Thursday, 16 October 2008
Housing Price On Free Fall
"Prices for old dwellings have decreased markedly in Finland, the Central Federation of Finnish Real Estate Agencies (KVKL) said in a statement Wednesday.
At the end of September prices for two-room apartments had dropped 8.4 per cent from April, when they peaked after a long continuous rise.
The number of sales has also clearly decreased. In July-September 2008 there were 20 per cent fewer sales compared to the year-ago period.
The average price per square metre for old dwellings was 1,871 euros at the end of September, down from 2,043 euros in April.
The decrease has been even more marked in Helsinki and for larger apartments."
Lately, it seems almost fashion to bail out anything that fall or that is too big to fail, how about the housing market?
Bubble were the main characteristics of the past 20 years of economical Euphoria. From Stock market to housing bubble, it is now ending up with the bursting of the credit bubble. As some highlighted, we are simply running out of bubble...
Why housing price has to go higher and higher thus prone to speculation? after all, if one want to speculate, there are better places such as casinos or better the Stock Market... Obviously the collateral damage are mainly the young first time buyers, pushed by Euphoria and helped by smiling bankers, were willing to take heavy debt and for a very long period, for some until retirement...
"Finnish household debts have increased rapidly, Statistics Finland said in a statement on Wednesday. Last year total outstanding household debt was 80 per cent greater than in 2002.
The proportion of indebted households was highest in the 25-44 age group at 80 per cent. Slightly over one-half of them had housing loans.
They also had the largest loans: their total debt per indebted household was EUR 79,000 and their housing loan per household EUR 94,000.
The share of households with a housing loan does not diminish significantly until in the age group of over 55, and even two out of five of them still have housing loans"
Luckily, the credit crisis came on time to put an end to those silly development. A clear example was observed in Spain, where banks started to issue 50 years loan...a total non sense.
...in the meantime, you can clearly see uncompetence in daylight. Sometime you wonder if some minister didn't have to go to some kind of special training...
"Minister of Transport and Communications Anu Vehviläinen says that the government needs to consider tougher measures to pressure Russia into opening the Vaalimaa border crossing to car transport lorries..."
I can assure you that Russian lorries will have to be classified as an endanger species as they will totally vanish in the month if not days to come as the credit crisis is hitting hard the consumer. You see, In Russia, banks are not any more figthing for providing loans but are simply trying to survive...
How about "David and Goliath II", that's not the latest Hollywood or Bollywood movie but the latest headline on YLE:
"Finland and France are on collision course as the European Union summit begins in Brussels. Finland is willing to reject a French proposal on further processing of the EU's energy and climate package."
So if I summarize, Finland is rejecting a French proposal and is flexing its muscle against Russia...I guess they really deserve not to have any banking crisis, at least to reward their acute sense of humor...