At the end of last year, 10 months after the outbreak of Corona 19 in Wuhan, China, Corona 19 is still spreading with a terrifying momentum, threatening the human ecosystem.
As of the morning of the 7th, the number of corona19 confirmed cases compiled by Johns Hopkins University exceeded 35.6 million and 1,040 million deaths.
The World Health Organization estimated on the 5th that 10% of the world's population may have had Corona 19.
It is said that nearly 800 million Earthlings, 20 times more than the number compiled by Johns Hopkins University, would have been infected with Corona 19.
Due to unprecedented movement restrictions to prevent the spread of Corona 19, the global economic growth rate in the second quarter recorded the worst since the Great Depression in the 1930s.
Most countries except China showed negative growth rates, and in particular, advanced countries such as the United States and Europe recorded double-digit negative growth rates.
In the United States, the unemployment rate in September reached 7.9%, and the number of people who lost their jobs is the highest ever.
However, despite the worst-ever real economic slowdown, the global stock market and real estate market heated up, and bankruptcy filings declined.
The British Economist reported that US bankruptcy filings declined by 27% until August this year.
According to data analyzed by researchers at the University of Illinois, Brigham Young, and Harvard, the number of bankruptcy filings for eight months this year has decreased by 140,000 from the same period last year.
Individual bankruptcy filings decreased by 28% and corporate bankruptcy filings decreased by 1%.
Housing prices in developed countries, which fell by an average of 10% during the 2008 financial crisis, have risen despite the widespread corona19.
The Economist reported that in the second quarter, when the Corona 19 situation was the most severe, housing prices in G7 countries rose an average of 5% from a year ago.
The stock prices of real estate development and trading companies, which declined in the early days of the outbreak of Corona 19, have also recovered almost to levels before Corona 19.
Home prices in Germany in August rose 11 percent from a year ago.
In the second quarter, the median increase in US housing prices was higher than during the 2008 financial crisis and the rising prices of houses, The Economist reported.
Both Korea and China are tightening regulations on home purchases to prevent a surge in housing prices.
The Economist cited three changes in the monetary policy and fiscal policy of each country and home buyers' preferences according to Corona 19 as the factors for this increase in housing prices.
Central banks in each country have cut their benchmark interest rates by an average of 2 percentage points this year.
Due to the cut in the base rate, the interest rate on a 30-year fixed-rate mortgage (home mortgage loan) in the US fell from 3.7% at the beginning of the year to 2.9%.
As mortgage rates fell, many people switched from existing mortgage loans to newer mortgages with lower interest rates, or increased the size of their mortgage loans.
Mortgage lending growth in the UK and the US is at the highest level since the financial crisis.
The second factor in rising housing prices is government funding.
In general, when the economic downturn strikes and the number of unemployed increases, mortgage loan delinquency increases, and as seized houses are sold for sale, housing prices fall.
However, in response to Corona 19, the money distributed by governments through subsidies, temporary leave support, and welfare support expansion amounted to 5% of the gross domestic product (GDP).
Accordingly, the economist analyzed that the disposable income of households in the G7 countries in the second quarter of last year increased by $100 billion from before Corona 19.
Other policies to boost the housing market followed.
Spain allowed lenders to stop repaying mortgages, Japan asked banks to defer repayment of mortgage loans, and the Netherlands temporarily banned foreclosures.
As a result of restricting foreclosures, the UK's foreclosure assets in the second quarter fell 93% from a year ago, and the US mortgage foreclosure rate was the lowest since 1984.
The Economist cited the change in consumers' preferences for housing due to the expansion of homework as a third factor that caused the global housing price to rise.
As the work from home has expanded due to Corona 19, about 1 in 5 workers have increased their desire to live in a wider and better home while working at home.
In the case of OECD countries in 2019, 19% of household income was invested in residential life, and middle-class citizens want to invest more money in living.
In the United States, housing prices in and outside the city center are on the rise in most cities except New York and San Francisco.
In the UK, apartment prices rose 0.9%, while single-family home prices rose 4% from a year ago.
This is a proof that the preference for detached houses with gardens has increased.
The Economist expects housing demand to decline if the government's various support policies are suspended.However, given that the construction of new homes in the United States has decreased by 17% since Corona 19, the decline in supply offsets the decline in housing demand, and housing prices will not easily fall. Expected not.
On the other hand, the Financial Times (FT) of the UK predicted that "in the near future, there will be a sharp downturn in the global real estate market."
The National Institute of Economics and Social Affairs (NIESR), a British think tank, said, "The market is artificially sparkling due to a reduction in transaction tax," while forecasting that house prices will fall by 14% on average next year.
The U.S. mortgage delinquency rate in the second quarter of the year reached 8.22%, the highest in nine years, which is also supporting this argument.
As the second pandemic of Corona 19 becomes a reality in Europe and the United States, it is unclear whether governments will soon be able to stop supporting monetary and fiscal policies.
In the case of the United States, President Trump has postponed discussions since the November 3 presidential election, but is pursuing a second support plan.
The problem is that the real economy has stagnated since Corona 19, while the gap between rich and poor is widening as asset prices rise.
Some argue that the government's policy support is rather deepening social inequality.
Researchers from Illinois, Brigham Young, and Harvard University found that 13% of corporate bankruptcies in the U.S. that occurred until August this year fell by 13%, while Chapter 7 filings for complete bankruptcy, mainly used by small and medium-sized businesses, declined. Bankruptcy filings under Chapter 11 increased by 35%.
Chapter 11 bankruptcy filings for companies with assets of more than $50 million have doubled.
In a situation where it became difficult to receive legal services due to Corona 19, small and medium-sized enterprises chose bankruptcy as a last resort, while large companies used bankruptcy as a means of protection.
In the case of personal bankruptcy, filing for bankruptcy by Chapter 13, which mainly prevents foreclosures by people with large assets and readjusts their loan repayment plans, has decreased by 41%, whereas bankruptcy by Chapter 7, which is filed by people with low income and low assets, is 20. The percentage was only decreasing.
It is an analysis that the wealthy were relatively less affected by Corona 19, and the government's support policies, such as mortgage repayment, gave relatively more benefits to the wealthy.
Pope Francis announced on the 4th a new encyclical proposing a vision after Corona 19, saying, "The pandemic is exposing the vulnerabilities of the world system, and the neoliberal policy such as the dripping effect is not helping the poor." Urged.
"It's time to rethink our way of life, relationships, social organization, and above all, the meaning of our existence" so that social solidarity is not broken by the fear and uncertainty of Corona 19, which is hitting socially vulnerable groups such as the elderly and the poor.