House prices fall 0.1% as economists fear sharp downturn

Graham_Devon

....In China.

What was interesting about this story is the following:

In April, the Chinese government introduced a series of new regulatory restrictions on the housing market that sought to restrict speculative buying.
These included higher down-payments on house purchases, stricter lending rules for property developers, and limits on the ability of investors to buy more than one home.

Seem to have gone further than other countries, what with stricter lending rules for property developers and also limits on investors buying more than one home.

The limit caught my eye. An interesting way of pulling the plug on investors.

Theres also this:

Many economists, investors and policymakers - both inside and outside China - worry that Chinese real estate may be experiencing a bubble brought on by excessively low interest rates, which has fuelled speculators.

Which rings quite true if you look at our recent upturn in the housing market and excessively low interest rates.

Could we learn anything from China?

Full story here, which, when looked at on a very basic level....stimulus, excessively low interest rates, real estate up 11% in a year....and now the first fall on the back of new policy and the sharp unwinding of stimulus....all looks very much the same as here....though looks like they are a little further ahead.

chucky

Graham_Devon wrote: »

Could we learn anything from China?

Chinese?????

Really2

Graham_Devon wrote: »

Could we learn anything from China?

Hold it to a light, bone china is translucent.

StevieJ

Could be big trouble in little Australia as commodity imports dry up.

Really2

Here's the full story.
http://news.bbc.co.uk/1/hi/business/10596734.stm

It is hard to learn from china as I think the investment markets are different. China has seen massive development by property funds etc. because it is obviously a high growth area.
I think the comparison for the UK is a lot more "small time" TBH.

But one thing we could all learn from this is that the most densely populated developing/developed nations tend to have bubbles and high HPI.
But as we all get told on here that is rubbish and it is the government, banks and estate agents. I can now see a slight hole in that.;)

HAMISH_MCTAVISH

Graham_Devon wrote: »

Seem to have gone further than other countries, what with stricter lending rules for property developers and also limits on investors buying more than one home.


Full story here, which, when looked at on a very basic level....stimulus, excessively low interest rates, real estate up 11% in a year....and now the first fall on the back of new policy and the sharp unwinding of stimulus....all looks very much the same as here....though looks like they are a little further ahead.

Well with house prices in some areas of China at 88 times average local salary, one would think they're more than just a little bit ahead......

Graham_Devon

Apart from all the fluff thats already been said

The policies. These are policies we could implement at the drop of a hat, just like China has. Is it something that could be used to control an obvious problem here. Regardless of what people think HPI will or wont do, it's obviously a big problem when all the stops have to be pulled out to allow people to afford a home.

The chinese seem to be addressing their issues?

Could we learn from this? Is this something the UK could look at, such as the limiting investment homes, to try and take some steps towards the problems we currently have?

No one has even touched upon the stimulus issue in china, and how it's now being removed, something we will HAVE to face, even if we do ramp up QE again as some articles seem to be suggesting is the ever increasing option. So surely looking at another nation and how it effects them is a good place to start. They have had the same sort of increases in property since stimulus and low interest rates.

We can now start seeing a picture of how the removal of stimulus has an effect. Will be interesting to see how the picture draws out, especially if they put up their interest rates anytime soon. I'm not suggesting our economic policies are exactly the same, but I don't think anyone can say they are not similar in terms of what they have done (stumulus, low rates, increased HPI) and what they are now having to do.

purch

These are policies we could implement at the drop of a hat, just like China has

One slight difference.

We have a thing called Democracy over here.

Graham_Devon

purch wrote: »

One slight difference.

We have a thing called Democracy over here.

We do, kinda, I spose, not sure when it's actually been applied to anything

Anyway, we do, and if excercised in this situation, I would think the majority would be behind these sort of policies. As the majority are the ones struggling by. The majority are not investors buying up several homes.

How would our democracy actually stop such changes....apart from MP's standing to lose out of course.

I'm taking it that no one really wants to talk about these issues from the dancing around the point responses I'm getting?

Really2

Graham_Devon wrote: »

No one has even touched upon the stimulus issue in china, and how it's now being removed, something we will HAVE to face, even if we do ramp up QE again as some articles seem to be suggesting is the ever increasing option. So surely looking at another nation and how it effects them is a good place to start. They have had the same sort of increases in property since stimulus and low interest rates.

We can now start seeing a picture of how the removal of stimulus has an effect. Will be interesting to see how the picture draws out, especially if they put up their interest rates anytime soon. I'm not suggesting our economic policies are exactly the same, but I don't think anyone can say they are not similar in terms of what they have done (stumulus, low rates, increased HPI) and what they are now having to do.

What were property prices in china doing before the "stimulus"
Our economy is not like china's (they are manufacturing we are service), so not really seeing what parallels you can draw TBH.

chucky

Graham_Devon wrote: »

Anyway, we do, and if excercised in this situation, I would think the majority would be behind these sort of policies. As the majority are the ones struggling by. The majority are not investors buying up several homes.

that's not true.

if the majority of people are priced out or 'struggling by'; the price of property would be crashing all around the UK - i'm not talking 10%-20% drops btw