Friday December 09, 2005

Global house prices : Hear that hissing sound?

thehousingbubble2.blogspot.com -> economist.com :

The air is slowly leaking from the global housing bubble. In most of the countries that The Economist tracks each quarter the pace at which house prices are climbing has slowed over the past year. An overwhelming majority of experts are still predicting a soft landing with no drop in prices. But property in many countries is so overvalued that even if prices do not fall, they could stagnate for up to a decade.

America's market has remained hot for longer than most, but even it now seems to be coming off the boil. Prices of new homes rose by only 1% in the year to October, down from 16% in early 2004. A glut of new building is forcing developers to cut prices.

In Britain and Australia, housing bubbles started to deflate in 2004. The downturn in the Australian market has now spread beyond Sydney, where prices are already at least 10% below their peak. House-price inflation has also eased in France, Spain, Italy and Ireland. However, Japan's 14-year slide in house prices may at last be nearing an end: prices in central Tokyo are now rising, although the national average is still slipping and is now 40% below its peak in 1991. Japan shows what can happen when home prices lose touch with reality.

See also :

1. The housing bubble has burst
2. Come short the housing market

(2005-12-09 07:22:56 SGT) [Biz] Permalink

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