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From Economist... Hpc On Its Way


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#1 AC44

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Posted 03 May 2012 - 03:19 PM

http://www.economist...05/house-prices

Just copying the text:


STARTLING statistics alert. Albert Edwards of Societe Generale looks at housing affordability in terms of prices as a ratio to household income. The US now has lots of affordable cities on this basis (defined as a multiple of 3 or less); Australia has none. But the most remarkable finding is that

the UK's Bournemouth & Dorset region ranks with the US's Honolulu as the most unaffordable market outside the major metropolitan areas, with a median multiple of 8.7

Now I've been to both places and pleasant though it is, Bournemouth is not a rival to Hawaii as a honeymoon destination. And there are plenty of other bits of Britain (Stoke, Northampton) which don't strike me as hidey-holes for rich Europeans fleeing higher taxes but which have price-to-income ratios of more than 5. It really can't last; either incomes will have to inflate or prices will have to fall.


Cannot see any wage inflation in the near term..

#2 winkie

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Posted 03 May 2012 - 03:25 PM

http://www.economist.com/blogs/buttonwood/2012/05/house-prices

Just copying the text:


STARTLING statistics alert. Albert Edwards of Societe Generale looks at housing affordability in terms of prices as a ratio to household income. The US now has lots of affordable cities on this basis (defined as a multiple of 3 or less); Australia has none. But the most remarkable finding is that

the UK's Bournemouth & Dorset region ranks with the US's Honolulu as the most unaffordable market outside the major metropolitan areas, with a median multiple of 8.7

Now I've been to both places and pleasant though it is, Bournemouth is not a rival to Hawaii as a honeymoon destination. And there are plenty of other bits of Britain (Stoke, Northampton) which don't strike me as hidey-holes for rich Europeans fleeing higher taxes but which have price-to-income ratios of more than 5. It really can't last; either incomes will have to inflate or prices will have to fall.


Cannot see any wage inflation in the near term..




It might be that Sandbanks distorts the figures somewhat? ;)
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#3 Democorruptcy

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Posted 03 May 2012 - 03:26 PM

Are they trying to talk the market down in general because they want to buy the 525,000 garage at Knightsbridge?

Democorruptcy
If you say "Democorruptcy" quickly, it sounds a bit like "Democracy". In a "Democracy" people vote for politicians who represent their interests. In the UK's "Democorruptcy" people can only vote for expense fiddling thieving MPs who are in the hip pocket of big business and the finance sector.

Governbankment
A "Governbankment" is a Government that has no line between itself and banks. It diverts public money (our taxes) to private companies (banks). George Osborne's Help to Buy Bail Banks, will see our taxes go to bankers to cover their losses on mortgages that default. The UK's Governbankment will even pay bankers "reasonable repossession fees" on Help to Bail Bank mortgages that default.

The Funding for Lending Scheme (FLS) is stealing from savers to make them pay for crimes by bankers. Via lower interest on savings, all the bank fines for PPI, LIBOR, interest rates swaps, etc. are being paid by savers so that bankers can keep pocketing bonuses. 

"We need to make a really big change: from an economy built on debt to an economy built on savings" - David Camoron Jan 2009
"Printing money is the last resort of desperate governments when all other policies have failed" - George Osborne Jan 2009
- So what do Camoron & Osborne do? Print money and leave interest rates at 0.5% when inflation is over 5%

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#4 koala_bear

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Posted 03 May 2012 - 03:39 PM

http://www.economist...05/house-prices

Just copying the text:


STARTLING statistics alert. Albert Edwards of Societe Generale looks at housing affordability in terms of prices as a ratio to household income. The US now has lots of affordable cities on this basis (defined as a multiple of 3 or less); Australia has none.


Albert Edwards has the same track record as Capital Economics and Money week on HPs. I like the message but it ain't happened yet!

Any way another beartastic article in different news outlet, it all helps (even if only a small item).

#5 Lepista

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Posted 03 May 2012 - 03:46 PM

I blame that TV show, "How to haggle for a house", talking the market down like that - how dare they!
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Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible behaviour drift into behaviour akin to that of Cinderella at the ball. They know that overstaying the festivities...will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is a helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."

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#6 scottbeard

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Posted 03 May 2012 - 03:56 PM

The opposite view from Mervyn King: this from Robert Peston's blog today:

[King] does not believe that the rise in house prices here is nearly as dangerous or unsustainable as what happened in Spain, the Republic of Ireland and the US, because we did not experience the massive construction boom of those countries (their countries are filled with empty new houses; the UK does not have this glut).


And it's certainly true that we don't have the thousands of empty unsold houses they do, so if we do get a crash I imagine it won't be as big (although since their crashes were 40-50% off we could still have one of 20% say).
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#7 DontCareBear

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Posted 03 May 2012 - 04:11 PM

It might be that Sandbanks distorts the figures somewhat? ;)


Fair call - Sandbanks would show in Dorset, but not in Bournemouth. I have been expecting bigger falls than have materialised in the last few years.

Most parts of Bournemouth have stuck stubbornly high over the last few years, particularly 3 bed detached in places like Southbourne. Whilst a lot younger place than it used to be, close proximity to a lovely beach and a generally very pleasant local area (new forest / good shops, town centre, etc) does make it attractive, but I do very much agree on the high ratio from wages to living costs. I *hope* it changes very soon!

#8 Goat

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Posted 03 May 2012 - 04:12 PM

It might be that Sandbanks distorts the figures somewhat? ;)


Or more generally that the area is overpopulated with retirees hence comparatively low income/wealth ratios.
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#9 TheCountOfNowhere

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Posted 03 May 2012 - 04:22 PM

I blame that TV show, "How to haggle for a house", talking the market down like that - how dare they!


They were talking the market up from what I hear !!!! :lol:

#10 The Masked Tulip

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Posted 03 May 2012 - 04:25 PM

I think he is just using Bournemouth as an example of how ludicrous UK asking prices are in general?

For Bournemouth you can substitute loads of cities and towns in the UK. Hawaii or Bournemouth? I know where I would rather live.
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The people closest to you have been trying to tell you that you have made a difference. That you did change things for the better. The Universe is vast and we are so small. There is really only one thing that we can ever truly control - whether we are good or evil.


The political triumph of the American Right has been to advance relentlessly the economic interests of the country's richest people, while emphasising a swath of moral, social and foreign policy issues that motivate and certainly distract middle-class and poor voters.

#11 Bloo Loo

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Posted 03 May 2012 - 04:40 PM

The opposite view from Mervyn King: this from Robert Peston's blog today:



And it's certainly true that we don't have the thousands of empty unsold houses they do, so if we do get a crash I imagine it won't be as big (although since their crashes were 40-50% off we could still have one of 20% say).


that means that more disposable income is going back to banks, so whilst that might be good for the bank security asset values, it means we are just going to die, where these other countries can and will pay less to their workers, and their workers will be able to get housed.

Ours wont and the companies that pay them will get more uncompetitive.
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#12 winkie

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Posted 03 May 2012 - 04:40 PM

I think he is just using Bournemouth as an example of how ludicrous UK asking prices are in general?

For Bournemouth you can substitute loads of cities and towns in the UK. Hawaii or Bournemouth? I know where I would rather live.


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#13 Mr. Piddle

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Posted 03 May 2012 - 05:16 PM

http://www.economist...05/house-prices

Just copying the text:

the UK's Bournemouth & Dorset region ranks with the US's Honolulu as the most unaffordable market outside the major metropolitan areas, with a median multiple of 8.7

Now I've been to both places and pleasant though it is, Bournemouth is not a rival to Hawaii as a honeymoon destination. And there are plenty of other bits of Britain (Stoke, Northampton) which don't strike me as hidey-holes for rich Europeans fleeing higher taxes but which have price-to-income ratios of more than 5. It really can't last; either incomes will have to inflate or prices will have to fall.


Cannot see any wage inflation in the near term..


Tell me about it! Ive lived in Bournemouth all my life and cannot afford a thing. Neither can most who were too young to buy prior to 2000. From reading EA listings of whats up for sale they frequently sound like they are trying to attract buyers from other areas, such as London as they know full well that no-one who lives and works round here can afford these prices.

Ok so you go by the beach and through the gardens and Bournemouth looks lovely, anywhere else in the town is starting to become an over-crowded, over-built sh*t hole. Poverty is becoming rife (certainly is where I live) when once it was an average family area. Rented accomodation absolutely satuates most of the area.

There is no industry in bournemouth other than tourism where minimum wage is the norm. Surely you'd think that these prices cant be sustainable.

Edited by Mr. Piddle, 03 May 2012 - 05:17 PM.

Allegedly

#14 danlee74

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Posted 03 May 2012 - 05:19 PM

It might be that Sandbanks distorts the figures somewhat? ;)



Fair call - Sandbanks would show in Dorset, but not in Bournemouth.


Indeed ... I'm sure Sandbanks comes under Poole.


Or more generally that the area is overpopulated with retirees hence comparatively low income/wealth ratios.


Hmm, think there are many other places on the south coast like this, think Devon and Cornwall. The one (and only?) benefit to Bmth to other southern based Gods Waiting Rooms is the ease to which to get back onto motorways. In my opinion one of the main reasons for the extortionate prices here is the rich second homers from Laandaan who pop down for weekends/bank holidays, never considering that they are ruining local shops / pubs and the lives of the local population by their actions. How I wish for a multiple homes tax ...

I think he is just using Bournemouth as an example of how ludicrous UK asking prices are in general?

For Bournemouth you can substitute loads of cities and towns in the UK. Hawaii or Bournemouth? I know where I would rather live.


Indeed TMT ... maybe rather than looking at houses in Bmth I should look to Hawaii?! I could watch my beloved AFC Bournemouth on Cherries Player whilst sipping cocktails looking at bikini clad beauties. Actually not a bad plan ;) ...

#15 FIGGY

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Posted 03 May 2012 - 05:21 PM

Tell me about it! Ive lived in Bournemouth all my life and cannot afford a thing. Neither can most who were too young to buy prior to 2000. From reading EA listings of whats up for sale they frequently sound like they are trying to attract buyers from other areas, such as London as they know full well that no-one who lives and works round here can afford these prices.

Ok so you go by the beach and through the gardens and Bournemouth looks lovely, anywhere else in the town is starting to become an over-crowded, over-built sh*t hole. Poverty is becoming rife (certainly is where I live) when once it was an average family area. Rented accomodation absolutely satuates most of the area.

There is no industry in bournemouth other than tourism where minimum wage is the norm. Surely you'd think that these prices cant be sustainable.


Living somewhere very near to Bournemouth the above is bang on. Most of my friend earn very little, and if I had any job other than the one I do then it wouldnt be the best palce to live.

Having said that i know a few people who commute to the city every day from there. In rality ist the old people keeping it up, and people like my day who has a 3 bed house as a 2nd home that is empty all the time and my mum who lives int he Bahams and has an empty house nearby.




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