Houses remain overvalued in many countries where prices are
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House prices
You can't keep 'em down
Houses remain overvalued in many countries where prices are now rising
Apr 15th 2010 | From The Economist print edition
HOUSING markets continue to strengthen, as The Economist’s latest survey of global house prices shows. Our periodic round-up was dominated for nearly a year by countries where house prices were falling year-on-year. But the latest available data show that in half of the 20 countries whose markets we monitor, house prices are higher than they were twelve months earlier.
Since these indicators were last published at the end of 2009, house-price inflation has quickened in each of the seven countries where it was already positive. In Hong Kong, prices are more than a quarter above their level a year earlier. With the exception of Ireland, the pace of decline has slowed in countries where the market has yet to turn the corner. In America, two of the three measures we follow show that prices remain below their level a year earlier, but the Case-Shiller index of house prices in ten big cities was at the same level in January as it was a year earlier.
Singapore has gone from being one of the most depressed housing markets in the third quarter of 2009 to being the second-frothiest in the three months to March. This effervescence clearly worries its government, which has made it more difficult for buyers to delay mortgage payments and taken steps to deter speculative purchases. In Canada, another country where house prices are rising again, new rules announced in February make it more expensive to buy an investment property and reduce the amount that existing homeowners can borrow against their houses.
Should other countries consider similar steps? That depends in part on a judgment about whether prices have fallen far enough to erase the excesses of the bubble, or whether houses remain overvalued. One way to get at this is to compare the ratio of house prices to rents in a country to its long-run average, as our measure of fair value in housing does.
In Japan, Switzerland and Germany housing-to-rent ratios are below their long-run average. But even for America, one version of The Economist’s fair-value measure suggests that the correction in house prices may have gone far enough. Prices measured using the Case-Shiller national index have fallen enough to make houses there look underpriced. In the big American cities covered by the Case-Shiller ten-city index, the price-to-rent ratio is nearing its historic average. Houses in America are still overvalued by around 13% if prices are measured using the index maintained by the Federal Housing Finance Agency, but this excludes properties financed using subprime mortgages, many of which have been sold at very low prices, and so may understate the extent to which prices have been plummeting.
The story is different in Britain. British house prices had risen by nearly 10% in the year to the end of the first quarter of 2010, but the country’s price-to-rent ratio still outstrips its long-term average by nearly a third. This pattern—of prices rising in markets where houses still look overvalued—is also seen in Hong Kong, Singapore, Australia, Sweden and Canada. In France, Italy, Spain and Ireland, houses do appear overpriced relative to their earnings potential, but at least prices there are still falling.
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For those who are interested in such topics, I suggest they read Professor Joseph Stiglitz’s acclaimed, latest book FREEFALL: America, free markets and the sinking of the world economy.
Prof Joseph stiglitz is a renowned American economist and professor at Columbia University. He was the former Chief Economist at the World Bank (till 2001), a Nobel Prize winner in Economic Sciences and served in the Clinton Administration as chair of the President's Council of Economic Advisors.
This book gives you good ideas of the issues and problems regarding the greatest global recession since 1920 and a sense of future things to come.
I am flabbergasted that some people’s memory can be so short or can think that the great recession is over and everything is back to normal.
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With a forecast of the Consumer PRice index going to 4% this year, most peoples will be earning not enough for spending, and that bulk goes into house prices and taxes. Therefore if you do not get an increase of 4% and above of your total wage value, you will be losing ground unless you dun mind eating porridge and chai sim or maggie mee all day long.
Please do not read america author book too much, they are different from us both in social and economy aspect, today our MM read chinese books more than western books ya.
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And angel comes to kar chiao liao
U think small-fly Singapore is as big as the biggest economy in the world - the US?
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I think these asset bubbles are a result of waaaaay too cheap capital; low global interest rates for many countries coupled with some more stimulus money. All of this money's got to go somewhere worthwhile which leads to asset bubbles like this current housing bubble. If you set regulations to try to curb this rise in housing prices it'll simply create another asset bubble elsewhere.
The root of the problem i think is too much money circulating in the economy - government's misguided attempt at avoiding recessions at all costs
People seriously need to start questioning and challenge the Keynesian economics so many countries are dependent upon! I dont think its the way to global prosperity in the long run
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Originally posted by angel7030:
today our MM read chinese books more than western books ya.
How did you know about it -
I am sure everyone has heard of the sub-prime crisis by now? US banks handed mortgage loans to borrowers with no or poor credit worthiness. Banks later repackaged these risks thru securitization. The spread of such default risks by selling them off eg thru derivatives etc.
I think the root of the problem is systemic. Pure corporate greed and the expolitation of the consumers at all cost and the failure on the part of economists in believing that free market economy can self regulate or self correct.
The too much money in circulation is the aftermath and not the originator of the crisis.
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Originally posted by CheckmateA1:
How did you know about it
after losing billions to US of A banks and finanical insitution, do you think he is still reading US books??? He is reading Chinese, and he also like to read indian book, but because he cannot understand hindi and tamil, he gives up on it ya. -
Originally posted by 4sg:
I am sure everyone has heard of the sub-prime crisis by now? US banks handed mortgage loans to borrowers with no or poor credit worthiness. Banks later repackaged these risks thru securitization. The spread of such default risks by selling them off eg thru derivatives etc.
I think the root of the problem is systemic. Pure corporate greed and the expolitation of the consumers at all cost and the failure on the part of economists in believing that free market economy can self regulate or self correct.
The too much money in circulation is the aftermath and not the originator of the crisis.
I think its no coincidence that the rise in prices occur a year after the massive worldwide stimulus packages and at the same time the world's 2 largest economies are massively printing money - US to monetize debt and China to peg with the dollar
Free markets aint the problem look at the areas that arent regulated - the eletronics industry, things just keep getting cheaper.
In fact market interference is the root of the problem - the Fed keeps lowering interest rates artificially to avoid a recession. And if u want more proof wait for the upcoming healthcare bill to take effect
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Originally posted by angel7030:
after losing billions to US of A banks and finanical insitution, do you think he is still reading US books??? He is reading Chinese, and he also like to read indian book, but because he cannot understand hindi and tamil, he gives up on it ya.
cos, MORE prc ARE GETTING RICHER AND RICHER ONLYEVERYTHING IS ABOUT MONEY THAT IT
MORE AND MORE AH MOH, ETC ARE VERY GOOD IN MANDARIN COS OF TRADE - MONEY
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Originally posted by 4sg:
I am sure everyone has heard of the sub-prime crisis by now? US banks handed mortgage loans to borrowers with no or poor credit worthiness. Banks later repackaged these risks thru securitization. The spread of such default risks by selling them off eg thru derivatives etc.
I think the root of the problem is systemic. Pure corporate greed and the expolitation of the consumers at all cost and the failure on the part of economists in believing that free market economy can self regulate or self correct.
The too much money in circulation is the aftermath and not the originator of the crisis.
Bear in mind, Singapore is not as free as a market as you think it is, and as far as subprime is concern, in Singapore context, the initial downpayment could have already settle the cost of building with some profit, just that the govt jacked it up so high, the rest on credit loan are just extra profit coming in, that is why they are not panic over it, if you dun pay your loan, no one is going to bankrupt, certainly not the banks.
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Originally posted by CheckmateA1:
cos, MORE prc ARE GETTING RICHER AND RICHER ONLYEVERYTHING IS ABOUT MONEY THAT IT
MORE AND MORE AH MOH, ETC ARE VERY GOOD IN MANDARIN COS OF TRADE - MONEY
Ya, look at ang mo in changi, just a few days staying there because of flight cancellation and most are out of money liao?? very poor indeed.
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cos more prc buying many variety of assets in US, Europe, Asia, etc
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haha,...they are also buying our assets, i use to see PRC rich guy in my Country Club, they are not very good in golf, but if you look beside them, stand 2 beautiful sexy Singapore escort gals, each in one arm, happily and merrily enjoying his time, and imagine our pathetic poor Singapore men are looking for PRC gals somewhere down the dark alley.
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Originally posted by ulquiorra87:
I think its no coincidence that the rise in prices occur a year after the massive worldwide stimulus packages and at the same time the world's 2 largest economies are massively printing money - US to monetize debt and China to peg with the dollar
Free markets aint the problem look at the areas that arent regulated - the eletronics industry, things just keep getting cheaper.
In fact market interference is the root of the problem - the Fed keeps lowering interest rates artificially to avoid a recession. And if u want more proof wait for the upcoming healthcare bill to take effect
"I think its no coincidence that the rise in prices occur a year after the massive worldwide stimulus packages and at the same time the world's 2 largest economies are massively printing money - US to monetize debt and China to peg with the dollar"You mean the rise in property price? Sure, I agreed with you on this. With so much of liquidity flouting around the world, it is a sure thing.
"Free markets aint the problem look at the areas that arent regulated - the eletronics industry, things just keep getting cheaper.
In fact market interference is the root of the problem - the Fed keeps lowering interest rates artificially to avoid a recession. And if u want more proof wait for the upcoming healthcare bill to take effect."Maybe the word I used 'market self regulating and self correcting' is unclear here. The correct words to use should be regulating the activities of the ‘too- big-to-fail’ banks to prevent them from exploiting consumers at all costs (in the US context). This is the cause of the crisis in the first place.
If by interest rate manupulation, you mean a govt’s monetary or fiscal policy to stimulate the economy, these have been debated again and again since the dawn of capitalism.
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Originally posted by angel7030:
With a forecast of the Consumer PRice index going to 4% this year, most peoples will be earning not enough for spending, and that bulk goes into house prices and taxes. Therefore if you do not get an increase of 4% and above of your total wage value, you will be losing ground unless you dun mind eating porridge and chai sim or maggie mee all day long.
Please do not read america author book too much, they are different from us both in social and economy aspect, today our MM read chinese books more than western books ya.
Please continue to eat your cockles somewhere else.....
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hope the next wave of downturn come faster than expected.
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If an ordinary person only required a house, I mean one as a shelter. Then does it matter if the houses sold by the builders are overvalued. That should be the worry of the rich who can afford plenty of houses which I dont know of what use.
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Originally posted by TooFree:
If an ordinary person only required a house, I mean one as a shelter. Then does it matter if the houses sold by the builders are overvalued. That should be the worry of the rich who can afford plenty of houses which I dont know of what use.
speculation! -
Angel must be a bimbo
She used her ass to talk
And used her smelly cunt to think
MM Lee read mandarin books?
How earth did she know what MM Lee is doing?
Please don't an Ass-Kisser, stop kissing MM Lee ass
For crying out loud, show some backbone will you
It plain to see you are carrying MM Lee balls
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Angel are feeling insecure?
Does it bother you if Singaporean man goes to dark alley? looking for PRC girls
Are you feeling jealous?
Can't take competition?
Sore loser?
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Of course. A lot of people view property as an additional investment, ironically. =X
When prices are extremely high, they just go in snatch and assume they can sell at a higher price.
If you had bought during recession and sold it now, probably you would have earn the profit, instead of buying now. -
Originally posted by Junyang700:
Of course. A lot of people view property as an additional investment, ironically. =X
When prices are extremely high, they just go in snatch and assume they can sell at a higher price.
If you had bought during recession and sold it now, probably you would have earn the profit, instead of buying now.You need luck for this, no luck is like hard though
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Originally posted by angel7030:
With a forecast of the Consumer PRice index going to 4% this year, most peoples will be earning not enough for spending, and that bulk goes into house prices and taxes. Therefore if you do not get an increase of 4% and above of your total wage value, you will be losing ground unless you dun mind eating porridge and chai sim or maggie mee all day long.
Please do not read america author book too much, they are different from us both in social and economy aspect, today our MM read chinese books more than western books ya.
With a forecast of the Consumer PRice index going to 4% this year, most peoples will be earning not enough for spending, and that bulk goes into house prices and taxes. Therefore if you do not get an increase of 4% and above of your total wage value, you will be losing ground unless you dun mind eating porridge and chai sim or maggie mee all day long.
Show me the source where you got this information/statistics.
Please do not read america author book too much, they are different from us both in social and economy aspect, today our MM read chinese books more than western books ya.
how you know. you saw it is it?
cos he is a Chinese!he cannot forget his roots.
he need to know China culture, history, morals value, etc in order to do business with them.
as a leader, he need to set good example.
in order to motivate people, students, etc whom hate Mandarin to master it.
so, that these groups of people, etc would had a foothold in China.
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Originally posted by angel7030:
With a forecast of the Consumer PRice index going to 4% this year, most peoples will be earning not enough for spending, and that bulk goes into house prices and taxes. Therefore if you do not get an increase of 4% and above of your total wage value, you will be losing ground unless you dun mind eating porridge and chai sim or maggie mee all day long.
Please do not read america author book too much, they are different from us both in social and economy aspect, today our MM read chinese books more than western books ya.
