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The insanity of European property markets
- Thread starter Ghost of Cutten
- Start date
Quote from Ghost of Cutten:
This story is repeated across Europe - in Ireland, Greece, Italy, UK, Eastern Europe. Only Germany and Austria really have real estate at reasonable valuations, and they also have fairly robust economies right now (in relative terms at least).
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Not sure how reasonnable the valuations are but the property prices have increased abt 10% over the last year in France,and should reach 15% in Paris by year end, already above precrisis levels.
Plenty of links in french with recent data, here's one :
http://paris-ile-de-france-centre.f...bilier-flambe-a-nouveau-a-paris-66039695.html
How much of the actual home price does a buyer in France typically pay? (Assuming 100% means the home is purchased outright and 0% means zero deposit and 100% mortgage.)Quote from luisHK:
Not sure how reasonnable the valuations are but the property prices have increased abt 10% over the last year in France,and should reach 15% in Paris by year end, already above precrisis levels.
I'm not sure about this, but the mortgage conditions in France are considered strict compared to the US , more in line with Germany's, hence it's another country which was spared a property crisis- the number of transactions went down during the 2008-2009 crisis but the prices didn't move dramatically - overall , I remember reading about ultra high end properties in the Riviera beeing offered at a huge discount because foreign oligarchs weren't buying anymore.
I read in Germany it's not common to own a home. Only realtively wealthy people do. Most prefer to rent. Naturally, people who own a few appratment buildings don't borrow much and keep their finances healthy.Quote from luisHK:
the mortgage conditions in France are considered strict compared to the US , more in line with Germany's, hence it's another country which was spared a property crisis
2 things that may be helping this order of things are:
1) People are not keen on owning property whatever it costs because they may remember the experience of world war 2, not to mention some of the mortgage contracts in teh UK or the US are financial suicide;
2) There are strict regulations on raising rent or throwign out the tenants. So, tenats have strong legal support if they want to keep renting the same appartment. (Coincidentally, this hits all the overleveraged buy-to-rent owners big time.)
Property prices in Asia, including Australia, are also way too high and will likely collapse. But when? Throughout Asia, there are lots of people with money to invest. They are uncomfortable holding case because they see the competitive devaluation going on and they worry about eventual inflation. Gold is an option for the more adventurous who can live with the volatility that comes with a relatively small market. So the vast majority are either going into the stock market or into property. High net worth Asians are buying property all over the world not just in Asia and they together with the wealthy in the west are propping up property prices. If you are risk averse and you distrust currencies, then property is probably what you will be most comfortable with and this is what is keeping prices up in my opinion. And I expect prices to stay high until the current currency mess is sorted out and people are once again willing to hold cash.
Quote from Ghost of Cutten:
and the catalysts are drawing closer.
Nice to see you Ghost. I am very much in agreement with your European take. I think not only are the catalysts drawing closer, I also think that the crack of Europe will be THE catalyst that ushers in a period of widespread fear and possibly even panic.
These markets are still overextended and need a great deal more correction.
Quote from OddTrader:
Would you please point me to the source of the above data? Thanks!
i doubt you can get this type of stat as it is not constructive but 850k empty houses is number circulating in media. here is 1 quick example for sydney. 120K empty http://www.smh.com.au/articles/2008/05/26/1211653939197.html
regarding other part, there was article published recently some overpriced sales from builder to govt although there was no real demand. So it is more anecdotical evidence. If you search can find it on internet.