Meanwhile in China....

michaels

mwpt wrote: »

Pity we're not seeing this in London housing.

In prime central London office blocks are being converted into flats - that tells me something...

antrobus

padington wrote: »

How did you get to be so damn knowledgable ?

The internet. And books.:)

cells wrote: »

...Using housing as the example if the UK went to 400,000 homes built per year imo that would be a straight £60B boost to economic activity other thibgs would not suffer (eg we would not build less cars or ships or office buildings if we built more homes)...

Somebody would have to spend that £60 bn. If they spend it on building houses, they can't spend it on anything else. There is no magic money tree.

cells wrote: »

....Why are houses so expensive in Ireland (€195k euro average price) if there are so mant theu are having to knock them down?..

Doesn't change the fact that Ireland has a lot of vacant properties.

cells

antrobus wrote: »

Somebody would have to spend that £60 bn. If they spend it on building houses, they can't spend it on anything else. There is no magic money tree.

If I have £200,000 and have a house built, that £200,000 does not disappear it just goes from a credit on my bank account to a credit on someone else's bank account

That same £200,000 can then be used to build another house, and then another and another and another

Money is just a medium of pricing an exchange, money savings is just a pool of promises of exchange. Demand is what creates things.

antrobus wrote: »

Doesn't change the fact that Ireland has a lot of vacant properties.

the thing is we don't actually know that to be a fact, we only have a few BBC stories to go on and some often misunderstood info about "empty" homes

however.....we now know that

Ireland has fewer homes per capita than France and Germany.

House prices are more expensive in Ireland than homes in France and Germany and England (minus London) by a good margin


it is then hard to conclude that they overbuilt. How can something be so expensive 195k euro average price if there are so many empty ones that they are knocking them down to resell as rubble.

to me this strongly suggests that they did not overbuild nationally, that what you read on the internet to get so smart might be wrong/misleading/local issues/incorrect at times

Generali

cells wrote: »

If I have £200,000 and have a house built, that £200,000 does not disappear it just goes from a credit on my bank account to a credit on someone else's bank account

That same £200,000 can then be used to build another house, and then another and another and another

Money is just a medium of pricing an exchange, money savings is just a pool of promises of exchange. Demand is what creates things

the thing is we don't actually know that to be a fact, we only have a few BBC stories to go on and some often misunderstood info about "empty" homes

however.....we now know that

Ireland has fewer homes per capita than France and Germany.

House prices are more expensive in Ireland than homes in France and Germany and England (minus London) by a good margin


it is then hard to conclude that they overbuilt. How can something be so expensive 195k euro average price if there are so many empty ones that they are knocking them down to resell as rubble.

to me this strongly suggests that they did not overbuild nationally, that what you read on the internet to get so smart might be wrong/misleading/local issues/incorrect at times

If there was no bubble in the Irish housing market why are prices still 40% below nominal peak?

cells

mwpt wrote: »

Pity we're not seeing this in London housing.

exactly,

bubbles pretty much have to have a supply side which is fixed or can not expand much in a given time period to cause the bubble

therefore how can a bubble cause significant misallocated capital (overbuilding)?

---

also I would guess that most bad investment decisions (misallocated capital) are not decisions made on market prices but on bad guesses as to future needs (quantity moreso than price) or even just bad luck. So lets say a government wants to build a high speed rail line for £50B over 20 years it might think it a good idea as the alternative is congestion so bad that people have heat attacks before getting to work. It then invests that £50B but in 20 years time finds out that the line is only being used at 10% capacity as self drive taxis have solved the problem without the need for a £50B trainline

or take the example of the French nuclear build program. they overbuild about 15 reactors at a cost of maybe 50B euro in real terms. they did so from poor guesswork of what future demand would be (they actually thought they would need 100+ reactors and planned to build for that but they stopped at 60 when they should have really stopped at ~40-45). not really a price signal in sight more just bad guesswork

the titanic was a terrible misallocation of capital. bad luck, not a bad price signal

the moon landings. misallocated capital. no price signal involved

etc

cells

Generali wrote: »

If there was no bubble in the Irish housing market why are prices still 40% below nominal peak?

there was no bubble in house building, Ireland just played catchup imo


my guess as to why prices are 38% below peak is.....

1 prices are now going up rapidly (up ~17% over the last 12 months) and if that continues in 2-3 years time they will be at peak. mortgage rationing and a deeper recession probably played a part in a slower recovery but it looks like prices are catching up fast to the peak (and they are already more expensive than france or germany!)

2 prices for the peak month are set on relatively low volumes. If a single share in BP trades hands for £425 and the next share goes for £4.25 was there a 99% drop in BP share price? of course not, its why you will often look at the days average trade price or the months and not one single buy order price. property sales are lower volume and therefore imo its silly to look at a peak month and conclude that a set in stone value/price. It would be more wise to have a running average of maybe 2-3 years. What that would do is set the "real" peak price which would be lower than the single month max price

3 discount for second homes (a new home often has a premium. if its sold 5 years down the line the new premium is gone). This was a much bigger factor in Ireland as their homes are/were a lot newer than in say England. So when you go from building lots to not building many you have this drag prices down somewhat (how much I dont know)

cells

House prices in England and Wales (minus London) are still ~15% lower than their peak in 2007/8.

What does that mean? That England has an oversupply of homes and had a bubble and building boom and ghost estates?

cells

Generali wrote: »

If there was no bubble in the Irish housing market

this article is about 9 months old, prices are up 10-15% since then


Irish house prices less affordable than in UK, report warns


http://www.ft.com/cms/s/0/101b4310-4885-11e4-ad19-00144feab7de.html#axzz3ejN8eA00

House prices in Ireland are higher as a proportion of average incomes than in the UK, and well above their long-term average, a report on the sector warned on Tuesday.
Davys, a Dublin brokerage, said the dysfunctional dynamics of the Irish housing market meant that the ratio of house prices to income in Ireland was slightly above that of the UK, pushing the value of a property above historical Irish trends. Upward pressure on prices would continue as a supply shortage and a young population kept demand high.
The report is one of several studies of Irish housing market dynamics released this week. It is likely to increase the pressure on the government to act in the forthcoming budget and curb a mini-price boom as the market recovers from the worst price crash in its history. The average price of a house in Dublin has risen by up to 25 per cent in the past year, compared with a 5 per cent rise in the rest of the country.
Housing affordability




more at the link

antrobus

cells wrote: »

If I have £200,000 and have a house built, that £200,000 does not disappear it just goes from a credit on my bank account to a credit on someone else's bank account.

That same £200,000 can then be used to build another house, and then another and another and another....

You could equally well make the same argument about spending £200,000 on pot noodles.

cells wrote: »

...Money is just a medium of pricing an exchange, money savings is just a pool of promises of exchange. Demand is what creates things....

And yet we have a shortage of homes in the UK. The 'demand' for housing of which you speak isn't creating that many.:)

cells wrote: »

....the thing is we don't actually know that to be a fact, we only have a few BBC stories to go on and some often misunderstood info about "empty" homes...

Yes we do. We have statistics from the Irish National Institute of Regional and Spatial Analysis and the Irish Central Staistics Office.

cells wrote: »

...what you read on the internet to get so smart might be wrong/misleading/local issues/incorrect at times

Which is why I prefer basing my conclusions on actual data from verifiable sources as opposed to taking any notice of Some Random Guy Off The Internet.

antrobus

cells wrote: »

this article is about 9 months old, prices are up 10-15% since then...

Why cite an article that is "about 9 months old"? Doesn't it occur to you that some media outlet or other might have published some more recent update on house prices in Ireland?:)

Residential property prices in Ireland increased nationwide by 0.5% in May and are 13.8% higher than they were a year ago, but fall slightly in Dublin. The latest data from the Central Statistics Office also show that prices are still some 37.5% lower than at the peak of the market in 2007.

http://www.propertywire.com/news/europe/ireland-real-estate-prices-2015063010688.html

(30 June 2015, and so only 2 days out of date.:))