"Signs of optimism are emerging in the Finnish real estate market. However, buyers say they're confused about where the market is heading.", YLE, 12 LocaKulta 2009
So here is my message to the confused "buyers" : "Don't be"
Historically, housing price has never grown while unemployment is heading higher.
Think about the fact that interest rates are historically low, yet Bank lending for housing purchase has collapsed from a year ago and no sign whatsoever of a recovery...except based on "cheap talk" from real estate agents amplified by some media and crook economists.
So I would rectify the YLE statement by saying "Sellers are confused, some are scared and others worried".
As I said there has been a little bit of euphoria as if the economy has recovered..It has not. It's all about government stimulus and ECB interest rates forced generosity.
The cure that have been administered in order to solve the current crisis has not treated the root cause but instead delayed (by 6-18 months) the outcome of 20 years of credit binge.
Takling about credit recklessness, Nordea comes straight to my mind.
Nordea for example is trying to use "the fire to fight the fire"; Using bad credit style to fight bad credit past behaviour is a bad principle in itself and it won't work but it shows you clearly another sign that this bank is trying to fight for its survival. They clearly made mistakes by overexposing itself in the baltics which are at the bring a regional tsunami....and they will pay a heavy price for that...and hopefully they won't pass their pain to the "consumer" or "buyers" by overshooting their base rates or margin...I bet there are capable.
Here is a statement from Nordes taken from their web site :
"The loan interest it tax-deductible if the loan is
- a loan taken out to acquire income which is considered debt taken to acquire taxable income, for example, loans taken out to acquire listed shares or rental income."
Amazing, but it is taken as is...re-read it... "loans taken out to acquire listed shares"
That's crazy...they want people to speculate on stock market...while abusing rules on tax deduction. So the government has put in place a flawed system - the regulators are somewhat hibernating and Nordea like a vampire tries despereatly to fool badly the last "buyer"
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