Real estate prices are influenced by a variety of factors, including supply and demand dynamics, interest rates set by central banks, and the availability of mortgage financing.
However, not all properties are affected equally by these dynamics. Properties purchased with cash may be less sensitive to fluctuations in interest rates since they do not rely on financing. High-end properties or those in desirable locations often see different pricing behavior compared to lower-end properties that are more dependent on mortgage financing.
Properties that are heavily financed through mortgages may experience significant price declines as affordability decreases and buyer demand wanes.
Conversely, cash transactions might still reflect true market value based on supply and demand since these buyers are less sensitive to interest rate changes.
So If you have mortgage and you fall in to area where a lot people have mortgage in your city or neigbourhood then your home Market price is more influenced of central bank rates.
Since the mortgage is leverage position priced in with central Bank rates not with much of real organic supply and demand of asset.
Mortgage-Heavy Real Estate Markets
In regions where real estate transactions are predominantly financed through mortgages, the market is more sensitive to changes in interest rates. These areas typically have a higher percentage of homebuyers utilizing loans to finance their purchases. The following countries and cities are known for having significant reliance on mortgages:
United States
Major cities: New York City, Los Angeles, Chicago
Canada
Major cities: Toronto, Vancouver
United Kingdom
Major cities: London, Manchester
Australia
Major cities: Sydney, Melbourne
Germany
Major cities: Berlin, Frankfurt
France
Major cities: Paris, Lyon
Spain
Major cities: Madrid, Barcelona
Italy
Major cities: Rome, Milan
Netherlands
Major cities: Amsterdam, Rotterdam
Sweden
Major cities: Stockholm, Gothenburg
New Zealand
Major cities: Auckland, Wellington
Ireland
Major cities: Dublin, Cork
Belgium
Major cities: Brussels, Antwerp
Austria
Major cities: Vienna
Switzerland
Major cities: Zurich, Geneva
Japan
Major cities: Tokyo, Osaka
Cash-Dominant Real Estate Markets
In contrast to mortgage-heavy markets, some regions see a higher proportion of cash transactions in real estate purchases due to cultural factors or economic conditions that favor cash buying over financing options:
Countries with low mortgage usage and high cash transactions:
Italy (especially rural areas)
Greece (islands and tourist areas)
Portugal (Algarve region)
Turkey (tourist hotspots)
Spain (rural areas)
France (provinces)
Mexico (beachfront properties)
Thailand (popular tourist destinations)
Indonesia (Bali)
Philippines (resort areas)
Brazil (coastal regions)
Also would include various countries in Africa and parts of Eastern Europe where cash transactions are more common due to limited access to credit.
Ideed mortgage and loans and credit are leverage and some point it will end bad.
Canada is in deep leverage credit there is buy to let ponzi going on a lot
