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The global housing boom (article, The Economist, subscription only)

  • 18-08-2005 3:44am
    #1
    nesf
    Registered Users, Registered Users 2 Posts: 27,644 ✭✭✭✭


    The Global Housing Boom, and what we can expect from the bubble bursting
    Extract wrote:
    NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000.…

    Fantastic article with great research done on what we can expect from a "property bubble burst" (a property bubble burst does not cause a sudden drop in price for houses but a drop in the rate of increase of prices. The effect of house prices increasing at a rate below inflation results in the real value of property dropping while the nominal rate still increases). Also, good reading for any of you who believe that it never will.

    This is from the June 2005 issue of the Economist if people want to read it without subscribing. Your local city library should have back issues of the Economist and if you wish you can look at it there. Personally, I'd just subscribe to The Economist, but then I like it as a magazine. So shamelessly capitalist ;)


Comments

  • #2
    soma
    Registered Users, Registered Users 2 Posts: 602 ✭✭✭soma


    It's an excellent article, and it definitely caused some waves when first published back in june e.g. The Irish Independent published an article rebuking the economist article and saying "there is no housing bubble here". [Is it just me or do the Independent newspapers group seem suspiciously eager to always massage the poperty market and overly eager to dismiss talk of a bubble or at least overpricing? Altho to be fair, the sunday independent did run a "10 reasons why not to panic over (having not bought) property" a few weeks back].

    However, a very large stick that the property bulls can beat the rest of us over the head with, is that the economist basically ran the same article in 2003... and nothing happened.


  • #3
    nesf
    Registered Users, Registered Users 2 Posts: 27,644 ✭✭✭✭nesf


    I do agree with you, the issue in my eyes is that there has been a slowdown in house price increases of late and quite simply there is a wall where house prices cannot go past.


    Also, the possibility of an interest rate hike is there. Not a strong one in the short term, but it's still there.


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