Sunday, August 14, 2011

Government under pressure to deflate house bubble

Thousands of Israelis protest soaring house prices

Surprised this hasn't been covered on this blog. Tens of thousands of Israelis have been protesting for several weeks against high house prices, leading to the government announcing measures to try to deflate the housing bubble, including a massive building project and increased property taxes. Hard to imagine Britishers demanding the same - we seem to be programmed to view high house prices as a good thing, even though it means we get yoked to ever-higher mortgage debts just to get a roof over our head.

Posted by little professor @ 10:39 AM (1716 views)
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18 thoughts on “Government under pressure to deflate house bubble

  • general congreve says:

    Perhaps if we invaded Ireland, pushed the indigenous population into some small pockets of land using our military superiority, co-opted most of the water and productive farmland, then framed the local population as terrorists for using guerilla tactics to resist the occupation, we could sequester enough land to undertake a massive building project to boost the supply of affordable housing.

    The most interesting bit about about reading articles on the Israeli protests was discovering they’ve actually got a Rothschild Boulevard in Tel Aviv.

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  • In the Democracy of the United Kingdom, similar demonstrations would be banned.

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  • in britain 2011,sufragettes would be banned and labelled a terrorist organisation not to be listened to or trusted

    UK has a great history of direct action which has shaped our future….I started to worry when the stop the war group were effectively given no air time on tv

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  • mark wadsworth says:

    LP, yes, those young Israelis rock!

    Gen C, what are you talking about? The undeveloped surface area of the UK is twice as big as the whole of the ROI.

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  • These Israeli protests are against commodity/food prices and stagnant wages as well as rents and house prices.

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  • In fact the protests are against neoliberalism in general: the decline in social housing and social services, the role of the banks in rising house prices and rents, privatisation, the attack on the unionised electicity provider, tax breaks for the wealthy, and the government’s prioritising of “security” rather than the economy.

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  • happy mondays says:

    All setting up nicely ! I am sure we will have some more major protest in the coming months, a few more riots…Wait when america kicks off, it’s probably like a tinderbox & well armed.You never know the working class, middle class english man might even grow some balls..

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  • ===========================================================================================
    .You never know the working class, middle class english man might even grow some balls
    =========================================================================================

    you’ll have to sew them back on first!

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  • It will get serious in the UK when the supply/demand imbalance in the rented sector pushes headline rental yields up to 8% or more..

    Do the maths – genuine FTBs have virtually disappeared now, the stats for FTBs are clearly dominated by people with past equity accumulation being counted second time around.

    It means there’s now a six figure number of additional rented properties needed every year. That’s a lot of inward investment into the BTL sector, which will only happen if capital values remain solid.

    If house prices are being seen to be in steady decline, no amount of rental yield will coax in new investment, while many existing players will look to exit.

    Thus rents soar, young people stay living with their parents to an even greater extent, demand for property for sale falls, along with prices; while at the same time both young people and their parents start demonstrating for cheaper homes.

    The government will probably get the message and bring in a range of measures to speed up the planning process..

    ,,so supply goes up as demand falls – result: HPC…

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  • happy mondays says:

    Yes taffee, your probably right, too much to lose, high mortgage & pension & job for life.. woo 😉

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  • uncle tom

    you can buy greek debt and get 26% yield!

    as prices fall btl will make no sense forcing geared btl investors out of the market and many forced sales…but its when this happens that
    things will get really bad….lenders will start offering 90-95% mortgages on deflated assets to ftb’s and the rental demand market will dry up as people prefer to buy than rent,forcing even more btl investors to sell and forcing prices down further

    then when interest rates rise,capitulation of the portfolio investor will begin

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  • happy mondays says:

    Sounds good taffee, can you put a time line on this? It’s been along time coming..But part of your sentence – “lenders will start offering 90-95% mortgages on deflated assets to ftb’s and the rental demand market will dry up as people prefer to buy than rent,forcing even more btl investors to sell and forcing prices down further”
    Will this not just pump up the prices again before they have bottomed out?

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  • happy mondays says:

    Sounds good taffee, can you put a time line on this? It’s been along time coming..But part of your sentence – “lenders will start offering 90-95% mortgages on deflated assets to ftb’s and the rental demand market will dry up as people prefer to buy than rent,forcing even more btl investors to sell and forcing prices down further”
    Will this not just pump up the prices again before they have bottomed out?

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  • 15. titaniccaptain

    Not another gardening terrorist!

    Is Monsanto handing out snitch rewards yet?

    All I am saying is give sodium flouride some time.

    We will then see what bed peace is all about.

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  • GC has a good point as Ireland is awash with enough useless land to build a million affordable homes, plus we could pack off all our surplus eaters and assorted bottom feeders to live over there and give their assorted benefits to the Irish government in order that they can use the income to pay off their governments assorted debts more easily.

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  • happy mondays

    no…because prices are falling because of restrained credit,so unless wages rise dramatically ftbs will just soak up demand as prices fall,but won’t prevent further falls as the buy to let investor is geared and screwed multiple times as prices fall

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  • general congreve says:

    @4 – Yes, I’m aware we have enough land if only those toffs would release some of it for development, perhaps a Land Value Tax would help in that respect? What do you think? 😉

    My point is that the Israeli government could well use this as an excuse for more colonial expansion and ethnic cleansing, to fulfil their long term aims to create Eretz (Greater) Israel. May the day the US goes broke and the free US Taxpayer money stops flowing to the Israeli criminal cabal, be upon us soon.

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  • 18. general congreve

    ~ Well said.

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