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House Price Crash Forum


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Everything posted by i_godzuki

  1. Quite. What we know today is that the yen is relatively weak and the BOJ has a stated policy of normalising (i.e. raising) yen interest rates. All things being equal, that would suggest a strengthening of the yen as returns on it rise and the interest rate differential narrows. This morning I was speaking with a Japan economist and I asked him about currency swings. Interestingly he said that for all the talk of the carry trade, the yen-dollar rate has been remarkably stable of late when put in historical terms. That doesn't mean it will be in future.
  2. So you're saying because the yen weakened in the last three years, it will weaken again? But then yuo say Asian currencies look weak undervalued relative the dollar? Borrowing yen for a mortgage isn't investing in yen, it's borrowing yen to invest in pounds (in this case). If the yen appreciates, as could be reasonably expected given the current fundamentals, now isn't the time to take out a yen mortgage.
  3. The problem is that currencies can swing by A LOT. On top of that yen interest rates are rising and will continue to do so. The BOJ has made that clear. That could also cause yen strengthening. Why do you think folks pay money to hedge FX risk?
  4. So you ignore all the evidence in the article on the grounds that it's a paper civil servants might read? If the Guardian told you the Earth was flat would you doubt that too? Even before the programme was shown. Private Eye already mentioned details of the programme maker's history and asked what Channel 4 was doing.
  5. First, a disclaimer. I bought a house in Japan in July last year. Now, to this: Interest rates/weak economy: In the last quarter, Japan's economy grew at an annualised 5.5%. This was revised up from 4.8% yesterday. There are also signs (at long last) that the Japanese consumer is waking up and starting to spend. The next 0.25% rise is expected in Sept but some reckon it could come earlier. Demographics: Japan's natural population shed 4,000 in 2005 and probably a few more last year. However, Tokyo and other big metropolitan areas are, if anything, growing. Moreover, what immigration there is, which is rising, tends to be focused in these areas. Land prices: The REITs available on the LSE are likely to be (I haven't checked) focused in these big city areas and, more often than not, commercial property. Land prices are finally edging up after a 15 year slump. Risks: REITs have risen quite a lot already. I've no idea what the upside is. Buying individual properties is much more tricky as while the price of land rises, appartments fall in value as they age. I got my place to live in. In five years time, even with moderate rises in land prices, it'll still likely be only worth what I paid or a bit more. On the other hand, inflation is 0.1% (but will rise) and my mortgage payments are fixed long term. I think you were just a bit unlucky with the timing . If you bought in winter 2005, you'd just missed the big surge that autumn. During 2005 the Nikkei 225 went up about 40% but was pretty flat last year. I very lucky. Tired of getting 0.1% in my bank account, I put some money in Nikkei 225 funds that year and got much of the rise, which I used for my deposit.
  6. This is worth a read. Shows what a load of tosh the documentary was. Guardian story debunks the debunkment
  7. While the shipping point is very true given the Prius is currently made in Japan, China and possibly Kentucky, it's interesting to note that Toyota's plants are also much more C02 friendly than rivals. I found this on production C02 levels I can't find the figures for rivals, but I understand the US automakers (Ford, GM) are a long way behind. One reason is that their plants are simply less advanced. For instance, Honda and Toyota build multiple models on the same production lines, which saves bags of energy. Another is that U.S. businesses have been less energy efficient in general for much the same reasons their car buying public are. In terms of carbon footprint, I'd imagine the best thing to do would be to buy a UK built, small Japanese car.
  8. I'm not suggesting immigration isn't an important issue. It undoubtedly is, particularly if the major parties are unwilling to debate it. I just find it slightly uncomfortable how quickly some people blame hpi on immigration. As is pointed out on the previous page, 223,000 would be 0.4% of the population which is nowhere near the growth we've seen. Moreover, even if the real figure is far higher, I doubt many illegals buy property although the way things are going banks may soon decide to lend to them too. Also, slightly off topic, but looking at Iraq, I think it's hard to make a case that we in the west value lives that differently to Somali warlords. We just like to pretend we do.
  9. Isn't it a bit of a leap (or perhaps a convenient lie) to take one year's numbers and then say that "Every year..." Indeed, even the above shows that it was about 150,000 in 2003. Immigration may or may not need stemming for a variety of reasons. However, some might argue that nyone who thinks it's the prime driver of hpi thinks so either because it suits their politics or haven't the nous to grasp the more complicated economic arguments.
  10. It's like reasoning with Tony Blair. Obviously, bad debts have an impact on profits, but it's obvious that's not what's being argued in the report. As you know from my post, I'm not a bull. I appreciate you need to divert attention from the fact that once again you've been show to be full of hot air, but following one lie with another hardly helps matters.
  11. As I aclnowledge above, the report says bad debt is higher. However, the report does not cite that as the reason for the downgrade. I believe house prices are too high and will fall back in line with the long term trend, but I don't think it helps to stretch the truth. First, it weakens all the arguments made by the poster, even the valid ones. Second, it's irritating to open a link and realise that the title of the thread is misleading. Sorry if that sounds a bit pompous.
  12. Maybe I'm losing my mind, but where does it say that bad debt is the reason for the downgrade or falling share price? It does say bad debt has risen but doesn't say that's the reason. Can you cut the BS please?
  13. I reckon is early stuff is much better and he's gone off the boil lately. I'd recommend Kuranai no buta (Porco Rosso or Crimson Pig) and the Lupin one called Castle of Caglistro or something like thta.
  14. It's my view but I don't think things are quite so bad. Japan will gradually raise rates so the level fo cheap money will shrink. I was just out with a friend here who follows the markets. She said traders have been telling her the carry trade is overplayed. The problem is no one knows quite how big it is so their imagination runs wild, she said. I can't back this up with data, but it's an interesting point of view.
  15. I'm trying to check this but a small rise in rates could help spending. Many Japanese have huge savings getting next to nothing and minimal debt. Most (I think) pay off their credit card by direct debit every month. Presumably for them a rise in rates actually helps. Companies, meanwhile, are doing well enough to handle the rise --59% of companies said they approved the rise. Also, I think the Times got this one wrong. Last month, there was huge andn vocal public pressure. By contrast, this month the government remained pretty silent. Despite the rise, the Nikkei went above 18,000 for the first time in 7 years. Ah, just found this:
  16. For my job, I speak with analysts, economists and the BOJ. Of course, they could all be lying The only people I've read that really believe Japan are manipulating the yen are Detroit's ailing car makers who are desperately in need of some excuses. Even the grumpy Europeans at the G7 only blamed on it the superloose monetary policy (which Western govenrments advocated for in the first place, I believe). Still, no one can doubt exporters are benefiting from it and the government here welcomes it. The difference with the rises and falls of the yen, of course, is that its cyclical. Benefits to the U.S. from the dollar being the reserve currency are constant.
  17. Sorry, not much help here. Most stuff I found was expensive rented places aimed at expats. Before i bought I did some searching but didn't find much. However, if you go to the main bank pages (mizuho, MUFG and SMFG) you can see rates and so forth. One thing to bear in mind on that score is that the estate agent may have a 0.5% discount off the official rate. Japan's HPC, though, is fairly well documented. However, it's normally described in terms of the wider asset bubble. After all, stocks fell about 80% too. See here or try searching for Lost Decade etc.
  18. The estate agent was wrong to extent it wasn't illegal, but before the banks would never lend to you. It used to be very tough for women to get home loans too.Now, though, things have changed quite a bit. Shinsei Bank in particular, is very foreigner friendly and their site has a full English service. Weird on the tracker fund too. You can buy stocks etc online with no problems at all (i know unmarried foreigners people that have done this) . I think in the past it was more that banks couldn't be bothered to deal with foreigners or weren't good at managing credit risks rather than any laws. This is the bank website: for the mortgage stuff. You do have to live in the house, though.
  19. This is incorrect. Japan hasn't intervened in currency markets since 2003 and, if anything, right now they'd be more likely to intervene to strengthen yen if foreign pressure grew stronger or due to worries that the currency might rebound too sharply. They have low interest rates because they have very low inflation (0.1%) in much the same the UK has relatively high interest rates to tackle relatively high inflation and a strong pound. In the past, Japan may have manipulated the yen but it isn't doing so now. You can argue, though, that Japanese indviduals are already doing their own yen carry trade when they buy foreign investment trusts or currencies seeking higher yields. The numbers have grown very rapidly of late.
  20. You can. I'm a foreigner here. It is easy as I'm married to a local, but it's in my name. As far as I understand it,. there's no restrictions on foreigners buying property in Japan. Getting a BTL loan might be tough, though. Another bonus here is that there's a tax rebate on mortgage debt here. I have to go the tax office here to fin out, but I understand you pay 1% less tax on your earnings depending on the size of your home loan. However, while in the major areas of Tokyo, Nagoya and Osaka land prices are rising , it's very slow. On top of that, because the buildings (as opposed to the land) lose value quite quickly, long term calculations are complicated.
  21. Oddly, despite Japan's rate rise, the yen has weakened by 1.12 yen to 121.06 to the dollar. I guess the carrry trade will take a little llonger to unwind...
  22. PurpleMonkey, I bought a small house in Japan in June last year (before the first interest rate rise). It's just west of fairly central Tokyo, a 15 minute cycle ride from Shibuya. The land (50 sq meters) was two thirds of the total cost. The house will fall in value as it ages. In total, it's 90 sq metres. Regarding the costs, I put up 1/6 of the price plus all fees. The mortgage is fixed for 20 years at 3.2%. The total length, though, is 35 years because I wanted flexibility and the early repayment fees are minimal. I plan to pay it off in 20 years by investing and hoping to get a better average return on savings/investments than the 3.2% I'm paying on the debt. I'm paying I'm paying 215,000 yen a month towards the mortgage. I also have a parking space, which if I wanted could rent out for about 30,000 yen a month (In Tokyo you can't park on the street). Before moving, I lived 800 meters away in a five year old 49 sq meter appartment with no parking space. That cost 156,000 yen a month, plus a "13th" month every two years. Land prices went up slightly last year for the first time in 15 years. On balance, I think it makes sense for me to buy. However, the main reason is that I wanted some bigger to live, it was better value to buy and I could fix the rates for so long.
  23. Essentially, they're the same thing but Merv is correct to say "depreciate" as the pound can't be "devalued" as it's a floating currrency. This is from Wikipedia:
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