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Morgan Stanley Call A Worldwide Property Slump

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http://orange.advfn.com/news_Morgan-Stanle...s_15931223.html

Morgan Stanley predicts global property slump amid rising interest rates

SINGAPORE (XFN-ASIA) - Rising global inflation and interest rates will
likely trigger a global property slump following the boom in recent years,
Morgan Stanley said.
The recent property boom was triggered by a prolonged period of low interest
rates globally, but this trend is reversing, with rates on the uptrend, it said.
"As inflation picks up simultaneously around the world, interest rates are
rising everywhere, and the property boom is turning into a bust," Morgan Stanley
economist Andy Xie said in a note.
"As the global economy is likely to experience rising inflation and cooling
demand,
all assets are likely to depreciate
," he said.
"Bonds began to decline first. Property, equity and commodities are
following.
"A soft landing for global property is possible but not assured. When
property in China and the US -- the growth engines of the global economy -- turn
down together, the
global economy could experience a recession
," Xie said.
Xie said property booms rarely have a soft landing, but that there is
confidence in the market that central banks will help achieve a soft landing.
"The seemingly soft landing in Australia and the US in the past two years
has lulled investors into believing that other markets will follow the same
pattern," Xie said.
"The difference is: these markets began to soften in a strong global
economy. The global economy has peaked out and could provide little support for
growth engines like China and the US when their property markets turn down," he
said.

Dr. Bubb may well be right in that the only assett that MAY be left standing is gold. China and the US (and OZ????) may weather the storm due to their sheer size but economies that depend on the economic engines of these 2 may not fare quite as well. Is that a medium term sell signal for the Euro and Sterling?

This is extremely bearish coming from a business that relies on a healthy stockmarket to pay commissions. At least they will do well on the sell side--for awhile. They are saying to get out of IR sensitive assets (not just stocks but houses and especially highly geared property such as BTLs) and to get out now. There are no guarantees of a soft landing.

I am not sure about anyone else, but I am becoming more bearish about IR sensitive assetts by the hour. :o

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Property prices will fall when people think they will fall.

For the last few years the consensus has been rising property asset prices.

This article is exactly the sort of view that will start to spread the rush to sell. As we get more investment advisors predicting the correction it will grow into a self-fulfilling prophecy.

We're on the way! :) But it's going to be very painful. :(

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Property prices will fall when people think they will fall.

For the last few years the consensus has been rising property asset prices.

This article is exactly the sort of view that will start to spread the rush to sell. As we get more investment advisors predicting the correction it will grow into a self-fulfilling prophecy.

We're on the way! :) But it's going to be very painful. :(

I think you under estimate how stupid, greedy and materialistic the people in the country have become in recent years. They have been told their houses are worth 3 times as much as they paid for it and they want that money. In this celebrity obesessed, must have now, champagne lifestyle on lemonade money (or borrowed money) culture we have I cant see massive falls happening (unfortunately)

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I think you under estimate how stupid, greedy and materialistic the people in the country have become in recent years. They have been told their houses are worth 3 times as much as they paid for it and they want that money. In this celebrity obesessed, must have now, champagne lifestyle on lemonade money (or borrowed money) culture we have I cant see massive falls happening (unfortunately)

If they want that money, they had better hurry up and STR.

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If they want that money, they had better hurry up and STR.

well that would be the sensible thing to do, but like I said they are stupid and want to believe the prices only ever go up. I have seen houses on the market where I live for over 6 months and they havent dropped their asking price

And the news about massive mortgage lending in May only adds fuel to this fantasy of ever increasing house prices

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well that would be the sensible thing to do, but like I said they are stupid and want to believe the prices only ever go up. I have seen houses on the market where I live for over 6 months and they havent dropped their asking price

And the news about massive mortgage lending in May only adds fuel to this fantasy of ever increasing house prices

Good, I think we're pretty much in agreement then. Those foolish enough not to get out will be hurt if they have heavy gearing, unsuitable loans etc.

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I think you under estimate how stupid, greedy and materialistic the people in the country have become in recent years. They have been told their houses are worth 3 times as much as they paid for it and they want that money. In this celebrity obesessed, must have now, champagne lifestyle on lemonade money (or borrowed money) culture we have I cant see massive falls happening (unfortunately)

Boo I think you are right in your analysis of how the debt culture has changed attitudes in the UK, but disagree with you on the falls. Markets tend to deliver not what people want, but what they deserve. And if you act like King Canute, the markets will guarantee that you get wet.

Edited by cocacolalight

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I cant see massive falls happening (unfortunately)

But that's what happens in a bubble - nobody can see it happening, otherwise everybody would be bears, but nobody thinks it will happen. So they pull out all the stops, till it becomes so rediculous they have to admit it themselves. I think it's a bit like the boy who cried wolf. By the time people get bored of listening to warnings, and they've all finally climbed on the bandwagon, then the trouble actually starts.

Edited by Bubble Pop Electric

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Motley Fool has a very bearish article on property - lots of people read them so it's definitely starting to get out there.

http://www.fool.co.uk/news/comment/2006/c0...ioowfeml0040012

Buckers

I'm still not convinced there will be the crash we want - maybe just rampant inflation to rid us of the debt. Mr Arsy at fool is a VI - he STRd ages ago. He's been saying the same thing for years.

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I'm still not convinced there will be the crash we want - maybe just rampant inflation to rid us of the debt.

Can you explain how is it exactly going to work out. Do you mean we are going to get massive pay rises without resulting them into high IRs.

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Andy Xie?

This prat has got it wrong before. This is what he was saying about a year ago:

"The financial sector may have become dependent on the trading profits from oil. As evidence accumulates over weakening demand and strong supply, I believe oil prices could collapse," Xie said.

Did oil prices collapse? Did they ****!

I suppose he might be right on property.................eventually.

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Can you explain how is it exactly going to work out. Do you mean we are going to get massive pay rises without resulting them into high IRs.

I'm no economist so don't shoot me, but I think in the 70s there was high inflation, high interest rates and high wage demands. I think that, initially, higher interest rates produce higher inflation as people start demanding higher wages. Interest rates keep rising until demand breaks.

Having said all that it will be interesting to see how wage demands pan out this time as we have Asian economies producing goods with cheaper labour. But then all economies need energy to do anything and that doesn't look like it's coming down anytime soon. Businesses will either shed the workforce to maintain profits or raise prices.

I think the economy will be in a deep funk if housing collapses. Can't imagine the government will want that - better to steal the money from peoples' savings through inflation.

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But that's what happens in a bubble - nobody can see it happening, otherwise everybody would be bears, but nobody thinks it will happen. So they pull out all the stops, till it becomes so rediculous they have to admit it themselves. I think it's a bit like the boy who cried wolf. By the time people get bored of listening to warnings, and they've all finally climbed on the bandwagon, then the trouble actually starts.

I understand what you are saying, but this got ridiculous (multiples of salary to mortgage) at least 2 years ago and hasnt shown signs of stopping. There really does seem no end to the "greed is good i want to be a blinged up perma tanned footballers wife" mentality in this country

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  • 338 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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