as have been killed in peru, in the latest demonstrations. to modern the resignation of president, deena boulevard, a security forces confronted crowds in the southern city of hooley aka quality took off his art of impeachment under rest of federal castillo last month on charges of rebellion and conspiracy. melina sanchez has mona from lima protestors clashed with police. some of the protesters with make chief guns and police apparently firing with live rounds. most of the people that have been killed. apparently, according to the governor of who know people that have been shot in the chest and in the head. now, many of the depths happened with protesters were trying to overrun the airport. thousands of demonstrators in brazil have rallied in defense of democracy. they offer an attack on government buildings by supporters, a former placement jebel sanara, calling for those responsible to the jailed paint. i left the mac editor to see a new models are rallying south palo. they want those responsible, not only the ideological authors, intellectual office, but the ones who actually carried out the attack on this country. 3 institutions to be put in prison. but also they're asking for president or former president rather bull sonata to also be put in prison and his 3 sons while they're at it. so there is this call for there to be no amnesty, as has happened in this country many times in the past that these people pay for their attempt to destroy what they call this country's democracy. about 1500 people have been arrested in connection with the riots. the president says there remain in custody until the investigation is completed. yes, residential biden, us push for tougher action on illegal migration and drugs. in a meeting with his mexican counterpart talks and mexico city come ahead of the north american lead of summit. and they'll be joined by canada's prime minister just intruder. and the u. s. president has declared a state of emergency in california where tens of millions of people are being warned to pay for more severe storms. at least 12 people have died during the bad weather in the past 10 days. so those are bad lines that he's continues here on al jazeera, after counting the cost spectrum. thanks for watching bye. for now, the world economic forum returns to dabble since january to assess the global economy was shaped by the pandemic. and the war in ukraine can leaders from government and business prevent a promised decade of action becoming a decade of uncertainty, extensive coverage on al jazeera. ah, [000:00:00;00] i hello, i'm adrian and i get on this is counting the cost on al jazeera, your weekly look at the world of business and economics. this week, one man's collapse, another man's correction. we look at what's in store for real estate. as fears of a global recession growth also this week, why millions of homeowners in the eurozone beyond the highly exposed to rape rises during any economic downturn. plus, we ask a property, invest a where he sees the market heading in 2023. and what homeowners can do to protect themselves, ah, is the global housing market heading for a painful downturn, things looking peachy for the sector at the end of 2021. house prices across countries of the o. e. c. d o growing up the fastest pace for 50 years, and all of this was underpinned by low barring costs and save us with money to ban . now, just over a year later, things are not looking, so rosie high inflation has led to central banks, hiking that base rates. wages aren't keeping up with the rising cost of living at the economic repercussions from the war in ukraine will be felt for some time to come. well, joining us now to discuss all of this is andrew bomb. andrew is a meritus professor of practice at the side business school university of aux, but he's also the chairman of new cor capital management. good time with us, andrew talk us through the big picture here, the macro economic situation underpinning the housing market right now. as we it looks like about to enter a global recession. yeah, i think, i think the big news adrian about, about the housing market is, is most people would say, how is rising interest rates and the fact that they are now back to higher levels that we saw last in about 2007. so if you recall, the global financial crisis led to matthew cut and interest rates thrown in the u. k. 5 courses about one of the off by 2019 through tory, 2009. and then and then they sort of come out again because colby, so we've, we've got you so this really low interest rate environment. and that's all reversed in the last 6 to 8 months. and that sort of cause people to assume that we've got a housing problem because of the rising cost of debt. fine. so clearly a big issue and that sort of creating a lot of concern in the, in the housing markets globally. right now, the big news, other lots of other things that we also need to be aware of, the tendency of governments to regulate, to protect tenants is one thing is another. so environmental concerns and what we do about insulating els is that the concern and then just the general lack of homes, you know, the homelessness problem. the fact that in the u. k, we think we've got to short your 3000000 homes or so. all of that is a problem as well. so when you put everything together, you know, accounting is clearly an issue, which is the top of a lot of people concerns right now, are we heading for a global recession and is the air of cheap money? well, actually over, well, i think the air money is, wasn't truly over. i think that's the sort of an easy question to answer. the 2nd one i learned a couple of years ago that making forecasts too dangerous. so we'll have our opinions. but yes, the ear of money is probably over. i think we've been through a very, very unusual period from 2009 to 2022. when we had abnormally low interest rates and, and we will go and show those very low interest rates, you know, we've, we've been able to borrow money incredibly low prices. and people like me with gray hair. i've been expecting some sort of reversal in interest rates for quite a long time, and we've actually been over forecasting that, you know, it's, it's taking a lot longer to reverse the, we're expected that the arguments in favor of global recession. i think you certainly in recession right now, or heading for a for a slow down next year. that's partly because of massive increases in commodity prices, teaching bells. so we got a problem. we've also got a budget that the squeezing money out of the economy rolls and putting it back into the economy, which is what you'd be hoping during the time weakness. so we're going to double head, and all countries are being affected by rising costs and, and, and huge inflation. and the reaction of both governments to huge in places, right, interest rate increase rate interest ring. we place a price of slow down or recession. you say that all countries are experiencing this for any particular markets around the world when it comes to housing. that will feel the pain more than others. well, did they, you know, some market characterized by hotter money than others. you know, so there are some international markets where there are flows of capital, which can be good and can be, can be bad. you know, if you go to a market where people speculate, for example, then you get cost of only flying in and out. when you bought speculation, you're more likely to get rapid changes in shoes again. so that, that would include markets like new zealand, australia, the u. s the u. k. i think the u. s. is probably the best example of that where people will speculate on houses, you know, by 3 or 4 they can afford it against all about the you've got fundamental and the supply of housing in some markets, the u. k being an example, so these kind of confusing because you got a big on the slide housing and you've got the possible you've helped me flowing it out and other confusing for the cause is the weakness of some currency. so pounded weak and overseas buyers will find house prices more attractive, the domestic buyers. so you got quite a few, quite a few issues that are banging together to create some sort of view about whether you're going to get price falls or not. and generally speaking, house prices don't fall very quickly when you already speculative market. the us is probably the best example. let's talk about the u. s. in particular than it is. we set for house price correction in, in the us. is that going to cause saw the damage to, to, to the economy the, i mean, let's not forget that the, the financial crash 1213 years ago began in the u. s. you too bad home loans. yeah, i mean, yes, i mean, i think the, the house price correction has already started in the us. and house prices little list certainly below, already years time than they are now in the u. s. and you can, you can read this to what you can say that, that is going to lead to a slow down because people feel less wealthy. some people are forced to sell their houses. so people lose equity, they lose capital. they're less likely to spend molly, you then get some of the slow down. but there's another way of looking at it and that is the cheap house price is good for people. you know, a lot of people would say the house prices are become too high. but the spectrum development and health price, it needs to be squeezed out of the system. but higher interest rates, all bad thing is if you can find out your house purchase when they settle down at low house prices. so i'm not completely sure that low house prices lead to recession. i think it can work both ways. but what about the federal reserve? how can policy makers bring down inflation without hurting homeowners in the u. s. and triggering more foreclosures. yeah. well, very difficult. i mean, the good news about the us is that is a lot of mortgage interest is fixed. so the majority of borrowers will fix their mortgage rates, low interest rates and the vast majority. so anybody who finance that debt before 2021 will find out that probably low interest rates are going to be affected by the increasing rates. because only it's in markets where you've got variable rate mortgage financing, that you're going to see a bit of stress and even the u. k is moving more towards fix rate, find out. so there are, there's going to be a number of very unfortunate people who are false to orally apps historically high interest rates. but the vast majority of borrow is already fixed finance at lower rates. it's been really good to talk to andrew on counting the cost many thanks. indeed for being with us. andrew ball. thank you. now let's take a look at how people fonda homes around the world. not all of them share the same exposure to risk during any global economic downturn in the u. s. for example, mortgage rates tend to be fixed for 2 or 3 decades. so the pain from rate rises can often be delayed for owners. in contrast, in australia, around 80 percent of mortgages, a tied to variable rates, homeowners that are the most exposed to higher rates in the world. in sweden, it seeing a reverse in its housing boom because of energy costs and higher rates. there are many take on interest, only loans that don't require paying off the principal loan. finland's mortgage market however, is almost entirely priced at flossing rates, but those who live in the south of europe tend to live in mortgage free households . where inheritance or family support is a common route ownership, a germans, a more likely to rent than own their homes. so rate rises will have less of a direct impact on them. with a more on the nordic perspective on home buying, we joined by oust, who's a professor in financial economics at n t n u business school. and he's in osler in norway. good to have with us talk us through why people living in scandinavia often go for these interest. only mortgage is rather than fixed or variable reason why that is partially cultural and partly historical. and partly because the difference in regulation. so there are, i don't, course when he comes to cultural b, r, have a great deal of security net in the developer states in the northern conference. so you are supported in, in a lot of ways. so it's, it's not so risky. and we tell them that it can insurance, so it's beneficial for them to have floating interest rates or, and not fixed interest rates. and the last money regulations, the positive for the households, when they don't get extra mortgage, we're sample by shooting pick interest rates. but if people have interest only mortgages, the never actually get a pay off the the full loan on the property. therefore, presuming if they want to end up owning the property in which they live, they have to have another vehicle which is going to pay off the principal some to have. yeah. interest more only for just a time, limited time period, for example, 5 years and then they start to pay and ah, payment. so it's not interest only for the whole term. no, so keep lean a limited period. typically when you are young household to it's just entering the market and then oper while when you play their their wages are increasing, then they start to pay down payment on the lot. ok. sweeten the moment is saying a reverse. it's housing boom. explained for us. why, why that's happening to us, we are, we have a future 1st expense, especially under karone up where the interest rates become negative actually. and then you got a huge boom, and then now we got combust as. so it's, it's printing hard actually, and it's harpy, of course, cost by higher interest rates and partly by inflation. so we didn't have 10 percent in placement so that consumers quite hard. and so they have less money to spend them housy. what about in finland mortgages, there are almost entirely on a floating interest rate of variable rate. so we could assume the homeowners, their face more risk from rising interest rates than perhaps elsewhere, or the euro zone. yeah, so they have didn't have this cycle. so the price is actually quite low. compare to sweeten annoying. so with a garland low level who the interest rate, the dos shouldn't keep them at hard because they're not that much in that. so yes, they have floating in we have a noise as well. but because the dwelling is cheaper, it doesn't harm them as much because we didn't have this boom period at the same level as being away. and we and what is that, that, that the situation in norway, at the moment, the property market, what, what's happening there in norway? no, we have, it's starting to see a decline in house prices. not that it's a 3 year win. so the policy has been more limited, but we're starting to see something and it's very exciting or interesting to see what's happening down there in february. keep reverse strong markets in annoying if it will be a poll and goes to months, it will probably continue. and one thing we haven't talked about is the rental market across that, that the scandal davian countries, how many people are renting that? so it's very different between the concrete in noise. it's quite a limited number of household that it's renting. so 20 percent in all way in a little bit more in the, in them in sweden and merck. we have regulate grantsville markets and a highest share of the household who is 20. 1 of the things that we hear about the you can particular is that there are entre bananas who look at buying property as a sound investment. there's the buy to let market. does that exist in scandinavia? yeah, so it's actually the rent for by but it's, it's just starting up. so we will see if that will become popular. but it has been used like a put all 4 young households to enter the market. but it has just started. so we will see may be, or the increase increase strengths will push that forward and increase the size of the market professor. it's been really good to talk to you on counting across many thanks. indeed for being with us there in our slow thank you the u. k, the economy shrank for a 4th consecutive month in november, pointing to a deepening recession. that's expected to last more than a year. mortgage re possessions that month also saw by more than 90 percent on the year before, as the cost of living crisis bites. so where does all of this lead people who have mortgages? well someone who's written extensively on this subject as rob dicks, he's a property investor, ortho and co founder of property how he joins us now from london. rog, good to have you with us. what are you seeing in the property market specifically there are the u. k right now. well, it's been cooling significantly, not just the many budget, but that did kick it up again, but we were talking about this back in june, july kind of time. the move market cooling right off, but interestingly not as it's not as bad as sentiment would have. you think that if you look at the actual beta, you look at the number of property having price cuts. if you look at it by interest and things like that, it's all in bright down. but if any come back to where it was in a new year kind of before the cove, it, it's all set in the market into overdrive not going to get worse from here. it could day. but i feel like at the moment the, the sentiment is worse than the reality on the ground. and the flip side of that is the rental market at the moment is super strong. yeah, the bank of england though is saying that it might have to raise rates again at least a couple more times. but how long is this list on cars? you know, you said that things aren't as bad as, as perhaps the sentiment would lead us to believe. but how long do you think this pain is going to go on? i think the bank of england is almost, well, he's going to raise rates from where they are now off to the last rate hike up to where they are now. they did signal quite strongly that they wouldn't be raising right. as far as market price dead, i think that's interesting because they still went to a period of talking very tough about rates. and now it went out there with nervous about what is going to do to the market housing in particular. and they're trying to talk about bound again. it all comes down to the path to inflation, which is really hard to predict. my personal view is the inflation will start to come under control in the next 6 months or so. i'm not going to make the bank of england job significantly easier, and they're not going to want to raise right? any further may have to, of course, is going to be upwards from hair. so i don't think anyone's going to look back at data trends degree and go what a great year this was. but i do think it's going to feel better than it does right now. none the less, i mean, even if the rates don't go up as much as perhaps we're expecting even a small rate. why is going to have a significant impact upon homeowners and the amount that they have to pay to, to mortgage companies. for anyone who isn't on a fixed rate right now, what could homeowners do to protect themselves? i think we've seen like the last month that the mortgage market started to significantly improve. we've seen breaks coming down over the last month and we've seen more product choice. lots of lenders pulled that products off the market backdrop, september, october, which was going on. and now they're starting to come back again. so i think if you've got the option of doing nothing and just waiting, that's probably a pretty good move because i do think things will improve from where they are. now . if you're in a position where you have to do something, because you've got a right that's come to them that come to a really nasty variable, right? that it's really important to work with a good mortgage broker. you can show you what their options are, cuz there are things you can do such as going onto a variable rate with no penalty for sort switching to a fixed rate, which means you can get a rate that fast and you've got now and then come on to fix when fixed is come to a court price that you're happy with. so there are all things you can do. but i think if you're a homeowner who's on the right, you say you've got to fix that, got a few years to run that you fix that fail 2 percent or something like that, which is pretty realistic about here guys. you need to be prepared that when that rate comes to an end, you're not going to be going back on to 2 percent right. target is going to be a long time till we see that again. so it's a good time to be preparing for what rates are likely to be in the future. so if you are the vision to have time to do that, that's great, but it's still going to come at some point. rob, where does all of this fit into the 18 year cycle? perhaps you'd like to explain what exactly, but the 18 year cycle is? yeah, the cycle, it's a theory. it's gonna come up with my uncle, fred harrison. he went back and looked at data going back for about 100 years and found that the real estate tends to land value more accurately or tends to move in the patted, where on average, used or got a few boom and bust. so prices all right steadily for the most part they, they have a couple of years. ready shop lee, and then they crash again. the 18 year part is an average. and so it's not something you can set your calendar by and decide who, when you should be buying and selling property. but it is an indication that's been useful. so we used to use or correctly predict that price. it wouldn't fall in the wake of rec, and covalent bond consensus at the time. so the cycle, if you're following the 18 years is currently will bend to end in 2026. so according to that, there's another few years to go. so as an investor, that's interesting, but there are things you can do, allows you to actually capitalize from the strong growth of the end of the cycle. but everyone thinks of the cycles come to end already as a highlighted, it's not something i worry about too much because you, you buy a home because you want to live. so it's not good either to try to time the market in that respect. the real key is to be able to make sure you can afford your retirement because what we're trying to us is that yes, price crashed, but the long term trend is always up to. the real key is to make sure that you're not supposed to sell one of those times when prices have fallen. because if you do, just keep on holding that eventually they'll come back to where it was and beyond. what you've written about how pro, interest, only mortgages. you are something we were talking about a few minutes ago, whether incredibly popular in sweden. of course, if you want to end up owning the home at the end of it, you've gotta have another vehicle to pay off of the principal, given the global recession fears and everything. this happening in the u. k. right, right now, as your stance on the interest only mortgage is changed. if not, why not? i think it's very different for homeowners and investors, because if you're home or not, most people will just want to have that home paid off in most cases. as soon as you can, so in that respect, just having a fixed payment where you know, if you make that payment for the right number, give you then the property free and clear. that's what most people get about to be able to do. it's quite difficult to get a interest or any movies on a residential property anyway for investors. i think it's different for investors. i think going into the reason i say interest only is better is that it gives you flexibility is not that you won't want to pay off chunks of your mortgage. you can buy off of your mortgage wherever you want to, but you're not locked into that repayment schedule. so as long as you keep the interest, you have higher cash flow because you're not paying the principal off. and you can decide when you want to pay it or you can decide which of your properties you will to target to make payments day. so it's really about flexibility. so nothing about the current situation changes my view on that when it comes to investors. but that's completely different for there will be some owner occupied as he would feel the same way. but the majority of cases, they just go to want to pay off the bat makes a lot sense. you mentioned how boy and the rental market is at the moment. i mean, there are 2 ways of looking at this. people who rent are being faced with, with increases in the rent right now, but investors finding that it's pretty good. would you invest in a property right now if so, why and where? yeah, i'm investing right now if they don't go to going through at the moment, both in the middle and in the u. k. and the reason for that is i'm investing for the next 20 years plus, so i'm not bothered about what happens in the next couple of years if prices fall doesn't really matter. because as we talked about the proxy cycle, the long term trend is always upwards. so that doesn't bother me. and as an investor breads are particularly strong right now, which is helpful. but brents tend to be very, very steady. so even when house prices fall, we saw in 2000 and i read, stay steady and sometimes even rise a bit. you, there are more people wanting to rent, so you've got your rental income, which is very steady, very secure. that kind of persists for many, many years. but then the actual prices will move all over the place. sometimes we up sometimes they'll be down. if you're investing for low enough, then you can not be too concerned about what happens bucks a month, year to get robertson really good to talk to you on counting the cost. many thanks . some dates for being with us. thank you. and that's our show for this week. if you'd like to comments on anything that you've seen, you can treat me. i'm at a finnegan on twitter. please use a hash tag h a c t c. what do you do or you control us alive? counting the cost of algebra dot net is our email address. as always, there's plenty more few online at al serra dot com slash ctc. that takes you straight to a page and you'll find individual reports links at a time episodes to catch up on. but that is it for this edition of counting the cost. i'm adrian finnegan from the whole team here and thanks for being with us. the news on al jazeera is next ah witness inspiring films from around the world. they shall not stop the violet and kill the power is fast witnessed, intimate portraits and epic struggles because leadership is off the phone with not just the people witness the human spirit and bitter reality. there fill men, believe women are appropriately witness award winning voice is telling groundbreaking stories. witness on al jazeera, harmful pathogens are increasingly affecting our lives with terrible consequences. a new documentary asks why that. we've learned any lessons in the h. i. v epidemic in the fight against coven 19 how we ignore the global. so to put profits before people. and it won't cost ah, time of pundents on, i'll just budget, ron harris, roberts, police and buddhist is charged against each other in the french capital. british demonstrate, as they're angry at the forty's response to the attack on friday, which killed 3 refugees. they want answers from the police. why did it take so long for them to respond to the attack? why have they not designated this? it better is to attack and why wasn't security provided to the punch the center offered? it had only been asked for. we the kurdish women are still asking for justice. and now again, i'll blood is spilled in france. we are angry and the french state is responsible. the protests have come down here in paris. the police and security services are out in wards clearing the protest is. but the anger in the streets of protest video, the killings have pushed a move. i'm an francis, my group community protest in other cities as well. they want to know why an attack on a minority community isn't being designated 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