Make Chiangmai Mail | your Homepage | Bookmark

Chiangmai 's First English Language Newspaper

Pattaya Blatt | Pattaya Mail | Pattaya Mail TV

 
Vol. XIII No.17 - Sunday August 24, 2014 - Saturday September 6, 2014


Home
News
Arts - Entertainment
Classical Connections
Life at 33 1/3
Ask Emma
AutoMania
Book Review
Bridge in Paradise
Business - Travel - Tourism
finance & Investing
Cartoons
Animal Welfare
Care for Dogs
Community Happenings
Doctor's Consultation
Dining Out & Recipes
Education
Features
Gardening
Life in Chiang Mai
Mail Bag
Mail Opinion
Money Matters
On the Grapevine
Photography
Quirky Pics
Social Scene
Sports
Daily Horoscope
About Us
Subscribe
Advertising Rates
Current Movies in
Chiangmai's Cinemas
Classifieds
Back Issues
Find out your Romantic Horoscope Now - Click Here!
Update by Natrakorn Paewsoongnern
 
 
 

Paul Gambles, Director MBMG Investment Advisory

 

Boom and Bust: Are housing markets back on the rollercoaster? Part 1

Sources: Australian Bureau of Statistics, Land Registry, FHFA, INSEE.

When it comes to investment, one obvious place to put money is in bricks and mortar. Despite the global financial crisis (GFC), house prices have continued to rise in some of the world’s largest economies. So much so that in mid-June the IMF warned of property bubbles in Australia, Belgium, Canada, New Zealand and to a lesser extent, France1. In fact, looking at figures from four major countries alone, there has been a sharp rise in housing markets in all but the struggling US.
Boomers: United Kingdom
Also in June, the Deputy Governor of the Bank of England, Sir Jon Cunliffe, raised concerns that there was a British tendency to buy houses as soon as people felt their income was increasing, or indeed felt there was a chance it would increase. This habit, he suggested, meant that supply could not keep up with demand. He was therefore worried that, as house prices surge, household debt could be set to rise yet again2.

Source: Office for National Statistics.

One tell-tale sign in the UK is the large increase in the number of people working in the real estate sector. Between Q1 and Q2 2013 alone, there was a 9.9% rise in the number of real estate workers3. This was not just a one-off either, nearly 100,000 more people now work in real estate than in March two years ago.
Whilst it’s true that, as reported by the UK press4, prices in London have increased significantly, the capital cannot take the entire blame for this trend. As the chart demonstrates, the two largest urban conglomerations outside London have also seen rises.
Boomers: Australia
Australia has been experiencing a house-price bubble for several years. Key economists, such as Steve Keen5, have long since been sounding the warning bells that a burst will come; and when it does it will be devastating. Over two years ago I suggested to CNBC that Australia’s huge credit bubble would at some point burst - possibly pricked by poor results in the Chinese economy, making the Australian dollar and perhaps the banks and property market drop in price6.

Source : ABS.

That hasn’t happened yet, as Chinese economic results have so far stood up over the last couple of years, but Australia’s heavy reliance on the Asian giant means the Sword of Damocles still hangs above its markets.

Source: Land Registry.

Looking solely at the property market, since the dip in 2008, Sydney area prices have increased by over 40%. However, Brisbane and Melbourne continued augmenting without experiencing anything close to a dip: over the last ten years the former’s house prices have increased by almost 53%; the latter’s by a huge 84%.
To be continued…

Footnotes:
1 http://www.lesechos.fr/monde/europe/0203561280927-le-fmi-craint-une-bulle-immobiliere-en-france-1012176.php
2 http://www.telegraph.co.uk/finance/bank-of-england/10931956/Jon-Cunliffe-UK-property-obsession-threatens-to-push-up-household-debt-pile.html
3 http://www.ft.com/intl/cms/s/0/866e87c0-1af0-11e3-a605-00144feab7de.html#axzz36Nx2bapT
4 http://www.bloomberg.com/news/2014-07-15/u-k-house-prices-rise-as-london-surge-hits-record-ons-says.html
5 http://www.debtdeflation.com/blogs/2014/04/08/a-sudden-conversion-of-property-bubble-doubts/
6 http://www.cnbc.com/id/47290031#.

Please Note: While every effort has been made to ensure that the information contained herein is correct, MBMG Group cannot be held responsible for any errors that may occur. The views of the contributors may not necessarily reflect the house view of MBMG Group. Views and opinions expressed herein may change with market conditions and should not be used in isolation.
MBMG Group is an advisory firm that assists expatriates and locals within the South East Asia Region with services ranging from Investment Advisory, Personal Advisory, Tax Advisory, Private Equity Services, Corporate Services, Insurance Services, Accounting & Auditing Services, Legal Services, Estate Planning and Property Solutions. For more information: Tel: +66 2665 2536; e-mail: [email protected]; Linkedin: MBMG Group; Twitter: @MBMGIntl; Facebook: /MBMGGroup

 


 
HEADLINES [click on headline to view story]

Boom and Bust: Are housing markets back on the rollercoaster? Part 1
 

Advertisement

 



Chiangmai Mail Publishing Co. Ltd.
209/5 Moo 6, T.Faham,
A.Muang, Chiang Mai 50000
Tel. 053 852 557, 081-302 0126 Fax. 053 260 738
e-mail: [email protected]
www.chiangmai-mail.com
Administration: [email protected]
Advertising: [email protected]
[email protected]
Subscription: [email protected]

Copyright © 2004 Chiangmai Mail. All rights reserved.
This material may not be published, broadcast, rewritten, or redistributed.