The World in 2020

House prices in graphic detail

What are the chances of a bust in 2020?

A decade ago the global financial crisis brought the world to the brink of economic implosion. The cause of that crash? The collapse of America’s $1.5trn subprime mortgage-backed security market. That began a fire sale of assets that threatened to engulf the world economy.

House prices have now rebounded close to or beyond their previous highs in many of the world’s biggest residential markets. According to Standard & Poor’s, American homes are now 15% pricier than they were at their peak in 2007, before adjusting for inflation. In Britain, although housing has been hit by Brexit uncertainty for the past three years, prices are up by 21% from 2008. Meanwhile, in Australia, Canada and New Zealand housing barely faltered in the wake of 2009 and then ran amok: prices are up by 40%, on average, compared with 2009.

The surge is not confined to the Anglosphere. At various times over the past decade, China has sought to rein in the animal spirits of its housing market. To little avail: prices…