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No Crash In Netherlands

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Will this happen in the UK?

4 years of stagnation

Mortgage debt in the Netherlands is almost 200pc of disposable income. This is about double the estimated 100pc figure for Ireland. The Dutch banks have agreed tighter rules on lending following concerns that households are vulnerable to a fall in house prices or rising interest rates, the Dutch Finance Ministry said.

Banks will limit maximum repayments on variable mortgages to 30pc of disposable income, to ensure households can still afford their mortgages should interest rates rise, Finance Minister Gerrit Zalm said in a letter to parliament.

Guidelines

A spokesman for the Irish Financial Regulator said there were no specific repayment guidelines for Irish lenders. "We stress the need for lenders to assess total affordability for the customer. However, it is an issue we continue to monitor very closely."

Industry sources say Irish banks used an average affordability ratio of 40pc of the borrower's disposable income.

Household debt

Although Dutch house prices rose at less than half the speed of Irish ones - up 74pc since 1997, compared with Ireland's 180pc - household debt more than doubled. The fast-growing economy crashed in 2002 and, although house prices did not fall, consumer spending plunged as households stopped borrowing against the value of houses.

The economy is now showing signs of life and house prices have begun to pick up and the government is anxious not to see a repeat performance.

"Dutch households are taking on a lot of risk to finance their own home, even by international standards," Mr Zalm said.

Lenders agreed to better inform borrowers about the risks associated with taking out a mortgage worth more than 100pc of the value of the home - a popular product in the past. The government will consider legislating if the measures do not have the desired effect, the ministry said.

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There are already threads on this. My own feeling is interest

rates being held low and the existence of full tax relief on mortgage interest paid in Holland. Let's see how it goes as the ECB raises rates. Glad I sold up in Holland last year, anyway.

Great that they're putting some regulations on lending BTW,

or at least agreed standards of some sort. We could do with some

more of those here, ASAP.

Pent

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Cheap capital in la la land, low rates and the belief in persistent low rates regardless of whatever else happens. Maybe it will happen, but maybe only in compbination with a debt-fuelled depression.

http://www.cbs.nl/en-GB/menu/themas/macro-...005-12-05-f.htm

Good article.

I think the reason why their hasnt been a crash is because there hasnt been any increase in interest rates....

Until now.

I wonder who will wobble first the debted dutch or the inflated irish?

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Good article.

I think the reason why their hasnt been a crash is because there hasnt been any increase in interest rates....

Until now.

I wonder who will wobble first the debted dutch or the inflated irish?

Hi,

Ah! Holland. Amsterdam. Such a lovely place, so many fond memories.

Firstly, flip over to the Kadaster (Dutch land registry - there's no English Language available but you can follow the figures). There has been no calamatous crash. Prices have been gently falling since mid 2003 (a few percentage points at most). Now, have a look at the ECB central interest rate for the Euro zone, remembering that that dutch house prices started stagnating around 1999. What do you see? Just at the point that HPI started to level (1999-2000), interest rates then (mid 2000) fell from 5.5% to 3.0% (key Marginal lending rates) in three years. ????!!!???? So, could you imagine the equivalent in the UK? That is to say, BoE started to slash 1% a year off the interest rates for three more years until we got down to 1.5%. Even the most ardent, rabid bear would have to concede, their would be no way on hell's earth that house price crash would occur in those circumstances. Behind that, there have been some large localised falls, particulalry in Rotterdam although the capital town, Amsterdam, has fared well. This year, transactions have fallen yet again, although at the begining of last year, there were infact some modest (2% or so) recoveries in prices. It's patchy, localised, some falls, some rises, gentle declines with a broadly flat profile declining gently. Kadaster anticipate 2% growth or so for 2006.

Now the other side of the coin. Despite the near halving of interest rates at the point the Dutch property market started to stagnate, the Netherlands have just endured one of the deepest, longest lasting recessions in living memory. Over five years infact. Remember also that the Dutch economy was a star of ninetees, entering the house price stagnation from a point of trade surpluses, booming economy, balanced budgets and low debt levels. About five years on, the UK entered the similar market condition except with massive trade and government defecits, stagnating economy, rising unemployment, record bankruptcies, rising repocessions, a vulnerable currency (and a real prospect of interest rate rises), record oil prices, record debt levels - largest in the EU, bigger than the combined debts levels of many of the EU nations added together (??!!??).

The dutch have avoided out and out crash thanks to EU membership and dramatic interest rate cuts at the price of the deepest recession in living memory. They may get away with it still yet! Although, ECB rates are rising, house sales transactions have started to fall again and repocessions are on the increase. We will see. Their timing has been good so far but it is difficult to draw direct comparisions with the UK. We have entered a stagnation at a time of economic uncertainty in the world, rising energy costs and interest rates, record debts, defecits and economic faltering. The dutch timed their housing slump at a time that world (and EU) interest rates were near halving and the world economy boomed, they came from a position of economic strength when factors came to their aid to support.

Boomer

(Special thanks to Mark - my British-Dutch expat on the inside)

Edited by boom_and_bust

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There are already threads on this. My own feeling is interest

rates being held low and the existence of full tax relief on mortgage interest paid in Holland. Let's see how it goes as the ECB raises rates. Glad I sold up in Holland last year, anyway.

Great that they're putting some regulations on lending BTW,

or at least agreed standards of some sort. We could do with some

more of those here, ASAP.

Pent

Pent Vaer, I left Holland in 2003. From what I recall the payments colleagues who had bought houses did not seem too extreme given the tax benefits. Do you have any indicative prices and the net payments required to service the mortgage?

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"Mortgage debt in the Netherlands"

I’m not sure about this as I’m often popping over to the Nederland’s and you can still buy a small house by the sea for £50,000k and it’s still possible to get a return on BTL

Compared to the UK I’ll take the Nederland’s any day of the week.

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This thread backs up exactly why there will be no house price crash in the UK - house prices are perfectly sustainable at this price whilst IR remain low.

I'll repeat as often as necessary, that until IR rise substantially, there will be no price crash.

As far as anyone can predict, IRs are going to probably stay at 4.5% for anything upto 2 years ....... the only thing that can change this are unforeseen events, which by their nature are unlikely.

Anything, predictable has already been baked into the forecasts of IR's, CPI etc.

Get a grip bears and keep saving cos your in for a very, very long haul.

You really are grasping at straws, if your long predicted HPC is dependant on the US invading Iran !

:D

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This thread backs up exactly why there will be no house price crash in the UK - house prices are perfectly sustainable at this price whilst IR remain low.

I'll repeat as often as necessary, that until IR rise substantially, there will be no price crash.

As far as anyone can predict, IRs are going to probably stay at 4.5% for anything upto 2 years ....... the only thing that can change this are unforeseen events, which by their nature are unlikely.

Anything, predictable has already been baked into the forecasts of IR's, CPI etc.

Get a grip bears and keep saving cos your in for a very, very long haul.

You really are grasping at straws, if your long predicted HPC is dependant on the US invading Iran !

:D

Why does this thread back up no house price crash in the UK. Are you telling me that the only thing you picked up from this thread is low IR mean no crash??

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This thread backs up exactly why there will be no house price crash in the UK - house prices are perfectly sustainable at this price whilst IR remain low.

I'll repeat as often as necessary, that until IR rise substantially, there will be no price crash.

As far as anyone can predict, IRs are going to probably stay at 4.5% for anything upto 2 years ....... the only thing that can change this are unforeseen events, which by their nature are unlikely.

Anything, predictable has already been baked into the forecasts of IR's, CPI etc.

Get a grip bears and keep saving cos your in for a very, very long haul.

You really are grasping at straws, if your long predicted HPC is dependant on the US invading Iran !

:D

Ach, that's ok - I'm still saving my deposit. Thanks to my LL subsidising my living costs I'll have saved a 50k deposit by the end of 2007.

2 years is a long time for things to go pear shaped on a world wide scale. i'll sit tight and see what happens.

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This thread backs up exactly why there will be a house price crash in the UK - house prices are totally unsustainable at this price even whilst IR remain low.

I'll repeat as often as necessary, that even if IR dont rise substantially, there will be a massive price crash.

As far as anyone can predict, IRs are going to probably rise to their long term averages of 8% for anything upto 2 years ....... the only thing that can change this are unforeseen events, which by their nature are unlikely.

Anything, predictable has already been desperately seized on by the VIs to try and justify their ludicrous forecasts of IR's, CPI etc.

Get a grip bulls and keep subsidizing your tenants cos your in for a very, very long haul before you see prices at 2004 levels again.

You really are grasping at straws, if your long predicted resumption of the boom is dependant on the US not invading Iran !

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I'll repeat as often as necessary, that until IR rise substantially, there will be no price crash.

You may even be wrong there. IRs in New Zealand have been raised quite dramatically to 7.25% but prices still climb

"last month left the benchmark rate at 7.25 percent and said that there was no prospect of a rate cut until he saw "hard evidence of a sustained slowdown in domestic demand."

The median price paid for a house rose to 300,000 New Zealand dollars, or $202,170, from 295,000 dollars in December, matching a record reached in November, the institute said. From a year earlier, the prices rose 13 percent.

It took 38 days to sell a house, compared with 39 in January last year, the institute said. It took 27 days to sell a house in December."

http://www.iht.com/articles/2006/02/16/blo...g/sxnzhouse.php

Volume has slowed though.

"Sales fell 10 percent from a year earlier to 6,360, the lowest since December 2001, the Real Estate Institute of New Zealand said"

Edited by ILikeBigBoobs

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You may even be wrong there. IRs in New Zealand have been raised quite dramatically to 7.25% and prices have collapsed.

"last month left the benchmark rate at 7.25 percent and said that there was no prospect of a rate cut until he saw "hard evidence of a sustained slowdown in domestic demand." Whatever happens to the housing market, presumably.

The median price paid for a house rose to 300,000 New Zealand dollars, or $202,170, from 295,000 dollars in December, matching a record reached in November, the institute said. From a year earlier, the prices rose 13 percent. Analysis proves this is because only high-end house are still moving now, dragging the whole index upward till the high earners blow themselves up too, a phenomenon seen in the UK also.

http://www.iht.com/articles/2006/02/16/blo...g/sxnzhouse.php

Volume has slowed significantly - always a precursor to a full blown crash.

"Sales fell 10 percent from a year earlier to 6,360, the lowest since December 2001, the Real Estate Institute of New Zealand said, "we don't know what's going to happen, but it won't be pretty"

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You may even be wrong there. IRs in New Zealand have been raised quite dramatically to 7.25% and prices have collapsed.

Do you really believe that your childish makebelieve gives your bear case any credence whatsoever?

Why not counter the known facts in a mature and intelligent way and perhaps point out that raising interest rates can take many months, and even years, to filter through an economy?

Edited by ILikeBigBoobs

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Get a grip bears and keep saving cos your in for a very, very long haul.

I'm a bear, I own a house (with a mortgage). What long haul am I in for? What grip should I be getting? O, and by the way, do you have anything interesting to say?

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Dear ILikeBigD!cks, Do you really believe that your childish makebelieve gives your bull case any credence whatsoever?

Why not counter the known facts in a mature and intelligent way and perhaps point out that raising interest rates can take many months, and even years, to filter through an economy? And will lead to a complete collapse of the UK housing market, as has been witnessed last year in NZ, especially the south Island?

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My Dutch colleagues get some nice tax breaks (mortgage interest) as well as cheap mortgages.

Goes some way to eplaining why they (paid the same as me) are living in 5 bedroom houses and I am renting a 2-bed flat, even if the Netherlands is crowded & land expensive.

See this thread on the Dutch housing market (it also has links to an even older thread on the topic)

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Pent Vaer, I left Holland in 2003. From what I recall the payments colleagues who had bought houses did not seem too extreme given the tax benefits.

That's what I'm saying: it's affordable while IRs are low and the full tax deduction exists. I mean, someone on 50% income tax get's

their interest payments halved!

Pent

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  • 301 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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