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Sugarlips

Moody's latest chart: the bubble countries..

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6 hours ago, Sugarlips said:

Im not familiar with the european countries housing markets but im quite surprised UK/Oz so low on the risk (except that this is Moodys so everythings awesome) ?

http://www.smh.com.au/business/property/which-bubble-ratings-agency-moodys-isnt-worried-about-australian-house-prices-20171220-h08aec.html

norways.JPG

Are you reading that charty the wrong way round ?

 

You're saying Ireland is more of a risk than the UK or Oz ?

 

No chance.

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20 minutes ago, Democorruptcy said:

It's based on the relationship between house prices and rents, so just shows how expensive our rents are.

 

Yes.  It assumes that house prices don't have fundamentals, but that rents must always be fully market driven (and thus sensible).

There is a certain logic in this, but it ignores really important factors such as government policy affecting rents (eg, the rent floor created by 'housing benefit').

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 'A few countries appear to have an elevated risk that high house prices could have a negative economic effect. France, the United States and the United Kingdom appear to be at particular risk given the recent high house price overvaluation and slow adjustment processes.'

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5 hours ago, dgul said:

Yes.  It assumes that house prices don't have fundamentals, but that rents must always be fully market driven (and thus sensible).

There is a certain logic in this, but it ignores really important factors such as government policy affecting rents (eg, the rent floor created by 'housing benefit').

I remember an article quoted on here a few years back suggesting rising rents preceded housing bubbles. The coalition obviously read it because they increased social rents towards market rates around the same time. 

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Moodys? The same amazing bunch of people who brought us the 2007 'AAA' rated mortgage CLOs/bonds?

Hahahahaha.

Does anyone take anything they say seriously anymore?

Edited by Errol

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15 minutes ago, Errol said:

Moodys? The same amazing bunch of people who brought us the 2007 'AAA' rated mortgage CLOs/bonds?

Hahahahaha.

Does anyone take anything they say seriously anymore?

+1

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I think that the graph may well be correct as a measure of housing bubbles - it's not implausible. 

In purely financial terms, if prices are high relative to the income stream, then that probably is a sign of an irrational bubble. 

However, I'm not convinced the UK housing market is irrational from a financial POV.

I think house prices are high in the UK in 2017 because that is government policy, not because of irrational market exuberance. 

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7 hours ago, Democorruptcy said:

It's based on the relationship between house prices and rents, so just shows how expensive our rents are.

 

But rents are cheap compared with buying prices no? Not that either are cheap, but many can rent places they could never buy.

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1 hour ago, Bsmf said:

But rents are cheap compared with buying prices no? Not that either are cheap, but many can rent places they could never buy.

I think some rents are cheap compared to buying prices, particularly larger houses. However I'm assuming this study is looking at average rents and maybe ours are high because cheaper social rents have been increased.

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Yet the Deloitte Property Index 2017 says: "The Deloitte Property Index study measures the affordability of homes in each country, using the number of years of pre-tax pay required to purchase a standard new-build home (70 m²). With a ratio of 5.3, Belgium is one of the countries where homes are the most affordable, along with Germany and the Netherlands. However, these statistics need to be put into perspective in view of the big difference between gross and net pay in Belgium as the result of relatively high taxes on earnings. The least affordable homes can be found in the Czech Republic (11 years of pre-tax pay) and the United Kingdom (10 years)." 

and

"The risk of a severe price correction in Belgium remains limited because the Belgian residential property market can count on good fundamentals. "

https://www2.deloitte.com/be/en/pages/real-estate/articles/be-deloitte-property-index-2017.html

Yet Moody's has Belgium as bubble number 2?

They can't both be right.

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Sweden must be the number 1 housing bubble. Swedish friends in Stockholm are obsessed by house prices and there has been year-on-year massive hpi, several decade mortgages and cheap credit.

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1 " The thinking goes that when rising home values fail to trigger a move into the rental market, it may be a sign that"

... WHO HAS SUGGESTIONS HOW TO COMPLETE THE SENTENCE.

 

They say:

2 "... households may have unrealistic expectations of further price appreciation"

because thats how everyone chooses whether to buy or rent where they live.?

 

3 "a common signal of a market bubble, the credit rating company says. "

#2 may go together with #3 but chicken and egg situation.

 

Quality in logic, thought or pretty much anything of value seems to be lacking.

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4 hours ago, Tempus said:

Yet the Deloitte Property Index 2017 says: "The Deloitte Property Index study measures the affordability of homes in each country, using the number of years of pre-tax pay required to purchase a standard new-build home (70 m²). With a ratio of 5.3, Belgium is one of the countries where homes are the most affordable, along with Germany and the Netherlands. However, these statistics need to be put into perspective in view of the big difference between gross and net pay in Belgium as the result of relatively high taxes on earnings. The least affordable homes can be found in the Czech Republic (11 years of pre-tax pay) and the United Kingdom (10 years)." 

and

"The risk of a severe price correction in Belgium remains limited because the Belgian residential property market can count on good fundamentals. "

https://www2.deloitte.com/be/en/pages/real-estate/articles/be-deloitte-property-index-2017.html

Yet Moody's has Belgium as bubble number 2?

They can't both be right.

 

4 hours ago, Rhaegal said:

Sweden must be the number 1 housing bubble. Swedish friends in Stockholm are obsessed by house prices and there has been year-on-year massive hpi, several decade mortgages and cheap credit.

Steve Keen picked both Norway and Belgium as soon-to-be zombies last year with Sweden included in passing as a dishonourable mention.

His Top Six turds were China, Canada, Australia, Switzerland, Belgium and Norway.

Be worthwhile updating this list for 2018, I think. ;)

 

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16 hours ago, zugzwang said:

 

Steve Keen picked both Norway and Belgium as soon-to-be zombies last year with Sweden included in passing as a dishonourable mention.

His Top Six turds were China, Canada, Australia, Switzerland, Belgium and Norway.

Be worthwhile updating this list for 2018, I think. ;)

 

Turds is definitely the best word! :-)

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  • 407 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% +
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      • Even
      • up 2.5%
      • up 5%



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