
53🇩🇪 Germany-3.6-12.1
54🇸🇪 Sweden-3.7-13.7
55🇨🇳 China-3.7-5.4
56🇨🇦 Canada-3.8-9.8
57🇳🇿 New Zealand-10.4-16.5
58🇭🇰 Hong Kong SAR-13.5-15.1

Türkiye’s property prices jumped the highest globally, at nearly 168% amid soaring inflation.

Real estate demand has increased alongside declining interest rates. The government drastically cut interest rates from 19% in late 2021 to 8.5% to support a weakening economy.

Many European countries saw some of the highest price growth in nominal terms. A strong labor market and low interest rates pushed up prices, even as mortgage rates broadly doubled across the continent. For real price growth, most countries were in negative territory—notably Sweden, Germany, and Denmark.

Nominal U.S. housing prices grew just over 7%, while real price growth halted to 0%. Prices have remained elevated given the stubbornly low supply of inventory. In fact, residential prices remain 45% above pre-pandemic levels.

How Do Interest Rates Impact Property Markets?

Global house prices boomed during the pandemic as central banks cut interest rates to prop up economies.

Now, rates have returned to levels last seen before the Global Financial Crisis. On average, rates have increased four percentage points in many major economies. Roughly three-quarters of the countries in the BIS dataset witnessed negative year-over-year real house price growth as of the fourth quarter of 2022.

Interest rates have a large impact on property prices. Cross-country evidence shows that for every one percentage point increase in real interest rates, the growth rate of housing prices tends to fall by about two percentage points.

When Will Housing Prices Fall?

The rise in U.S. interest rates has been counteracted by homeowners being reluctant to sell so they can keep their low mortgage rates. As a result, it is keeping inventory low and prices high. Homeowners can’t sell and keep their low mortgage rates unless they meet strict conditions on a new property.

Additionally, several other factors impact price dynamics. Construction costs, income growth, labor shortages, and population growth all play a role.

With a strong labor market continuing through 2023, stable incomes may help stave off prices from falling. On the other hand, buyers with floating-rate mortgages face steeper costs and may be unable to afford new rates. This could increase housing supply in the market, potentially leading to lower prices.

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