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Tired of Waiting

The Economist: Uk Houses 34% Overpriced

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Spain: 50.4% overvalued - and yet only 5 cajas failed the stress test <_<

Well spotted. New Euro-banking crisis soon?

Another interesting thing: USA has over-corrected already? Edit: on the "Case Shiller" data.

Edit: Another point: The Economist's table was 'fair value' in housing "is based on comparing the current ratio of house prices to rents with its long-term average." That means that since current rents are being propped up by current HB, then HPs are even more over-priced than those 34%.

Edited by Tired of Waiting

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Spain: 50.4% overvalued.

... but there's nothing to worry about, right?

After all, all the properties on Spanish banks' books are thoroughly marked-to-market.

And as only 5 cajas failed the stress test, we can rest assured that Spanish banks have virtually no exposure to dodgy sovereign bonds :rolleyes:

Edited by VoteWithYourFeet

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Interesting graph.

It's not all clear though. Because of the falls it looks like Japan could be a buy, but it seems prices will continue to fall.

good call on the Spain situation and the Cajas

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Interesting to compare with their similar table from 6 months ago, Dec 2009, below :

This chart and table are 6 months old, but I think it's still informative.

CFN682.gif

CFN683.gif

http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=2764524&story_id=15179388

Above data from article published Dec 30th 2009.

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Australia is clearly wrong, Bardon told me

It clearly highlights the whole globe is fcked and that its just a good old fashioned credit bubble blowoff peak caused by banks everywhere, Gordon was just the wrong man in the wrong place at the wrong time, The same actions carried out nearly everywhere to avoid it all imploding after the tech bubble only now its clearly 10 times worse, We'll never know but im pretty confident the tories would have taken identical measures on interest rates in 2003, the swiss and Germans didnt avoid property inflation because of interest rate policy, they avoided it due to a tax policy that heavily penalises property speculation and in the UK the tories and Labour are equally culpable over the last 30 years of making investment in property the only game in town through taxation policies and laws

Edited by Tamara De Lempicka

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Spain: 50.4% overvalued.

... but there's nothing to worry about, right?

After all, all the properties on Spanish banks' books are thoroughly marked-to-market.

And as only 5 cajas failed the stress test, we can rest assured that Spanish banks have virtually no exposure to dodgy sovereign bonds :rolleyes:

Santander are getting a lot of earnings from overseas acquisitions, especially Latin America!

Over the past 10 years, Banco Santader’s pre-tax profits have soared. Last year, it made profits past €12 billion. That left its one-time close rival BBVA ADR (NYSE: BBVA) in the dust.

It accomplished this through a decade-long, aggressive overseas expansion plan. Its charismatic chairman, Emilio Botin, led Santander into international success. Over three-quarters of its profits come from outside of Spain.

Santander’s head of Latin American operations, Francisco Luzon, believes the company is on the lookout for even more acquisitions there. He predicts the region’s banking system becoming “the best in the world.”

Luzon says that Latin America learned a lot from three or more decades of “financial crises, weak regulation and poor economic policies.” But in this latest round of global woes, it stood out as an island of “strong regulation and prudence.”

banking on Banco Santander

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I have my doubts about Japan too - prices have crashed, are still hugely expensive - I don't see a 30% increase coming any time soon.

Depends what the long means in long run price to rents average. Japan was overvalued by so much and for so long it has surely skewed that average into a meaningless number.

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Australia is clearly wrong, Bardon told me

It clearly highlights the whole globe is fcked and that its just a good old fashioned credit bubble blowoff peak caused by banks everywhere, Gordon was just the wrong man in the wrong place at the wrong time, The same actions carried out nearly everywhere to avoid it all imploding after the tech bubble only now its clearly 10 times worse, We'll never know but im pretty confident the tories would have taken identical measures on interest rates in 2003, the swiss and Germans didnt avoid property inflation because of interest rate policy, they avoided it due to a tax policy that heavily penalises property speculation and in the UK the tories and Labour are equally culpable over the last 30 years of making investment in property the only game in town through taxation policies and laws

I agree that we will never know what the Tories would have done if they were in power in these past 10 years.

But we know that Brown went out of his way in Dec 2003 to switch the inflation index from RPI to CPI, removing housing costs from the index, and... to make a long story shorter, kept BoE interest rates on average around 1% lower between 2004 and 2008. That threw more petrol on the fire. If mortgage rates reflected the same 1% difference, say 6%aa on average, instead of 5%aa, or 5% instead of 4%, that would have reduced the top limit of the sheeple's budget by around 20%. That is huge. It would have taken most of the sting out of the bubble.

Brown switched the indexes in Dec 2003 for no other reason than the General Election in May 2005. I am very very sure of that. He is a right lunatic b@stard who put his personal obsession of becoming PM above the long term national interest. Of course he convinced himself that he was doing the right thing, that "inflation was low" - as he keeps repeating in interviews, in the rare occasions he is (half) competently pressed - particularly after he fiddled with bl00dy index!!! Unbefeckinglivable...

Edited by Tired of Waiting

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How can Spain stil be 50% over-valued when they have had a crash and massive over-building nuts.

Good ole Economist.

I think the Economist may be right, and Spain may still fall by a third.

In the UK case, interesting to see that, compared to rents, we were 29% overpriced 6 months ago, and now we are 34% overpriced. It went in the wrong direction.

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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