turning japanese i think i'm turning japanese i really think so

Ian_W

hughgallagher wrote:

But the starting point is quite a long time ago, so if the starting point in Japan was much lower than the UK then would that explain the greater rate of HPI ?

The starting point was Japan copping for 2 A bombs and losing a world war but then receiving huge aid from the yanks and becoming the very very first "Asian Tiger" with it's businesses like Nissan and Honda taking the world by storm from the 60's. The stock market increased by 100X in 35 yrs - that's doubling it's value 3 times a year EVERY single year.

Xbigman wrote:

The one conclusion we can draw from Japan is that like the UK, house prices were overvalued and other diverse factors combined to drive negative sentiment about housing into a price crash.

You draw that conclusion if you wish - but please exclude me from the "we" as I think it's a totally bizarre one! There was no mass house owning market before, why should you expect one afterwards? Particularly as the country has been in a total recession ever since!
Nothing to do with sentiment either - everything to do with economics both pre and post their stock market crash. Land prices were DOUBLING - TWICE EVERY year for 35yrs. Comparatively, the UK's price rises would have to be described as moderate!!! Now moderate isn't a word I'd normally use to describe UK HPI - but compared to Japan it is.

hughgallagher wrote:

So in other words there was a lot of irresponsible lending and borrowing. Pretty much what we have now ?

Spot on - but only if you subscribe to the view that someone speeding at 31mph on a busy high street in the middle of the day is as reckless as someone doing 120mph in the same circumstances. Both could result in tragedy but if you think they're equally likely to - then that's a fair comparison. However, if you apply even a modicum of common sense, you'll accept the risks are in a completely different league. I said in my first post that you sounded like a reporter - you're confirming by the minute! SHOCK, HORROR, irresponsible lending to blame - but please point me to the UK bank that will lend based on the future value of a property that is based on it's price doubling twice a year for the next 30 odd years?

There are many very good arguments to suggest that UK house prices are over-inflated and might well suffer a crash in the not too distant future - this ain't one of them IMO.

meanmachine_2

Ian_W wrote:

but please point me to the UK bank that will lend based on the future value of a property that is based on it's price doubling twice a year for the next 30 odd years?

No doubt this will come.

Already banks will lend on "expected future" income, or rather certain brokers will arrange a morgage on this basis. It's not such a great leap to your nightmare scenario.

Also, the whole basis of "affordability" is incredibly dodgy. A house is affordable on a particular date, but lord help you if interest rates rise - something entirely out of your control.

If that isn't a gamble based on an unknowable future scenario, I don't know what is.

Mason

devils_advocate wrote:

Mason

I'm very interested as to how you've managed to overcome the practical difficulties of buying in Japan - presumably you don't have a gaijin card - or is one of you Japanese? How did you open a bank account?

My wife has a Japanese passport. However, it is possible for "gaijin" to buy property in Japan but I would strongly advise getting a trusted Japanese lawyer or learn the language.