This is how Bloomberg in the words of the IMF says about the absence of a real estate bubble in China. Honestly, I do not state the opposite and do not subscribe to this thesis. Interesting argumentation. It seems to me, what we often forget, that there was no major housing bubble in the USA either, only regional excess..
tax code.
Lawmaking quality illustration, from idea to implementation. As well as an illustration of the level of development of public institutions. They got off the palm early. Retail sales are growing? Not only the external sector is available? That's good, вот и достаточно.
here's what happens, if you compare monthly changes in US and UK real estate value indices (case schiller vs. nationwide index). have to smooth over the British, to see something. both indices are seasonally adjusted. both in local currency.
in general, the British somehow do not really succeed in correcting))
Bob Schiller is much cleaner, prettier and clearer
Interest rates do influence house prices, but they cannot provide anything close to a complete explanation of the great housing market gyrations between 1996 and 2010. Over the long 1996-2006 boom, they cannot account for more than one-fifth of the rise in house prices. Their biggest predictive influence is during the 2000-2005 period, when long rates fell by almost 200 basis points. That can account for about 45% of the run-up in home values nationally during that half-decade span. However, if one is going to cherry-pick time periods, it also must be noted that falling real rates during the 2006-2008 price bust simply cannot account for the 10% decline in FHFA indexes those years.
There is no convincing evidence from the data that approval rates or down payment requirements can explain most or all of the movement in house prices either. The aggregate data on these variables show no trend increase in approval rates or trend decrease in down payment requirements during the long boom in prices from 1996-2006. However, the number of applications and actual borrowers did trend up over this period (and fall sharply during the bust), which raises the possibility that the nature of the marginal buyer was changing over time.
Carefully controlling for that requires better and different data, so our results need not be the final word on these two credit market traits.
This leaves us in the uncomfortable position of claiming that one plausible explanation for the house price boom and bust, the rise and fall of easy credit, cannot account for the majority of the price changes, without being able to offer a compelling alternative hypothesis. The work of Case and Shiller (2003) suggests that home buyers had wildly unrealistic expectations about future price appreciation during the boom. They report that 83 to 95 percent of purchasers in 2003 thought that prices would rise by an average of around 9 percent per year over the next decade. It is easy to imagine that such exuberance played a significant role in fueling the boom.
Yet, even if Case and Shiller are correct, and over-optimism was critical, this merely pushes the puzzle back a step. Why were buyers so overly optimistic about prices? Why did that optimism show up during the early years of the past decade and why did it show up in some markets but not others? Irrational expectations are clearly not exogenous, so what explains them? This seems like a pressing topic for future research.
Moreover, since we do not understand the process that creates and sustains irrational beliefs, we cannot be confident that a different interest rate policy wouldn’t have stopped the bubble at some earlier stage. It is certainly conceivable that a sharp rise in interest rates in 2004 would have let the air out of the bubble. But this is mere speculation that only highlights the need for further research focusing on the interplay between bubbles, beliefs and credit market conditions.
set A: people who are unable to pay the mortgage due to the return of economic conditions to reality. question: Is it fair to seize pledges from representatives of set A in a strict manner??
before answering this question, need to ask another.
set B: people who did not take out a mortgage foreseeing a change in economic conditions. question number 2: is it fair to help set A based on the presence of set B?
there are two options for an answer: 1) No, not fair due to the creation of the wrong economic incentives. & quot; non-seizure of pledges" encourages irresponsible economic behavior. 2) Yes, fair if the consequences of the withdrawal of collateral will have a negative impact on macroeconomic stability and affect both set A, and the set B.
therefore: * for the USA – rather yes, fairly. * for Ukraine – probably not, not fair.
based on the first you need to notice, what are the rules for % rates are derived mainly from the inflationary gap and the unemployment gap (differences between actual values and target values). estimated % rates are derived from "achieving full employment with minimal inflationary pressures". wherein, in fact, % rate has a lot more function (like monetary policy itself) – do not forget about the external sector, financial stability, etc..
also it should be noted, that the application of universal rules for the small open economy and the large open economy and the micro-open economy (for which an independent monetary policy exists only in the case of restrictions on the movement of capital – which already contradicts the idea of an open economy). that's why, before seeing the revealing evidence, it is worth remembering the limited conclusions;)
monetary policy: according to Taylor's rule and in fact:
Further: "Not high enough" and property prices
Further: "Not high enough" and real estate investments
now surprise: Real % real estate rates and prices
On the one side, it can be argued, what % US rates are setting the architecture of rates around the world, but find a link between the rise in prices in Ukraine and % US rates. Real estate boom in Ukraine – function of the underdevelopment of the financial market, underdevelopment of the real estate market and capital inflows in the banking sector. Capital inflows into our banking sector – it is a function of the rate of increase in raw material prices, which is a function of the growth rate of emerging markets. And the growth rate of emerging markets is leading to …. ouch, excess savings – decrease in long-term % rates in the US and spurring a boom in the real estate sector, which I already find due to securitization, many years of subsidizing the real estate market for the poor and euphoria that is transmitted across borders and restrictions on capital flows…
kaknal is often a good indicator of sentiment with the expectation of an `` opposing view ''. if the upcoming report is touted all day – expect bad)) (these are isolated cases, certainly. a couple of times you will notice, already come up with a trend)
but there are also reverse moments. recently (I occasionally glance) the thought that, that `` maybe we have a problem on the demand side?".
consensus – interesting thing. and the market consensus – this is x3))) street stubbornly awaits great results from the real estate market. and every time the same. ouch, Miss Expectation. ay-ay, sel-sel. market, certainly, efficient, but like this in the moment, just like yuan on monday. the devil's machinations are solid. whether the volatility of depletion, that's the beginning. I 'm afraid, that we won't get a plus today, but must, just have to.
. if you don't know, then the old model – this is the city around the factory. (). time to be flexible, how real it is probably no one knows, but everything starts now.
, according to figures from Century 21 China Real Estate. …. "Because of recent property policies that make buyers and even developers adopt a wait-and-see attitude, and as markets adjust to these policies, such drops will recover," Chen added. this is just a wait and see attitude) market cooling policy works, let's see what happens as the consequences.
. India also strikes at car factories. There, however, the requirements are more philosophical, but still.
and do not forget about the movement around the IPO of an agricultural Chinese bank. Enough capital raising is planned for this year, because the last year has significantly reduced the available capital. The timing is unfortunate, attraction may be insufficient, and then NPL will grow, and then they still remember, how is it going))
on the graphics of purchases of Gov't Agency Bonds, net. all sorts of fun and freddy papers.
I have not decided on that, what to think about real estate in the USA (Okay, what can you afford)), but in many respects I agree with Schiller's comments of approximately the same content: "ну.., not so i'm sure, but growth (then from a year ago low) it's more than a tax credit, it's quite in the spirit of growing confidence, whether.."
ie. in comparison with someone I am an optimist, with someone – pessimist. but there is such a thing, how to compare the expectations. after an incomprehensible inflow of funds into Ukrainian junk bonds, IMHO, even the deterioration of the situation on the residential real estate market in the United States should not stop the demand for equity securities.
On the one side, it can support the dollar (disputed, I agree, but maybe), with another – is this the beginning of a reassessment of the prospects for real estate prices from the opposite (someone should buy at the highs reflecting an extremely positive attitude) ?
