?? A Stark Future for Housing

Greetings Crunchers!

Welcome back from quite the long Eid break for most of you… and happy Monday to you all.

There's no getting around it: the future of housing is looking pretty bleak. In major metropolitan areas, the cost of rent is skyrocketing, while incomes remain stagnant. More on the above later in the crunch.

Lets get started.......

WHAT’S NEW IN FINTECH?

• Fintech has rapidly gained ground in India. The massive market has a number of specific problems that are now being resolved through cutting-edge technology and ideas. And as things unfold in the post-pandemic normal, we are at the cusp of the next phase of fintech evolution in India.

• Stori, a consumer fintech company founded in Mexico, has hit a $1.2 billion valuation after raising $150 million in its latest Series C-2 financing round. With the raise, Stori joins Mexico’s unicorn club.

• Stripe is the latest high-profile fintech company to experience a significant valuation cut as the market downturn begins to hit the sector especially hard. Last valued at $95 billion, Stripe’s internal value of its shares was slashed by 28%.

• Based on the promise of positive social impact through financial inclusion, fintech has seen meteoric growth while also capturing more impact-related investment funds than any other industry. This growth is driven in part by fintech’s potential for social impact at scale, with fintech executives pushing for financial inclusion and promoting digital security.

A Stark Future for Housing

The pandemic-induced housing boom appears to be cooling off.

A slowdown in the housing market is underway as interest rates in developed economies are set to climb rapidly, according to Goldman Sachs Research. Full article here - https://bitly.ws/sSta

Mortgage rates have spiked sharply since last summer across a number of countries - UK, Canada, New Zealand, and US.; and given the likelihood of further rate hikes, borrowing costs for housing are likely to rise even further.?

The housing picture in many of these countries shows a stark change underway, with already substantial declines in sales across developed economies. Home sales are down by 40% from their pandemic peak in the U.S., and by half in the U.K. Those declines in home sales are meaningful for prices in the near future because a 10 percentage point slowdown in house sales growth tends to be followed by a 2 percentage point slowdown in house price growth in around 6 months, Goldman Sachs Research estimates.

And while house prices are still rising in the likes of the U.S., Germany, and the U.K., they are already declining across Australia, Canada, Sweden, and New Zealand. In the latter, home prices are now 8% down from their peak during the pandemic.

Goldman Sachs Research estimates that house prices will see a peak-to-trough decline of 12% in Canada, 9% in France, and 3% in the U.S. over the next couple of years.?

While the housing market has some headwinds, it’s also notable that the supply of housing is especially tight in many geographies.

Taken together, there are strong signs that the surge in housing sales and prices during the pandemic has come to an end. Goldman Sachs Research expects growth in advanced economies to slow in coming quarters and the recent housing trends only reinforce that expectation. And while a tight housing market may be enough to avoid a slump, the rapid deterioration in affordability and large drops in home sales suggest that a housing downturn is a real risk.

? QUICK INVESTMENT ROUNDS

• Investing app Lightyear has raised €25 million in Series A from Richard Branson's Virgin Group, at the same time announcing an expansion into the EU

• Investor relations fintech Quartr, which gives investors easy access to company information, has extended its seed round by raising a further $2.6 million.

• Fuell, the Spanish startup that has developed a corporate card and expenses management SaaS, has closed a €1.5 million round led by Y Combinator and Fin Capital.

• European insurance tech startup Wefox has raised $400 million in a Series D round of funding, giving the German company a post-money valuation of $4.5 billion.

?? REPORT OF THE DAY

The Rise of Embedded Finance: A Report on the Evolution and the Future of Embedded Finance

Over the last decade we have shifted from disrupting financial institutions to embedding the world of finance behind apps and websites to enable a better and smoother user experience and allow high digital traffic and user players to further monetize and increase stickiness.

While some of the early embedded finance models are starting to mature, the authors of this report still see significant growth potential across industries like health, real estate, and employment where plenty of white space remains. Read the full report here.

? BEFORE YOU GO…

• Metaverse: Yuga Labs launches the much-anticipated metaverse gaming platform Otherside in the Bored Ape Metaverse, inviting 4,300 “Voyagers” for a first-look tech demo.

• Metaverse: SocialFi metaverse project MCity has been launched to bring metaverse into life and vice versa. MCity was created to break down geographical barriers and bring people from all over the world closer together in a place where they can be anyone, go anywhere, and meet anyone.

• NFTs: Remooz Inc., a blockchain provider and NFT marketplace powered by Hyperledger Fabric, announced the soft launch of its MVP, the Remooz NFT marketplace platform.

• Crypto: Sri Lanka’s central bank issued a warning regarding the use of cryptocurrencies amid a devastating economic and political crisis.

?? THE LATEST ON COUCHONOMICS

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