"I am not saying the BOE are whiter than white, but when interest rates were left for political bribing it was much worse."

[Si1]

4 hours ago, adarmo said:

I'm inclined to agree that the Japan scenario is a likely one. 

Yes, but they demographic structure is much worse then ours... Currently at least

 

Iirc

[Calcutta]

4 hours ago, adarmo said:

I'm inclined to agree that the Japan scenario is a likely one. 

I had a little look at Japan and the lost decades, see what we had in store. Am I reading it right, did their house prices crash and then stay down?

[spyguy]

4 minutes ago, Calcutta said:

I had a little look at Japan and the lost decades, see what we had in store. Am I reading it right, did their house prices crash and then stay down?

By about 80%

[Si1]

37 minutes ago, spyguy said:

By about 80%

Way north of 90% in prime Tokyo I recall

[dugsbody]

1 hour ago, Calcutta said:

I had a little look at Japan and the lost decades, see what we had in store. Am I reading it right, did their house prices crash and then stay down?

And yet people live in tiny apartments in Tokyo. "Crash" is a relative term and I think people need to look into this a little deeper. 

[Si1]

3 minutes ago, dugsbody said:

And yet people live in tiny apartments in Tokyo. "Crash" is a relative term and I think people need to look into this a little deeper. 

It's an interesting subject. Japanese standard of living is pretty rubbish these days, I surmise this is due to their ongoing financial stagnation and depopulation esp of young demographics. I additionally suspect that houses are cheap but still unaffordable because so much wealth was wasted on boom valuations.

[adarmo]

26 minutes ago, Si1 said:

It's an interesting subject. Japanese standard of living is pretty rubbish these days, I surmise this is due to their ongoing financial stagnation and depopulation esp of young demographics. I additionally suspect that houses are cheap but still unaffordable because so much wealth was wasted on boom valuations.

Not so fast. Not so cheap

http://japanpropertycentral.com/2016/08/japans-new-apartment-price-to-income-ratios-reach-24-year-high/

One must stand back and appreciate the enormity of the property bubble they had, but they've never been cheap. All this without crazy immigration too. 

[Si1]

4 minutes ago, adarmo said:

Not so fast. Not so cheap

http://japanpropertycentral.com/2016/08/japans-new-apartment-price-to-income-ratios-reach-24-year-high/

One must stand back and appreciate the enormity of the property bubble they had, but they've never been cheap. All this without crazy immigration too. 

Is that because the prices are high or the incomes are low?

[dugsbody]

3 minutes ago, Si1 said:

Is that because the prices are high or the incomes are low?

Incomes are not low in Japan, and certainly not Tokyo. I've been tempted by roles out there before (and may still go in the future). Property in Tokyo is not cheap. I'm not sure why this myth persists on HPC.

[Habitationi Bulla]

3 minutes ago, dugsbody said:

Incomes are not low in Japan, and certainly not Tokyo. I've been tempted by roles out there before (and may still go in the future). Property in Tokyo is not cheap. I'm not sure why this myth persists on HPC.

With the amount of printing they've done out there its no surprise.

[adarmo]

Just now, dugsbody said:

Incomes are not low in Japan, and certainly not Tokyo. I've been tempted by roles out there before (and may still go in the future). Property in Tokyo is not cheap. I'm not sure why this myth persists on HPC.

It is true that property is now more affordable than during their boom, but still not cheap. To be fair to anyone who hasn't researched the numbers it is a common story in house price circles that in some areas of hyper super prime Tokyo prices fell by more than 90%. 

What is more interesting is that in the world of low interest rates and perennial stimulus, average property prices can maintain a level around 7-8 times average earnings and do so without the immigration pressures that Britain enjoys/endures. 

I'm struggling to find house building numbers. 

[adarmo]

5 minutes ago, Habitationi Bulla said:

With the amount of printing they've done out there its no surprise.

But the ratio of prices to incomes is as much of a surprise as the inability of said 'stimulus' to ignite inflation. 

[Habitationi Bulla]

1 minute ago, adarmo said:

But the ratio of prices to incomes is as much of a surprise as the inability of said 'stimulus' to ignite inflation. 

Said stimulus must have stopped property prices deflating further if approx 6 times salary is what it takes to buy one of their slave boxes.

Its probably Chinese buying vast swathes of new build flats thats boosting prices, same all over Asia, at one time Bangkok was cheap in Sukhumvit and central areas, but prices ave gone through the roof in 5 years due to Chinese hiding their money.

[Si1]

8 minutes ago, adarmo said:

It is true that property is now more affordable than during their boom, but still not cheap. To be fair to anyone who hasn't researched the numbers it is a common story in house price circles that in some areas of hyper super prime Tokyo prices fell by more than 90%. 

What is more interesting is that in the world of low interest rates and perennial stimulus, average property prices can maintain a level around 7-8 times average earnings and do so without the immigration pressures that Britain enjoys/endures. 

I'm struggling to find house building numbers. 

They've got much much higher population density than us, especially considering how much more mountainous they are too. I would think that's related.

[Si1]

11 minutes ago, adarmo said:

But the ratio of prices to incomes is as much of a surprise as the inability of said 'stimulus' to ignite inflation. 

Inability of stimulus is, again I understand, due to political inability to properly deregulate the economy. Industrial and agricultural regulation, vested interests/rentiers and subsidy, I seem to recall, make the EU look pretty tame.

 

(I'm with Carney when he says central banks can only do so much)

Edited August 7, 2017 by Si1

[adarmo]

8 minutes ago, Si1 said:

They've got much much higher population density than us, especially considering how much more mountainous they are too. I would think that's related.

And 7 million empty homes....

[adarmo]

7 minutes ago, Si1 said:

Inability of stimulus is, again I understand, due to political inability to properly deregulate the economy. Industrial and agricultural regulation, vested interests/rentiers and subsidy, I seem to recall, make the EU look pretty tame.

 

(I'm with Carney when he says central banks can only do so much)

Stimulus is akin to pushing on a string. You can pull (tighten) with immediate and proportionate effect. But to release the string and make it work the other way is tricky. You can't force people to borrow and spend. Tellingly the stimulus we've had inflicted/gifted has ended up with people borrowing cheap money to buy assets they hope with generate a yield or capital gain. BTL, stocks, bonds, even Private Equity is borrowing billions to buy companies previously too large for their remit. 

[adarmo]

20 minutes ago, Habitationi Bulla said:

Said stimulus must have stopped property prices deflating further if approx 6 times salary is what it takes to buy one of their slave boxes.

Its probably Chinese buying vast swathes of new build flats thats boosting prices, same all over Asia, at one time Bangkok was cheap in Sukhumvit and central areas, but prices ave gone through the roof in 5 years due to Chinese hiding their money.

Whats interesting to me is that the ratio has held as stable from the crash in the early 1980s to today. If the Chinese buyers were the explanation then they'd have had to be doing it a while. Japan has a notoriously restrictive immigration policy and is a fairly closed border country. Of course Chinese, and other foreign, investors will have an impact but I'm not so sure that explains the relationship of prices to incomes. For example the Chinese have crazy house price to income ratios. The highest in the world in fact. Who is investing there? Is it circular to suggest the Chinese are blowing bubbles in other markets, and their own? If that's the case then there's either something about the Chinese buying houses that causes prices to go crazy, or there's more to it than just Chinese investors if you see what I mean?

https://www.numbeo.com/property-investment/rankings.jsp

[Habitationi Bulla]

2 minutes ago, adarmo said:

Whats interesting to me is that the ratio has held as stable from the crash in the early 1980s to today. If the Chinese buyers were the explanation then they'd have had to be doing it a while. Japan has a notoriously restrictive immigration policy and is a fairly closed border country. Of course Chinese, and other foreign, investors will have an impact but I'm not so sure that explains the relationship of prices to incomes. For example the Chinese have crazy house price to income ratios. The highest in the world in fact. Who is investing there? Is it circular to suggest the Chinese are blowing bubbles in other markets, and their own? If that's the case then there's either something about the Chinese buying houses that causes prices to go crazy, or there's more to it than just Chinese investors if you see what I mean?

https://www.numbeo.com/property-investment/rankings.jsp

Maybe im wrong who knows, should have said Asian buyers as from what i've seen they love nothing more than to buy an apartment to leave it empty.

But there is no doubt that the Chinese with a population of 1.5bln and a sudden cash windfall from a country where the govt can quite easily take everything you've got would look to hide their money elsewhere. And as many would have made money in property stands to reason theyd want to continue with this "cant go wrong" investment.

According to this foreigners can buy both land and property in Japan, thought only we were so stupid -
http://www.realestate-tokyo.com/news/can-a-foreigner-buy-property-in-japan/

[Si1]

46 minutes ago, adarmo said:

And 7 million empty homes....

Wtf? Hoarded by oldies and Chinese? I'm lost on that one!

[Si1]

17 minutes ago, Habitationi Bulla said:

Maybe im wrong who knows, should have said Asian buyers as from what i've seen they love nothing more than to buy an apartment to leave it empty.

But there is no doubt that the Chinese with a population of 1.5bln and a sudden cash windfall from a country where the govt can quite easily take everything you've got would look to hide their money elsewhere. And as many would have made money in property stands to reason theyd want to continue with this "cant go wrong" investment.

According to this foreigners can buy both land and property in Japan, thought only we were so stupid -
http://www.realestate-tokyo.com/news/can-a-foreigner-buy-property-in-japan/

LVT!

[macca13]

1) Lie detector test once a year for all top public servants.

2) Ban all vested interests and second jobs.

That would scare away the corrupt scum we have now.. 95% would probably quit as MP's such is their dedication to the electorate and passion for the common good.. ?

[adarmo]

7 hours ago, Habitationi Bulla said:

Maybe im wrong who knows, should have said Asian buyers as from what i've seen they love nothing more than to buy an apartment to leave it empty.

But there is no doubt that the Chinese with a population of 1.5bln and a sudden cash windfall from a country where the govt can quite easily take everything you've got would look to hide their money elsewhere. And as many would have made money in property stands to reason theyd want to continue with this "cant go wrong" investment.

According to this foreigners can buy both land and property in Japan, thought only we were so stupid -
http://www.realestate-tokyo.com/news/can-a-foreigner-buy-property-in-japan/

I don't disagree, and especially on the thing about leaving places empty.... they have the view that property depreciates once people start living in it. 

You are correct that foreigners can buy property. Iirc it was the Americans buying up Tokyo that drove the start of the mania I  the late 70s

[adarmo]

7 hours ago, Si1 said:

Wtf? Hoarded by oldies and Chinese? I'm lost on that one!

Who knows. 

Perhaps they could do with some LVT themselves

[guest_northshore]

https://bankunderground.co.uk/2017/08/08/your-country-needs-funds-the-extraordinary-story-of-britains-early-efforts-to-finance-the-first-world-war/

"...War was an expensive business.

...And what funds were raised came from a woefully small group of financiers, companies and private individuals ... benefitting from surging war demand for their services.

...To hide the fact that the Bank was forced to step in, the bonds were classified as holdings of ‘Other Securities’ in the Bank of England’s balance sheet

...Britain threw overboard its centuries-long embrace of free market principles in several areas.

...ministers were pilloried for rewarding investors far too generously ... investors were cast as profiteers, idly collecting rents on War Loans while others toiled.

...the altered role of the Bank prompted creation of a Parliamentary commission to examine its functions, ultimately setting it on a path to nationalisation."