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U K House Price Inflation Now Leads The Entire World

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http://uk.biz.yahoo.com/03092007/35/uk-hou...eads-world.html

Comment & Analysis

Monday September 3, 05:03 PM
UK Housing Boom Leads The World
Market Comment
[ September 3, 2007 ]
By Cliff "Clifford" D'Arcy
Unless you're a hermit living in a cave deep in the mountains, you'll have heard about the UK housing boom which has lasted more than a decade. (Even if you do live in an isolated cave, you've probably had a visit from a local estate agent, keen to market your home as an ‘eco-friendly, one-bedroom studio grotto with stunning views'!)
For the record, UK house prices have risen uninterrupted every year since 1996, according to Halifax, Britain's biggest mortgage lender. In fact, house prices have been rising strongly in almost all developed nations between 2001 and 2006, as confirmed by a new survey from Halifax. However, as you'll see from the table below, the UK has led the way, with only Spain pipping us at the post among the eleven eurozone countries:
International housing trends
UK house prices versus the eurozone, 2001 to 2006
Country
Increase (%)
Spain
100
UK
90
France
73
Ireland
71
Belgium
60
Luxembourg
58
Greece
56
eurozone
40
Netherlands
38
Finland
29
Portugal
7
Austria
6
Germany
-5
Sources: Halifax and European Central Bank
With the price of the average British home increasing by 90% in the past five years (a rate of almost 14% a year compounded), only Spain beats the UK among the eurozone countries, with prices doubling over this period. However, Spanish house prices have gone into something of a slump recently, so it's unlikely to hold onto the top spot for much longer.
Then again, while house prices are looking decidedly fragile in France and Ireland of late, UK property continues to hold its own, despite five interest-rate rises in a year. How much longer UK house prices will avoid ‘financial gravity' is anyone's guess!
Why have house prices fallen in Germany?
Uniquely in the eurozone, German house prices actually fell by a twentieth (5%) over the past five years. House-price falls, even over long periods, are a fairly common occurrence in Deutschland. Why is this?
..../
The UK takes
top honours
, as our house-price rises easily outstrip those of Australia, Canada and the US over one, two and five years. What's more, house prices are significantly higher in the UK, perhaps because space is at a premium over here, whereas the other three massive nations have huge areas of undeveloped land to expand into.

Why not Germany? probably less sheeple-like than the rest.

I agree with Clifford's conclusion though:

With house-price growth weakening in Spain, France and Ireland, and falling across the US, what's propping up UK house prices? Those with vested interests in property claim that historically low interest rates have created a ‘new paradigm' for UK housing. So, why haven't prices stalled as rates have climbed and borrowing has become more expensive over the past year?
Finally, although I've been pessimistic about UK house prices for some time, increasingly over the last two years, I'm now supremely confident that we're in for a few tough years to come. Just as Icarus flew too close to the sun and then crashed and burned, UK property has climbed too high and is riding for a nasty fall.
Please assume the crash position and brace yourselves for a rough landing!

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