Monday, Jul 30, 2007
The credit rating agency says the combination of overvalued property and highly indebted consumers makes these economies especially vulnerable as central banks tighten interest rates around the world.
ft: Denmark, UK vulnerable to house prices fall
Denmark, Britain and New Zealand are the economies most vulnerable to a fall in house prices, says a report released on Monday by Fitch Ratings.
Posted by chris :-)) @ 12:06 AM (131 views) Add Comment
2 Comments
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1. sold 2 rent 1 said...
"The UK also has a buffer because of its high levels of household wealth. “Net wealth is the most comprehensive measure of household long-run solvency,” says the report."
But the wealth is mostly in property prices which is what will be falling.
It's like including tech-shares in 2000 into net wealth.
It is no good having most of your wealth in the asset class that will fall the most.
The report is too simple. Ireland and Spain should be higher up the list.
What about over supply in construction?
Lombard street Research (LSR) affordability index is still the best guide for house price directions
2. sold 2 rent 1 said...
"Despite its housing overvaluation, France is considered only the eighth most vulnerable country overall, because levels of household debt, leverage and interest payments are relatively low."
Looks like most of the debt taken on to buy French property is from foreigners MEWing back home.
It is a similar story with Spain too.
The UK homeowners MEWing to buy abroad will be punished both home and away