Sunday, Sep 23, 2007
Regular review of global HPs
The Economist: Houses built on sand
Choice quotes: 'America's housing boom was almost modest by global standards—which is worrying', 'the average “excess” increase in real house prices is 47%. ', 'dangerously loose lending standards fuelled America's housing boom and now the fallout from increasing defaults is exacerbating the bust.', 'If America's slump deepens, it might trigger a reassessment in Europe's property hotspots' etc etc. Enjoy!
Posted by financial planner @ 11:54 AM (1322 views) Add Comment
16 Comments
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1. Cheekie Charlie said...
The media have gone quite about Ireland, I wonder why.
2. paul said...
Has anyone noticed that David Smith has stopped allowing comments on his http://www.EconomicSuk.com site?
3. Gumbrell said...
Yes. I thought he had just blocked my postings because I had been winding him up about HPC, but this is universal eh? Well, the guys a joker.
4. su said...
Paul I'm getting confused with all these David Smiths. Is this one of the aforementioned David Smiths (economist or dork), or is this another one?
5. paul said...
Sorry su. It's the dork one.
Have a look at his site and readers' comments and you'll quickly notice that he is the very last property bull on earth, and really doesn't want to hear anything to shake his belief.
6. su said...
Faced with figures like these, how can anyone still believe that prices will continue to rise in UK? I find it so frustrating when friends still refuse to believe house prices are and will continue to come down. Maybe it's because, like Paul's David Smith, they don't want to believe it, cos they're all property owners!
7. sirgoogle said...
Talking about price drops in other countries - Just out of interest, although the bubble continues to inflate in The Netherlands, some properties in The Hague area have dropped. One from 1.4M to 995K in one year - and still on the market.
8. Drewster said...
This is a good article but it mostly looks backwards not forwards. On Ireland it says prices are justified because of high immigration and low interest rates. However that assumes both will continue, something which is uncertain at the best of times! If rates rise, growth slows, and immigrants head home (and if those three events occur they're likely to occur at the same time) then that would remove the drivers of Ireland's house price growth. Parallels for the UK too.
9. su said...
Gumbrell. I liked your comments on David's site. Very well argued! Maybe he finds you a threat?
10. paul said...
su, in my experience, most people understand that the current house price boom not sustainable - even those with really vested interests in keeping it going, however from my observations the people with the most unshakeable beliefs are not the young, but the old who having seen their personal wealth increase exponentially in recent years and really don't want to think it is a transitory phenomena, but should know better.
11. paul said...
David Smith finds me a threat too.
He banned my posts many many months ago. Ever since then, he appears to have convinced himself that every person who publicly goes against his wildly optimistic beliefs is actually me, under a pseudonym, and says as much on his blog.
12. su said...
"from my observations the people with the most unshakeable beliefs are not the young, but the old who having seen their personal wealth increase exponentially in recent years and really don't want to think it is a transitory phenomena"
Paul. Depending on your definition of old (fortyish?) and you've just described my friends who won't believe a HPC is happening.
I'd be interested in reading your comments on David's blog. Is it still available for reading, and if it is - do you have a link for it?
13. Gumbrell said...
Paul - so are you sure the two of us aren't banned from posting on his site then, but the sycophants are still allowed on? Could he have blocked individual URLs from comment access? I just find it strange that he woild have closed down his blog entirely.
Su - cheers
14. paul said...
Gumbrell, su.
My IP address has changed many, many times since I last posted there, and he deleted many of my older posts *retrospectively* (so he want back through my posts and got rid of them). He is not all that technologically aware either - after he insisted that I shouldn't keep contradicting him online, I continued debunking his ridiculous ideas so once he actually threatened to have my IP address "banned from posting on public websites".
The first time I clashed with him was when he contended that Mortgage Equity Withdrawal was generating massive amounts of wealth. I argued that that was impossible, because the people who withdraw money from the rising value of their properties, still had to pay it back to the bank. He argues that this was not the case because their property had gone up and up in value and that was pure gain. We argued for a while on this and then he got very irate. He has a bad habit of making personal attacks on his detractors as I noticed. Example:
Poster : "Mervyn King is not doing such a good job these days"
David Smith : "You think you could do a better job, do you? Huh, I bet you can't even organize your own mealtimes"
Poster: "Ermm, let's try and keep this objective and rational"
David Smith : "Well it's hardly objective calling Mervyn King incompetent, when you are no better"
Poster : " ........................ "
And so on.
I also mentioned that inflation figures were being fiddled in an attempt to deflate the public sector debt and he dismissed that as practically heretical. I also said that his contention that oil would drop to below $40 per barrel was ridiculous. For this insane idea, he banned me.
If you butter up to David Smith's worldview, he will see it as an affirmation that he can't be wrong. Trouble is that recently there's been very few people subscribing to that worldview and posting the complete opposite along the lines of "you're wrong again, David".
Which is almost certainly why he doesn't allow any of the pesky public to post any more.
15. su said...
Paul. Aah! Now I see why you called him a dork. Mind you, with all your different IP addresses I can understand why the poor guy got paranoid. I bet you crop up in his nightmares. If he gets to the stage where he's sectioned and committed to a psychiatric institution, I don't suggest you buy any grapes to take round to him.
16. European-bear said...
Couple of things about Ireland that maybe is not in the "model"
1. 15% of Irish house stock is unoccupied. That is the official findings in the census.
2. A huge proportion of the Irish GDP is based on construction (youv'e guessed it - building houses). As the housing market grinds to a halt, so will construction and well paid brickies will go back to Poland.....and demand will fall....