drbubb

Welcome, Yellow Tip I do not expect a "steady rise" into 2015. Instead, I would expect a sizeable correction, followed by a rise.

Since this was posted, there has been talk of more "government action" in the way of putting more LAND on auction, and property shares and the Hang Seng index have fallen. So maybe the turn is arriving now. Here's my favorite bellwether / predictor for HK property prices: Henderson Land / HK:12 ... update A further drop below $50, dragging the MA's down with it, could provide a nice confirmation that the HK property market is turning down

Agents say the family home market has been far stronger than that for flats and apartments because of demand from "equity rich" professionals and, in central London, from wealthy foreigners. Smaller properties favoured by first-time buyers have been more badly hit by the mortgage funding drought with prices rising just eight per cent between the last quarter of 2009 and the end of last year. Peter Rollings of agents Marsh & Parsons said that family homes in Battersea were the single fastest rising property category in London last year. I don't buy it. You are too close to the center of the madness to see it properly. Incomes in London are not rising so fast, and indeed - may be set to fall off a cliff - as multiple cataclysms hit the UK economy in 2011 and beyond. The UK's bubble economy, built on finance, borrowing and bullcr@p, may be set to fall apart, as rates go on rising, seeking a breakpoint: UK- 10 year govt. rates ... update * : 12mos Having said that, I may start a thread soon on the Bull argument for UK property, to put the bull arguments to the test. == == *We are back at/near a possible "red box" moment: Mo. : H&N-index 7.01 178,646 7.02 181,951 1.85% 7.03 185,131 1.75% 7.04 189,260 2.23% 7.05 190,424 0.62% 7.06 191,764 0.70% 7.07 192,424 0.34% 7.08 192,490 0.03% 7.09 192,446 -0.02% 7.10 191,930 -0.27% 7.11 189,178 -1.43% 7.12 188,706 -0.25% 8.01 185,874 -1.50% 8.02 186,403 0.28% 8.03 184,865 -0.83% 8.04 184,753 -0.06% 8.05 180,033 -2.56% "red box" 8.06 177,090 -1.63% 8.07 173,878 -1.81% 8.08 170,031 -2.21% 8.09 167,574 -1.45% 8.10 163,515 -2.42% 8.11 160,645 -1.76% 8.12 155,742 -3.05% 9.01 155,159 -0.37% 9.02 153,477 -1.08% 9.03 154,006 0.34% 9.04 154,508 0.33% 9.05 157,442 1.90% 9.06 157,624 0.12% 9.07 159,778 1.37% 9.08 161,077 0.81% 9.09 163,335 1.40% 9.10 163,734 0.24% 9.11 164,191 0.28% 9.12 164,681 0.30% 10.01 164,497 -0.11% 10.02 163,659 -0.51% 10.03 166,164 1.53% 10.04 169,287 1.88% 10.05 169,183 -0.06% 10.06 168,253 -0.55% 10.07 168,839 0.35% 10.08 167,698 -0.68% 10.09 165,198 -1.49% 10.10 164,828 -0.22% 10.11 163,333 -0.91% 10.12 162,131 -0.74% 11.01 161,536 -0.37% "red box" coming ??

Agents say the family home market has been far stronger than that for flats and apartments because of demand from "equity rich" professionals and, in central London, from wealthy foreigners. Smaller properties favoured by first-time buyers have been more badly hit by the mortgage funding drought with prices rising just eight per cent between the last quarter of 2009 and the end of last year. Peter Rollings of agents Marsh & Parsons said that family homes in Battersea were the single fastest rising property category in London last year. I don't buy it. You are too close to the center of the madness to see it properly. Incomes in London are not rising so fast, and indeed - may be set to fall off a cliff - as multiple cataclysms hit the UK economy in 2011 and beyond. The UK's bubble economy, built on finance, borrowing and bullcr@p, may be set to fall apart, as rates go on rising, seeking a breakpoint: UK- 10 year govt. rates ... update * : 12mos Having said that, I may start a thread soon on the Bull argument for UK property, to put the bull arguments to the test. == == *We are back at/near a possible "red box" moment: Mo. : H&N-index 7.01 178,646 7.02 181,951 1.85% 7.03 185,131 1.75% 7.04 189,260 2.23% 7.05 190,424 0.62% 7.06 191,764 0.70% 7.07 192,424 0.34% 7.08 192,490 0.03% 7.09 192,446 -0.02% 7.10 191,930 -0.27% 7.11 189,178 -1.43% 7.12 188,706 -0.25% 8.01 185,874 -1.50% 8.02 186,403 0.28% 8.03 184,865 -0.83% 8.04 184,753 -0.06% 8.05 180,033 -2.56% "red box" 8.06 177,090 -1.63% 8.07 173,878 -1.81% 8.08 170,031 -2.21% 8.09 167,574 -1.45% 8.10 163,515 -2.42% 8.11 160,645 -1.76% 8.12 155,742 -3.05% 9.01 155,159 -0.37% 9.02 153,477 -1.08% 9.03 154,006 0.34% 9.04 154,508 0.33% 9.05 157,442 1.90% 9.06 157,624 0.12% 9.07 159,778 1.37% 9.08 161,077 0.81% 9.09 163,335 1.40% 9.10 163,734 0.24% 9.11 164,191 0.28% 9.12 164,681 0.30% 10.01 164,497 -0.11% 10.02 163,659 -0.51% 10.03 166,164 1.53% 10.04 169,287 1.88% 10.05 169,183 -0.06% 10.06 168,253 -0.55% 10.07 168,839 0.35% 10.08 167,698 -0.68% 10.09 165,198 -1.49% 10.10 164,828 -0.22% 10.11 163,333 -0.91% 10.12 162,131 -0.74% 11.01 161,536 -0.37% "red box" coming ??

Brown's golden rule: Do whatever you need to in order to bamboozle people and stay in office, no matter what damage it does to the economy. The UK's unelected Prime Minister was one of the worst in its history, after being its worst-ever chancellor. Let us not get angry, but simply acknowledge his superlatives: villainy and recklessness.

Agents say the family home market has been far stronger than that for flats and apartments because of demand from "equity rich" professionals and, in central London, from wealthy foreigners. Smaller properties favoured by first-time buyers have been more badly hit by the mortgage funding drought with prices rising just eight per cent between the last quarter of 2009 and the end of last year. Peter Rollings of agents Marsh & Parsons said that family homes in Battersea were the single fastest rising property category in London last year. I don't buy it. You are too close to the center of the madness to see it properly. Incomes in London are not rising so fast, and indeed - may be set to fall off a cliff - as multiple cataclysms hit the UK economy in 2011 and beyond. The UK's bubble economy, built on finance, borrowing and bullcr@p, may be set to fall apart, as rates go on rising, seeking a breakpoint: UK- 10 year govt. rates ... update * : 12mos Having said that, I may start a thread soon on the Bull argument for UK property, to put the bull arguments to the test. == == *We are back at/near a possible "red box" moment: Mo. : H&N-index 7.01 178,646 7.02 181,951 1.85% 7.03 185,131 1.75% 7.04 189,260 2.23% 7.05 190,424 0.62% 7.06 191,764 0.70% 7.07 192,424 0.34% 7.08 192,490 0.03% 7.09 192,446 -0.02% 7.10 191,930 -0.27% 7.11 189,178 -1.43% 7.12 188,706 -0.25% 8.01 185,874 -1.50% 8.02 186,403 0.28% 8.03 184,865 -0.83% 8.04 184,753 -0.06% 8.05 180,033 -2.56% "red box" 8.06 177,090 -1.63% 8.07 173,878 -1.81% 8.08 170,031 -2.21% 8.09 167,574 -1.45% 8.10 163,515 -2.42% 8.11 160,645 -1.76% 8.12 155,742 -3.05% 9.01 155,159 -0.37% 9.02 153,477 -1.08% 9.03 154,006 0.34% 9.04 154,508 0.33% 9.05 157,442 1.90% 9.06 157,624 0.12% 9.07 159,778 1.37% 9.08 161,077 0.81% 9.09 163,335 1.40% 9.10 163,734 0.24% 9.11 164,191 0.28% 9.12 164,681 0.30% 10.01 164,497 -0.11% 10.02 163,659 -0.51% 10.03 166,164 1.53% 10.04 169,287 1.88% 10.05 169,183 -0.06% 10.06 168,253 -0.55% 10.07 168,839 0.35% 10.08 167,698 -0.68% 10.09 165,198 -1.49% 10.10 164,828 -0.22% 10.11 163,333 -0.91% 10.12 162,131 -0.74% 11.01 161,536 -0.37% "red box" coming ??

This part is particularly good: I think there is a tendency in the gold bug community to be overly focused on "bankers and central banks" as the main culprit against gold when in fact it was mostly the mining operations and private moneyed hedge funds that were doing the majority of the short selling (albeit through the services of the BBs) and engaging in the gold carry trade. My gold bug friend's view stems (I believe) from a misunderstanding of the processes that were exposed, among many other places, in Blanchard's 2002 suit against Barrick and JP Morgan and described in this Motion to Dismiss. I am referencing this document only as one example that also contains a good description of the gold lending and short selling process, filed by the defendant, Barrick Gold Corp., nonetheless. Also, I am not passing moral judgment on past gold lending and short selling activities as I believe that in this case "morality" is not quite as obvious as most gold bugs think. I believe that it was "the system" that systematically held gold prisoner in the past. That gold would ultimately break free and cause massive systemic turmoil was never in question. Only the timing and the amount of turmoil was. As Another wrote in his first post, "Westerners should not be too upset with the CBs actions, they are buying you time!"

Maybe. But it might also be the TRAP of his life. If the Urban economy collapses with the arrival of Peak oil, then almost any dwelling in London might lose at least 90% of its value in the next decade or two. I have a hard tinme imagining how this will NOT happen. But forecasting such a drop now would make people think I am a lunatic. So I will not make that forecast (yet) and instead I will talk about a more coventional 30% or so

Wow. Fascinating ! I had no idea how much delusional thinking has taken root in the Uk Property market. Also, the interview was highly listenable, but the interviewer seems to have gotten "the wrong end of the stick" at every turn. Let me explain: 1/ Penny, the Junior Doctor who makes Pds.2,000 a month - that's less than Pds.25,000 a year, and she wants to buy a flat for... wait for it: Pds.210,000 - that's more than 8x income - a ridiculous multiple! And yet this passes without comment. And the interviewer seems to think that 10% down and a 90% Loan is somehow normal. I was amazed to hear than any bank would be willing to lend to her on a 90% LTV. And a 6% interest rate may seem high, but so is the risk for the bank. If the good Doctor gets pregnant (it happens!), then who is going to pay the mortgage? The state, I suppose. Penny quite sensibly, is waiting. If she really wanted to buy, maybe she should look at something less expensive, or putting in lower bids. Or maybe she should accept those dinner invitations from that attractive young doctor across the ward. Why do young single people think that the "flat of their dreams" should be affordable on a 10% deposit? 2/ The banks ARE profiteering. They are trying to rebuild their capital bases without taking on excessive risks. The tightness in lending should help to bring property prices down. The real shame in this is that savers are being robbed (not borrowers!) to rebuild the banks' capital. we heard nothing about this, and how savings rates are well below inflation. Now is a great time for new banks to start up in the UK. They can make loans at fat spreads, and be unencumbered by loss-making legacy loan portfolios. New mortgage bansk are what the government minister should be encouraging. That is the way to build a more competitive market. ... I could say more, but it might just irritate people. Funnily enough, a 30% or so slide in housing prices might create a mortgage market that looks more normal than the one of today. And that is one we will get, I reckon.

SELLER SIDE - Are the sellers making money? How long have they owned? And if you know, how old are they? Rising rates ought to be a factor in the market now: Where fixed rate loans exist, they are bound to be more expensive than in prior months

Auctions are not aggressively bid any longer, I believe

okay, here's my H&N Index : Mon.: Rt'move : London : Hometrack chg./ Na'wide H-oldSA HalifaxSA HalifaxNSA: H&Nindex : mom : DelusIdx D : : 222,410 : 408,248 : 155,100 - 0.3% / 162,763 = n/a = 162,435 161,498 : £162,131 :- 0.74% :137.2% : 2011 J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,602 = n/a = 164,173 161,470 : £161,536 :- 0.37% :138.1% : ===================================== mom: +0.32%: +1.23% : Est.DI: 138.1 % / : -0.39%: = n/a = :+1.07%: -0.02% : - 0.37%

What is next door? Maybe they know something, and want to sell in a hurry. The place may need some work, and you'd better get a fat discount to Fair MV to reflect that.

QUOTE (davehk @ Feb 4 2011, 02:37 PM) <{POST_SNAPBACK}> Here's that Caribbean Coast link again http://www.centadata.com/cci/estate_info_e.aspx?id=008500 Interesting to note the rents are skyrocketing here. For CC, a 1200 sq/ft up at around $18000 p/m. A landlords market it seems..... Pilots are getting more money, and people are moving to TC and CC from other, more expensive areas. We did manage to get $17,000 for a fully furnished 3BR about 2-3 years ago. Then rents fell back to $12 - 14,000 (briefly) in the financial crisis.

The 18 YEAR PROPERTY CYCLE - Next Peak: 2015-17 ? === QUOTE / Feb 4 2011 : davehk ===== Hi all, Kung Hei Fat Choi! I have followed with interest for some time now, the excellent information this site gives. A lot of us appreciate the time Dr Bubb in particular, takes to share his knowledge and expertise. I was hoping Dr Bubb and others could share some recent opinions on the state of the HK housing market . . . Where would you describe HK's current status on the cycle? Is it time to wait for a correction? Seems a long way off with cashed up citizens and record low interest rates. === End Quote ===== Hi Dave, Welcome and Thanks for starting this thread. I will give you a quick answer, and maybe a longer and more detailed response later. + I try to analyze property markets within an 18 year cycle, which I have described elsewhere on this thread, and also on YouTube. It basically consists of 14 years up, and 4 years down - though these time frames can "morph" somewhat depend on the general economy and longer cycles. + I think HK is on its way into a Long Cycle top, which I am expecting in the 2015-17 time frame. You will note that: 1997 (most recent peak) plus 18 years is 2015 and 2003 (most recent low) plus 14 years is 2017. From these two calculations come my expected peak. + Between now and 2015-17, theres is time for a decent correction, before a final "blowoff rally" into a peak around the time the Macau bridge may be finished, and when new MTR lines may be completed. These works may be give rise to excessive confidence and a final Long Cycle peak. (I am just guessing on this, but I would be monitoring how these projects effect confidence. + The "correction" that I am expecting might come from a jump in interest rates, as bond holders and others react to rising inflation, and force Central banks to lift interest rates. I think you will agree that a rise in HK mortgage rates to 2.5 - 3.0% (from present 1%) might bring at least a 10-15% correction in HK property prices. And it could be more than that, if rates go higher. + I would expect Caribbean Coast prices to track those of the HK market in general. You may have noticed that average prices in HK are running at something close to 46 times the Mass Market index, as released by Centaline. <img src="http://img18.imageshack.us/img18/5467/ccnov2009.jpg" border="0" class="linked-image" /> (I may post more later - but I shall be leaving for a trip of several days from tomorrow,)

Thanks. That's why I keep a record : http://tinyurl.com/GPC-data To read the market more accurately, you must dig beneath the spin (& lies?) Have anyone the superficial posters on HPC twigged this (-2.4%) yet? (i wonder)

It takes a bit of Digging. I am sure these barriers are intentional (protecting their "spin") From here: http://www.lloydsbankinggroup.com/media1/r...halifax_hpi.asp You can get to here: http://www.lloydsbankinggroup.com/media/ex...istoricdata.xls Results: (I have to open the XLS file on another computer) D : : 222,410 : 408,248 : 155,100 - 0.3% / 162,763 = n/a = 162,435 161,498 : £162,131 :- 0.74% :137.2% : 2011 J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,602 = n/a = 164,173 16X,XXX

Now banks want to support such delusional thinking by talking about "negative equity loans." Who ever came up with this concept, should be treated like the evil bankers who caused a crash 600-700 years ago. Part of their bodies were cut off and thrown into a sack with them, which was lined with rocks, sewn up, and then thrown into the sea. This should be done NOW before more irrepairable damage is done to the UK's financial system, since it would discourage banks from nmore innovations that encourage recklessness. But I doubt taht anything wikll be done until AFTER the inevitable crash. Many will then like to copy this old idea, but it will be too late.

A breakout in the 10 year Gilt rate might be good for Sterling... ... But it is hardly good for UK property

So-called Second Steppers - Many are Trapped already "the meek shall inherit the earth" - while the dumb-and-reckless get fried (from a Hailfax report): + "Second steppers" are people still living in their first home, looking to take the next step up on the ladder + 84% of Second Steppers expect a First Time Buyer to buy their home + 43% of Second Stepper haven't increased their savings since buying their first home + The average house price paid by a first time buyer has reduced by Pds.28,041 since the typical Second Steppers bought their first home Yet Denial reigns: + Only 13% of Second Steppers will reduce their asking price if they can't sell. More than a quarter are willing to rent out their home instead /more: http://www.lloydsbankinggroup.com/media/pd...ppersReport.pdf I reckon they will be broken "little rotten timbers" by continued house price falls

ON USING THE HPI DATA The data are valuable, provided you know how to use them. My advice is: IGNORE the seasonal adjustment. Focus on the actual raw data, and just be aware of the seasonality. Also: the NOISE and inefficiency is in actual prices. If you turn things around, and think this way, you can make consistently accurate forecast. Check my Property Diary and my track record, and I think you will find I have been doing rather well using the data (with some help from the Homebuilder stocks), since at least 2007.

The data are valuable, provided you know how to use them. My advice is: IGNORE the seasonal adjustment. Focus on the actual raw data, and just be aware of the seasonality. Also: the NOISE and inefficiency is in actual prices. If you turn things around, and think this way, you can make consistently accurate forecast. Check my Property Diary and my track record, and I think you will find I have been doing rather well using the data (with some help from the Homebuilder stocks), since at least 2007.

BDEV versus the "-0.1% spin" Haha. It is not so easy to short UK Builders here in HK, unfortunately. I see that the Builders shares are focussed on the REALITY of a near 1% drop, and continuation of "Crash Cruise speed", and meantime, the Motley Fools over on HPC are going for the spin. /see: http://www.housepricecrash.co.uk/forum/ind...158714&st=0 They are truly embarrassing foolish, when they lack "intelligent guidance". Soon, they will all be jumping into Buy as the big slide just begins. Is Realist Bear still a "bull", as per this post on Singing Pig ?: http://www.singingpig.co.uk/forums/thread/1139824.aspx

CRASH CRUISE SPEED CONTINUES - while Nationwide spins like mad: Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “The property market entered 2011 with a whimper rather than a bang, with house prices edging down slightly in January. Prices fell by 0.1% month-on-month, leaving prices 1.1% lower than January 2010. “January’s data does little to alter the picture of a sluggish market that has been evident since the summer. Indeed, the three month on three month measure of house prices, which is a better measure of the underlying trend, showed a fall of 0.5%, consistent with the gradual moderation in prices that has been in place since the summer of 2010." However, the actual Nationwide data shows: Dec.10 : £162,763 Jan. 11 : £161,602 ============== : - 0.71% That's -0.71% in the last month, continuing the recent fast-falling trend. Here are the H&N-index monthly moves since August: -0.68%, -1.49%, -0.02%, -0.91%, -0.74% (that's an average drop of: -0.77%, which is right near the mid-point of -0.5 to -1.0%, which I call "crash cruise speed." /more: http://www.nationwide.co.uk/hpi/historical/Jan_2011.pdf Why does anyone listen to these hard-spinning ciphers?

CRASH CRUISE SPEED CONTINUES - while Nationwide spins like mad: Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “The property market entered 2011 with a whimper rather than a bang, with house prices edging down slightly in January. Prices fell by 0.1% month-on-month, leaving prices 1.1% lower than January 2010. “January’s data does little to alter the picture of a sluggish market that has been evident since the summer. Indeed, the three month on three month measure of house prices, which is a better measure of the underlying trend, showed a fall of 0.5%, consistent with the gradual moderation in prices that has been in place since the summer of 2010." However, the actual Nationwide data shows: Dec.10 : £162,763 Jan. 11 : £161,602 ============== : - 0.71% That's -0.71% in the last month, continuing the recent fast-falling trend. Here are the H&N-index monthly moves since August: -0.68%, -1.49%, -0.02%, -0.91%, -0.74% (that's an average drop of: -0.77%, which is right near the mid-point of -0.5 to -1.0%, which I call "crash cruise speed." /more: http://www.nationwide.co.uk/hpi/historical/Jan_2011.pdf Why does anyone listen to these hard-spinning ciphers?