The decline in real estate prices in the region, under the weight of excess supply, tighter lending conditions and the general trend of weaker property prices world wide. The perception that real estate prices here and abroad have peaked may encourage speculators to sell the property they hold before prices start to actually decline in their domestic markets. The additional supply coming to the market will be seen in the form of building of inventory, less sales and eventually lower prices. The decline in real-estate prices would reduce household wealth, bring forth lower consumption and economic growth and possibly damage the asset quality of banks. Its impact will vary from one city to another, being more visible in those countries where real-estate prices have surged most in the past few years.
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