Tuesday, May 26, 2009
Begins?
Daily Mail: Housing bubble begins to burst across the globe
Anyone who is under the impression that Britain was alone in suffering a housing crash should think again. The global financial collapse has sent dozen of the world's property hot spots into deep freeze, research shows.
Latvia and Dubai have suffered the biggest housing crashes of any country worldwide, with values tumbling by a third over the last year following the implosion of speculative bubbles.
Singapore and the US follow in 3rd and 4th place, suffering declines of 23.8% and 16.9% respectively. Britain lies in fifth place with a 16.5% decline.
In contrast, prices in Israel and the Czech Republic have surged
Posted by little professor @ 12:06 AM (1879 views) Add Comment
20 Comments
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1. little professor said...
This is nonsense, at least as far as India is concerned, it is crashing badly. The middle class population in the larger cities were suckered into living in hastily constructed poor quality "apartments" after being told it was the way sophisticated Westerners lives in cities like New York. When you look at these places now they make the worst high-rise council estates in Manchester and Birmingham look posh.
2. quiet guy said...
Good post LP.
I think Northern Ireland deserves a mention here as well (35%):
http://www.belfasttelegraph.co.uk/business/business-news/house-prices-plunge-in-northern-ireland-14303061.html
3. Mungo Jerry said...
to little professor...
ive lived in many areas of britain and id have to say the council estates of london, leeds etc are probably the worst ive seen. any reason why you picked on manchester and birmingham?
4. wiltshire said...
Right then, I'm off to Israel to make some eeeeeasy money. I just hope Greenbay and Fergus Wilson haven't beaten me to it!!!
5. techieman said...
Quiet Guy - I thought NI was part of the UK?
6. sparky300 said...
Some areas of northern Ireland ar not dropping at all , especially new builds in ballymena , I have been watching prices for the past 2 years , there are still houses comming on at peak prices , I wonder what's going on ? Good houses in nice areas don't seem to be dropping very much at all
7. doomwatch said...
Gordon or the next puppet, has an answer to solving HP volatility in the UK
" ... and foreign investment is subject to government restrictions."
8. uncle tom said...
Taking price falls for a single year is not very informative
The fall in US house prices is now approaching it's third anniversary - prices there peaked (on average) in July '06.
They are now down on average a little over 30%.
In badly hit Detroit, prices are down nearly 40%, and after adjusting for inflation, are 10% down on their '91 levels.
UK house prices peaked 13 months after the US, and inflated 15% further, relative to prices in 2000. They have since contracted by 22%
My guess is that the US will now go into a period of more moderate price falls, leading to a modest over-correction and consolidation. Their problem with house price deflation will be effectively over by the end of the year.
The UK, meanwhile, has much worse to come..
9. inbreda said...
economy in trouble. Darling raises top tier income tax. rich people go to offshore tax havens. House prices in Jersey go up.
Thanks darling. Not content with screwing up your own country you have to make sure that locals in the channel islands can't afford to buy either. T0ssp0t
10. 51ck-6-51x said...
Correction to article's first sentence...
Anyone who is under the impression that Britain was alone in suffering a housing crash should think again.
->
Anyone who is under the impression that Britain was alone in suffering a housing crash should think.
11. 51ck-6-51x said...
sparky300 said... "there are still houses comming on at peak prices"
- sure, and it seems to be the same in many areas.
I think what is happening is that all offers being received by agents are Asking - x% (x will be dependent on area & property, etc... but always exists) and hence are advising most to just stick on the old asking price and wait for the offer they actually want (or 'feel the water' or 'see what they can achieve', etc...) What are houses selling for though? The only time an agent would not recommend this course of action is if the seller is totally desperate to get a quick sale, and even then the agent may well try to convince them to go for a higher asking price, at least for a while.
(Aside - if I were an agent I'd be going for low asking, open days and possibly even sealed bids to attempt to muster some competition amongst buyers.)
12. timmy t said...
666 - Your aside highlights the whole problem with EA's. If you were an agent and that was your strategy you would go bust quickly because vendors have their head in the sand so will use the agent that values it highest - regardless of how realistic that is. So you would have no houses to sell. EA's have to value houses on the high side to get the house onto their books, then reduce the vendors expectations to a realistic level in order to sell it. It's a f%&*ed up industry.
13. icarus said...
So house prices in Latvia increased by over 300% between 2004 and 2007 and have dropped only 36% in the year to the 1st quarter of 2009? So anybody who bought in 2004 is still laughing. I doubt whether people in Latvia paying mortgages see it this way..
btw - pity about Dubai - such tasteful developments.
14. japanese uncle said...
'Housing bubble begins to burst across the globe' is an accurate expression, in that we have not seen anything yet. HPC in economies with less reserves like Latvia and Dubai is more rapid and steep than, say in UK, but the ultimate destination will be more or less the same. '90% HPC in London' may sound shocking and outrageous, but any reasonably minded person should not find it so shocking that the price of one bed ex-council flat in Tuffnel Park is being 'readjusted' to 35K. Really shocking is the fact its price could have inflated up to 350K.
15. brickormortis said...
Dubai is about 45% in the last 6 months alone and in some areas as much as 50%. The 41% quoted on the BBC a few weeks ago is long out of date.
16. Greenshootsandleaves said...
666 at 11 is absolutely spot on! EAs are simply machine-gunning themselves in the foot. No one is suggesting, of course, that demand has dried up altogether (after all, people were still buying shares - at what they saw as 'bargain prices' - during the Wall St crash, it's just that there were fewer of them and they had to use their own money, what with banks reluctant to lend and all that), but such demand as there is is being curbed by these lame tactics, which serve only to waste time when time is if anything on the side of the buyer. If I were an EA I think I would try to ensure that a deal was struck at the earliest possible opportunity, knowing that earning a commission on a 'priced-to-sell' (now there's an interesting concept!) property would be preferable to watching that photograph in the agency window fade day by day or engaging in the umpteenth rewrite of the description (I tell you what. Let's put 'scope for extension' instead of 'potential for extension.' Good idea - that's what we had before we changed it last time!). Since the market will find its level sooner or later, regardless of the green shoots articles, the rose-tinted contact lenses, the questionable statistics and the dodgy forecasts based on those stats, and so forth, might it not as well be sooner?
17. 51ck-6-51x said...
timmy t - I don't think I would since a good EA would enter a dialogue with a prospective seller and not just say, "I value your house at x, do you want me to try to sell it?" They may use this dialogue to sell their service - i.e. "We'll sell your house at a better price and/or quicker than our competition because we do a, b & c."
So either such an EA does not exist (probably true in most areas) or that the seller ignores the dialogue and only pays attention to x (probably true in some areas).
18. rm96696 said...
The reporter writes "Israel has enjoyed a 10.9 percent surge in values over the last 12 months." Why is rampant house price inflation enjoyable?
19. quiet guy said...
@Techieman
"I thought NI was part of the UK?"
Yes, you're right. For some reason, I had the impression that the Halifax and Nationwide indexes didn't cover NI. Wrong! Perhaps I thought this because NI's HPC seems to have been extreme in comparison with the rest of the UK.
20. peeping tom said...
It's nice to see the phrase 'housing bubble' come into mainstream headlines, but if Latvia is in there why the feck isn't Ireland (the Republic that is, not NI)?