"In March 2008, building permits were granted for a total of 3.2 million cubic metres, which is a good 30% lower than one year ago. Cubic volumes went down in all building types." Statistics Finland wrote.
For those who still believe that we have just a minor slowdown then...they should just wake up to the reality. The housing boom has ended, and has peaked about 1,5 year ago as stated in this blog many times.
Housing Permits reflect the future of the construction industry. The professional have seen their stock growing fast amid a slump in demand due to unrealistic pricing and higher interest rates.
The market have been kept alive artificially by the media through "the buy now" subliminal type of programs, the newspapers by parading "puppet" economists preaching that this time it's a normalization and among the worse, the king of the vulture, the master of the chacals...the right arms of banks : Kiinteistomailmaa, Huoneistokeskus, Habita and Viva to name few.
Those vultures have been setting prices far too high but yet attracted the honest workers that was just asking a professional service and correct valuation of those real estate they were ready to commit for the rest of their life.
Higher commission and a race for massive profit have pushed those banks and real estates to wrongly rate or valuate those assets. Price fixing, and conflict of interest had as well destroyed free market values by distorting the natural equilibrium of the market and pushed people into an unbearable indebtedness.
What next? a correction.
When? 2009-2010
How much? -5% to -60%
Why? You see the U.S. economy has never been in such bad shape at a time of an oil and agro shock. The balance of the world economy could go either way. Indeed if the situation doesn't stabilize as planned in the U.S., then the global economy could deteriorate at a very fast rate.
My scenario, is not that extreme, I will just see a -10 to -20% in the most overheated area, but in a more prolonged period, not as sharp as in the 90's but as slow as in Japan, so maybe 5 years a 20% drop which could be about 2-4% drop per year. In that sense you could say that price won't grow but inflation will eat its value...
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