Friday, Jan 30, 2009
Dresdner House Price Bubbles Analysis
FT: Serial Bubbles
FT Alphaville show a chart-heavy synopsis of some Dresdner research, showing the house price bubbles versus stock market bubbles in the US, UK, and Japan. They end with an interesting chart showing the relative ratio of house prices to stock markets in all three territories since 1984. Conclusion: UK house prices at a 25 year high to the equity market!
Posted by hewligan @ 01:41 PM (553 views) Add Comment
5 Comments
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1. mountain goat said...
"..the UK, house prices are at a 25-year high relative to the equity market and in the US at a 15-year high.
All of which suggests, if you were — for some reason — deliberating whether to invest in equities or real-estate — equities might be your best bet, relatively speaking."
2. stillthinking said...
Fantastic post. The Japanese had a big double-bubble, but we have been swapping around for decades. Presumably that means equities and house prices should be in alignment, hence the advice, which must mean that housing prices are going to be completely wiped out.
3. cyril said...
@stillthinking - I think you are wishful thinking.
The data shows that equities and house prices are sometimes correlated and sometimes not correlated, which really proves nothing.
4. mark wadsworth said...
"equities might be your best bet"?
*pedant*
"better" not "best" - it's a comparative not a superlative.
*/pedant*
OK, so share prices are going to halve, that much we know, ergo house prices will fall to less than half to restore the equilibrium.
5. stillthinking said...
b*gger....