Rising real estate prices extremely dangerous for the world: McKinsey

Zurich, Ta. 13
The last two decades have seen a dramatic increase in world wealth, mainly due to higher real estate prices. Real estate prices have risen due to lower interest rates. However, the situation is "extremely dangerous" for the world, according to a report by Mackenzie.
According to McKenzie, rising net worth has led to an increase in net worth following a fall in interest rates. Asset prices are about 30 percent higher than the long-term average income. This has raised questions about the stability of the world's wealth boom and has become dangerous for the world in many ways.
If real estate prices continue to rise in this way, it will be difficult for people to buy a home, which could lead to a major economic crisis around the world. The risk of a financial crisis similar to that of the 2008 recession, which burst the housing boom in the US, is growing. Debts from property developers like the China Evergrande Group have increased the likelihood of going through the same problem as the US. The way for the world to avoid these problems is to find a way for more productive investments that will increase global GDP. At present, one-third of the world's wealth could be eroded if real estate prices plummet.