Sunday, 26 August 2012

Lance and Neil Armstrong: a Fraud ?

Wiki: In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual;

Saturday, 4 August 2012

KTI : "Increased uncertainty related to housing prices”

"Regarding the outlook for housing prices, some differing views have been presented recently. 

According to some specialists, housing prices are likely to decrease due to the worsening economic outlook and tight financial markets. 

Some others, however, estimate a clear increase in prices in the growth cities, due to the strong demand and continuous internal migration (1)

According to the forecasts of Pellervo Economic Research PTT, housing prices will decline by 1.8% in 2012. 

The housing market is supported by the healthy Finnish banks as well as slight increase in household income (2)

However, there is a lot of uncertainty related to the outlook after 2012 (3)

If the euro area’s crisis will be solved efficiently,that might stimulate the housing markets markedly (4)

However, some specialists have stated that housing prices are not sustainable and thus include risks. (5)"

I extracted this text from a study done by "KTI - High Quality Property Information" , an interesting and professionally made report on the housing market in Finland. Not sure how long the report will stay  and be accessible online, anyway,  I extracted the housing part related to residential.

In addition, I "colorised" the text above, to put emphasis on what one can call a politician talk... providing both positive and negative views hence pleasing both parties but most importantly not scaring customers of this report (the sponsors, which I extracted a list of it see - Ref 1- below ).

Anyway some comments:
(1) Demand has started to flatten during amid record housing price and historically generous housing financing (very low interests rates) - migration will continue if employment rises and also if housing is affordable and attractive - which is not granted currently.

(2) Increase in household income? I have some doubt...

(3) Uncertainty not only after 2012 but also in 2012... we had few tremors that were swiftly handled by the ECB, each time showing the fragility and gravity of the situation.

(4) If the situation was solved efficiently in the euro zone, interests rates will normalised which will send a shockwave to indebted Finnish household (98% have housing loan with variable interest rates). So housing price will also normalised downward...

(5) "Some specialists", too bad there is no mention of who they are and also what are those risks and what are the triggers for it to materialise.

Ref 1: The sponsoring companies include CapMan Real Estate, Helaba, HYY Real Estate, IVG Polar, KIINKO Real Estate Education, NCC, Newsec, Ovenia, Sato Corporation, SEB Merchant Banking and Skanska. Also, RAKLI – the Finnish Association for Property Owners and Construction Clients, the City of Helsinki, as well as Invest in Finland, have provided financial support for this report. KTI wishes to thank the sponsors.

Friday, 3 August 2012

"Central bank governor Erkki Liikanen said that Finnish authorities should consider granting housing loans for only part of the value of a property.
He pointed out that Spain should provide a warning as to what can happen when borrowers become over indebted. “A rapid increase in housing prices is a recipe for a crisis, which always follows when prices fall sharply. Ordinary people, the economy and the banks suffer,” Liikanen said in an MTV3 interview on Friday.
Liikanen said that the crisis has taught that banks should be supervised as an entire sector, so that risks faced by the sector could be detected."
Source: Liikanen

As far as remember, Mr Liikanen has been warning over housing debt in the past few years. This is not a surprise as household debt is at record level (supported by historically low interest rates).

But would authorities listen to liikanen? There are far too many interests (conflict of interests also?) for many be it, let it all rise...