tag:blogger.com,1999:blog-84924160055515325742024-01-09T08:21:38.779+02:00Finnish Housing Bubble Bursting - AsuntokuplaAre we going to witness an historical housing price correction amid sharpest rise in unemployment and social tension?...and the minimum you should know in order to protect yourself from this downturn from an economic, stock market and political point of view... with a pinch of humor and sarcasm.HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.comBlogger516125tag:blogger.com,1999:blog-8492416005551532574.post-73556443250848396372014-10-28T20:29:00.003+02:002014-10-28T20:29:39.833+02:00Helsinki housing prices in decline<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUJqEQ7iWEuHEHZRMD7ja5FNY2Uy7ckXxgQqxyRDV1S-7qymOI0QA2ioCoAY9DsVCrJcjEhaXrXRwwIk8c2uZAqmEUUW6jpzZpQ5EYcFD9ynRlehsnoh6TeeKypK1MpX8b2lA-9lbnQlk/s1600/collapsinghouse.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUJqEQ7iWEuHEHZRMD7ja5FNY2Uy7ckXxgQqxyRDV1S-7qymOI0QA2ioCoAY9DsVCrJcjEhaXrXRwwIk8c2uZAqmEUUW6jpzZpQ5EYcFD9ynRlehsnoh6TeeKypK1MpX8b2lA-9lbnQlk/s1600/collapsinghouse.jpg" /></a></div>
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The year-on-year decline across the country was 1.0 percent at the end of September, 0.8 percent in the Helsinki region, and 1.2 in the rest of Finland.</div>
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In September, the average price per square metre of an old dwelling in a housing company was an average 2,192 euros in the whole country, 3,546 euros in the Helsinki region and 1,661 euros elsewhere in the country.</div>
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Sources: <a href="http://www.tilastokeskus.fi/til/ashi/2014/09/ashi_2014_09_2014-10-28_tie_001_en.html" target="_blank">Statistics Finland</a>, <a href="http://finland.fi/public/default.aspx?nodeid=41809&contentlan=2&culture=en-US" target="_blank">STT</a></div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com30tag:blogger.com,1999:blog-8492416005551532574.post-52352714768412427962014-06-28T10:21:00.004+03:002014-06-28T10:23:38.860+03:00Growth of housing loans halted<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhpv8awUvO06Vc_0MdkPjV-wVNZQTUZIQHvVBUeDnJSKsyEdFTu8Wge7Cxa4p-CZSrhvhyphenhyphenYHe8hZHfp9r2dgmEDA32VKEmgwwtQ001iP2TZXaosDSHnqFnSUHqMzZinkm4vxaLHYWFmpgo/s1600/velk_2013_2014-06-26_tie_001_en_001.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhpv8awUvO06Vc_0MdkPjV-wVNZQTUZIQHvVBUeDnJSKsyEdFTu8Wge7Cxa4p-CZSrhvhyphenhyphenYHe8hZHfp9r2dgmEDA32VKEmgwwtQ001iP2TZXaosDSHnqFnSUHqMzZinkm4vxaLHYWFmpgo/s1600/velk_2013_2014-06-26_tie_001_en_001.gif" height="275" width="400" /></a></div>
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<span style="background-color: white; font-family: arial, verdana, lucida, helvetica, sans-serif; font-weight: bold;">Average housing loans of dwelling units with housing loans in 2002 to 2013</span></div>
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<blockquote class="tr_bq">
<span style="background-color: white;"><span style="font-family: Courier New, Courier, monospace;">"According to Statistics Finland's statistics on indebtedness, the average housing loan of household-dwelling units with housing loans was EUR 93,620, which was in real terms around EUR one hundred less than in 2012. In the early 2000s, the average housing loans grew, on average, by ten per cent per year, but the growth has slowed down significantly in recent years.<span style="font-size: x-small;">" </span></span></span></blockquote>
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Another indicator demonstrating that the start of the downturn of the housing market. HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com16tag:blogger.com,1999:blog-8492416005551532574.post-76563742906035561662014-06-15T10:11:00.000+03:002014-06-15T10:11:54.299+03:00Finnish Housing Price falling...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilN7KiqQ9PxkU_CxaqXsxIFSmVocwtS2XRzhFkkImZmei0E2oFlRq-W4SO-X2vmDvY5eBuDDuaHh26gHqy_HUEp6YqQIMkUH3yZFLc9wXzYGjhM_7ac5rkxZyVpksEoNp9czjv5_jDvz0/s1600/kihi_2014_01_2014-06-06_tie_001_en_001.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilN7KiqQ9PxkU_CxaqXsxIFSmVocwtS2XRzhFkkImZmei0E2oFlRq-W4SO-X2vmDvY5eBuDDuaHh26gHqy_HUEp6YqQIMkUH3yZFLc9wXzYGjhM_7ac5rkxZyVpksEoNp9czjv5_jDvz0/s1600/kihi_2014_01_2014-06-06_tie_001_en_001.gif" height="245" width="400" /></a></div>
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<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;">"In the first quarter of 2014, prices for old single-family houses fell by an average of 3.3 per cent from the previous year in the whole country.</span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;"><b>In Greater Helsinki, prices went down by 8.9 per cent</b> from the corresponding period last year and in the rest of the country by 2.6 per cent.</span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;">Compared with the last quarter of 2013, prices of old dwellings in detached houses increased by an average of 0.7 per cent in the whole country."</span></blockquote>
<a href="http://www.tilastokeskus.fi/til/kihi/2014/01/kihi_2014_01_2014-06-06_tie_001_en.html" target="_blank"><span style="font-size: x-small;">Source: Statistics Finland</span> </a><br />
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Finnish housing price have reached a plateau, a maximum average price that most likely will be an historical one (lasting 1-2 generations?) which will slowly head downward in the next few years.<br />
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I personnaly thought prices will readjust after the "financial crisis" in 2009 but I underestimated how low and fast interest rates will fall. Here are some important facts:<br />
<br />
<ul>
<li>98% or more of Finnish mortgage rate are link to the Euribor or variable interest rates.</li>
<li>Finnish household debt level is at historical level</li>
<li>low fertility rates with a potentially shrink of the finnish population size in the years coming</li>
<li>uncertain immigration since mostly linked to the economical situation (which is not that rosy)</li>
</ul>
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To me, I could bet the following:</div>
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<ul>
<li>2009-2013 period was a temporary one that saw prices rise due to low interest rates and supported by two decades of rising prices that anchored expectation.</li>
<li>2014-2019 slow downward price adjustment with slowly mindset change with regard to future price evolution</li>
<li>2020-2025 sharp decrease as interest rise and oversupply. </li>
</ul>
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As an investment, housing will be a poor one unless the Euro currency disappear ;-)</div>
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HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com6tag:blogger.com,1999:blog-8492416005551532574.post-86924899365415438362014-02-05T08:41:00.000+02:002014-02-05T08:42:37.295+02:00Government proposes stricter mortgage rules<blockquote>
"The Finance Ministry has agreed new proposals with the Federation of Finnish Financial Services that would seek to limit the amount banks can lend to homebuyers, <b>in an attempt to see off a potential housing bubble</b>. </blockquote>
<blockquote>
However, the National Coalition Party’s Minister for Financial Affairs, <u>Jan Vapaavuori</u>, insisted on Tuesday that there are currently <u>no signs of the market overheating</u>, and said the announcement of the proposals was not related to the state of the property market or the mortgage market. He also claimed that the measures would help prevent problems in future. </blockquote>
<blockquote>
Under the proposals, a bank may grant a mortgage of up to 90 percent of the value of a property, and buyers must put down ten percent of the price of the sale upfront. First-time buyers would have some leeway, however, with the loan-to-value cap set at 95 percent. </blockquote>
<blockquote>
The tabled measures are part of the government’s banking reform bill, which is expected to have its final reading in March and April, and would not come into force before July 2016. The Finance Ministry said they decided to announce the proposals early because the issue of a potential loan ceiling has aroused widespread interest."</blockquote>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com7tag:blogger.com,1999:blog-8492416005551532574.post-65123641556674780352013-06-24T20:50:00.000+03:002014-02-05T08:38:15.600+02:00Finnish Housing bear market ... two decades?That's it. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoIFrxJ1iRMI4SjDCMpNU64RcmrdcR-0lDZQxgzjJtQ4FIg6t3le7HLMrx2Z3jOtp4YLhlNA3cdjvmgXxcY376KmH68v0fb3ya7LsY6aAMJLdAXIPQ336ynAwBzpLZzc13mwadZVOJcNE/s1600/ashi_2013_12_2014-01-28_kuv_005_en_001.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoIFrxJ1iRMI4SjDCMpNU64RcmrdcR-0lDZQxgzjJtQ4FIg6t3le7HLMrx2Z3jOtp4YLhlNA3cdjvmgXxcY376KmH68v0fb3ya7LsY6aAMJLdAXIPQ336ynAwBzpLZzc13mwadZVOJcNE/s1600/ashi_2013_12_2014-01-28_kuv_005_en_001.gif" height="245" width="400" /></a></div>
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In the past 4 years the market was fuelled by cheap interest rates and stubborn housing buyers & sellers thinking that there is only one direction for the price, going up - the sky being the limit. And of course, also fuelled by the media & bankers - the devil being in the details...<br />
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Now, the main question is for how long the correction will last..<br />
I think this time it is different that 1990's (short, abrupt correction then massive and persistent recovery ) - it looks more like a japan style housing scenario - a painfully long drop of prices over two decades?<br />
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At the end, we are entering an era where elderly will rule the kingdom :-), as Japanese did in the early 90's- a situation that saw their housing market peaking.<br />
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Also , the only chance for Finland is immigration, but immigrants come for jobs, would Finland be able to attract enough of them? I have some doubt unless there is an economical shocks somewhere in the southern Europe or in neighbours countries :-) - there is , but it is temporary, I think those countries are restructuring themselves (economically & politically), like a phoenix they may arise from ashes....unless they don't...then...<br />
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While at the same time beyond the Turku region, far away in a land conquered half a century ago, an important event is unfolding: The US central banker blinked eyes, and spoke of reducing its artificial monetary support which sent interest rates in the north direction and scared the stock markets around the world.<br />
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I think, without being superstitious, 2013 is the turn around in this century :-) (boom boom)HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com5tag:blogger.com,1999:blog-8492416005551532574.post-58303887947432060422013-03-16T21:23:00.000+02:002013-03-17T20:40:17.584+02:00Largest Cash Robbery in European history<div class="tr_bq">
<span style="background-color: white; font-family: sans-serif; line-height: 19px;">...but first let's examine one the biggest </span><span style="font-family: sans-serif;"><span style="line-height: 19px;">robbery which happen to occur in<span style="font-size: x-small;"> </span><span style="font-size: xx-small;">great</span><span style="font-size: x-small;"> </span>Britain<span style="font-size: x-small;"> :</span></span></span></div>
<blockquote>
<span style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 19px;">"</span><span style="font-family: Courier New, Courier, monospace;"><span style="background-color: white; font-size: 13px; line-height: 19px;">The </span><b style="background-color: white; font-size: 13px; line-height: 19px;">Securitas depot robbery</b><span style="background-color: white; font-size: 13px; line-height: 19px;"> was the largest cash </span><a href="http://en.wikipedia.org/wiki/Robbery" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Robbery">robbery</a><span style="background-color: white; font-size: 13px; line-height: 19px;"> in </span><a href="http://en.wikipedia.org/wiki/United_Kingdom" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="United Kingdom">British</a><span style="background-color: white; font-size: 13px; line-height: 19px;"> history. It took place on the evening of 21 February 2006 from 18:30 GMT until the early hours of 22 February 2006. Several men abducted and threatened the family of the manager, tied up fourteen staff members and stole </span><a class="mw-redirect" href="http://en.wikipedia.org/wiki/Pound_Sterling" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Pound Sterling">£</a><span style="background-color: white; font-size: 13px; line-height: 19px;">53,116,760</span><sup class="reference" id="cite_ref-1" style="background-color: white; line-height: 1em;"><a href="http://en.wikipedia.org/wiki/Securitas_depot_robbery#cite_note-1" style="background-image: none; background-position: initial initial; background-repeat: initial initial; color: #0b0080; text-decoration: none; white-space: nowrap;">[1]</a></sup><sup class="reference" id="cite_ref-bbcnewstimeline_2-0" style="background-color: white; line-height: 1em;"><a href="http://en.wikipedia.org/wiki/Securitas_depot_robbery#cite_note-bbcnewstimeline-2" style="background-image: none; background-position: initial initial; background-repeat: initial initial; color: #0b0080; text-decoration: none; white-space: nowrap;">[2]</a></sup><span style="background-color: white; font-size: 13px; line-height: 19px;"> in </span><a class="mw-redirect" href="http://en.wikipedia.org/wiki/Bank_note" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Bank note">bank notes</a><span style="background-color: white; font-size: 13px; line-height: 19px;"> from a </span><a class="mw-redirect" href="http://en.wikipedia.org/wiki/Securitas_AB" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Securitas AB">Securitas Cash Management Ltd</a><span style="background-color: white; font-size: 13px; line-height: 19px;"> depot in Vale Road, </span><a href="http://en.wikipedia.org/wiki/Tonbridge" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Tonbridge">Tonbridge</a><span style="background-color: white; font-size: 13px; line-height: 19px;">, </span><a href="http://en.wikipedia.org/wiki/Kent" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Kent">Kent</a><span style="background-color: white; font-size: 13px; line-height: 19px;">.</span> </span></blockquote>
<blockquote>
<span style="font-family: Courier New, Courier, monospace;"><span style="background-color: white; font-size: 13px; line-height: 19px;">The </span><a href="http://en.wikipedia.org/wiki/Bank_of_England" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Bank of England">Bank of England</a><span style="background-color: white; font-size: 13px; line-height: 19px;">, to whom the money belonged, was reimbursed £25 million by </span><a href="http://en.wikipedia.org/wiki/Securitas_(Swedish_security_company)" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Securitas (Swedish security company)">Securitas AB</a><span style="background-color: white; font-size: 13px; line-height: 19px;"> the same day, and assured the public that Securitas would make up any additional loss</span><span style="background-color: white; font-size: 13px; line-height: 19px;"><br /></span><span style="background-color: white; font-size: 13px; line-height: 19px;">On 23 February 2006 at around 19:00 police confirmed the arrest in </span><a href="http://en.wikipedia.org/wiki/Forest_Hill,_London" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="Forest Hill, London">Forest Hill</a><span style="background-color: white; font-size: 13px; line-height: 19px;">, </span><a href="http://en.wikipedia.org/wiki/South_London" style="background-color: white; background-image: none; color: #0b0080; font-size: 13px; line-height: 19px; text-decoration: none;" title="South London">South London</a><span style="background-color: white; font-size: 13px; line-height: 19px;"> of a man aged 29 and a woman aged 31, on suspicion of conspiracy to commit robbery. </span> </span></blockquote>
<blockquote>
<span style="font-family: Courier New, Courier, monospace;"><span style="background-color: white; font-size: 13px; line-height: 19px;">On 28 January 2008, the jury returned guilty verdicts on Stuart Royle, Jetmir Bucpapa, Roger Coutts, Lea Rusha and Emir Hysenaj. John Fowler and Keith Borer were cleared of all charges.</span><sup class="reference" id="cite_ref-21" style="background-color: white; line-height: 1em;"><a href="http://en.wikipedia.org/wiki/Securitas_depot_robbery#cite_note-21" style="background-image: none; background-position: initial initial; background-repeat: initial initial; color: #0b0080; text-decoration: none; white-space: nowrap;">[21]</a></sup><span style="background-color: white; font-size: 13px; line-height: 19px;"> The next day Emir Hysenaj was sentenced to 20 years in prison with an order that he serve a minimum of 10 years. Stuart Royle, Lea Rusha, Jetmir Bucpapa and Roger Coutts were given life sentences with an order that they serve a minimum of 15 years</span></span><span style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 19px;">." <a href="http://en.wikipedia.org/wiki/Securitas_depot_robbery">Source: Wikipedia</a></span></blockquote>
<span style="background-color: white;"><span style="font-family: sans-serif;"><span style="line-height: 19px;">... coming back to todays story, we have just witnessed one of <a href="http://www.bloomberg.com/news/2013-03-16/euro-area-takes-aim-at-depositors-in-cyprus-bailout.html">the biggest robbery in the history on Europe</a>. Apparently, my sources told me that the cypriot people were robbed during the week end in broad daylight by a well organised team. </span></span></span><br />
<span style="background-color: white;"><span style="font-family: sans-serif;"><span style="line-height: 19px;"><br /></span></span></span>
<span style="background-color: white;"><span style="font-family: sans-serif;"><span style="line-height: 19px;">Apparently it was prepared well in advance and seem to be premeditated. a total of 6 billions euro were taken from poor depositors (some keen accountants, through a process called reverse engineering, calculated that each depositor were robbed the equivalent of 6.5% and the less poor of 9.9%).</span></span></span><br />
<span style="background-color: white;"><span style="font-family: sans-serif;"><span style="line-height: 19px;"><br /></span></span></span>
<span style="font-family: sans-serif;"><span style="line-height: 19px;">The only video footage shows that the master mind was seen waving the european flag... </span></span><br />
<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;">"Euro-area finance ministers agreed to an unprecedented tax on Cypriot bank deposits as officials unveiled a 10 billion-euro ($13 billion) rescue plan for the country, the fifth since<a density="sparse" href="http://topics.bloomberg.com/europe/" style="background-color: transparent; background-repeat: no-repeat no-repeat; border: 0px; color: #0066cc; margin: 0px; outline: 0px; padding: 0px; text-decoration: none; vertical-align: baseline;">Europe</a>’s debt crisis broke out in 2009.</span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;">Cyprus will impose a levy of 6.75 percent on deposits of less than 100,000 euros -- the ceiling for European Union account insurance -- and 9.9 percent above that.</span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;">The measures will raise 5.8 billion euros, in addition to the emergency loans, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, told reporters early today after 10 hours of talks in Brussels." <a href="http://www.bloomberg.com/news/2013-03-16/euro-area-takes-aim-at-depositors-in-cyprus-bailout.html">source: Bloomberg</a><span style="background-color: white;"><span style="font-size: x-small;"><span style="line-height: 19px;"> </span></span></span></span></blockquote>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com10tag:blogger.com,1999:blog-8492416005551532574.post-16533347808694287182013-02-18T20:45:00.001+02:002013-02-19T08:46:24.031+02:00Finland's Neighbour Debt Bubble...<blockquote class="tr_bq">
<span style="font-family: Courier New, Courier, monospace;"><span style="background-color: white; font-size: 15px; line-height: 24px;">“Swedish households today are among the most indebted in Europe and we cannot have household lending that spirals out of control,” </span><a href="http://search.bloomberg.com/search?q=Martin%20Andersson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja" style="background-color: white; background-repeat: no-repeat no-repeat; border: 0px; color: #0066cc; font-size: 15px; line-height: 24px; margin: 0px; outline: 0px; padding: 0px; text-decoration: none; vertical-align: baseline;" title="Search News">Martin Andersson</a><span style="background-color: white; font-size: 15px; line-height: 24px;">, the director general of the Financial Supervisory Authority, said in an interview in Stockholm.</span></span> </blockquote>
<blockquote class="tr_bq">
<span style="background-color: white; font-family: Courier New, Courier, monospace; font-size: 15px; line-height: 24px;">The FSA is ready to enforce a cap limiting home loans relative to property values to less than the 85 percent allowed today, Andersson said</span> </blockquote>
<blockquote class="tr_bq">
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<span style="background-color: white; font-family: Courier New, Courier, monospace; font-size: 15px; line-height: 24px;">“What we saw in the 1990s crisis was that if you bought a home with a 90 percent debt ratio in 1991, it took about six or seven years</span><span style="background-color: white; font-family: Courier New, Courier, monospace; font-size: 15px; line-height: 24px;">until you were back at a level where you had a property that was worth more than your mortgage,” Andersson said in the Feb. 13 interview. “That is a very long time.”</span> </blockquote>
<blockquote class="tr_bq">
<span style="background-color: white; font-family: Courier New, Courier, monospace; font-size: 15px; line-height: 24px;">“One should be prepared for a downturn,” Andersson at the FSA said. “House prices cannot just continue upwards in eternity.” <a href="http://www.bloomberg.com/news/2013-02-17/debt-bubble-born-of-easy-cash-prompts-swedish-rule-review.html">source</a> </span></blockquote>
Some charts ...<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguYM_WW5N85TUyIWDkdBNKeOU0pG2ck2wDMfod3YmE7anX6aYUQIlxuMivpQomjH9SL5FiE2-NHpV-9W62NNfshH8nBbdPHCLZ3S_Yc0ddnPl4bTjsIVSyNtLeNnPtvRNMgfqWatoJhpQ/s1600/ashi_2012_12_2013-01-25_kuv_005_en_001.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="245" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguYM_WW5N85TUyIWDkdBNKeOU0pG2ck2wDMfod3YmE7anX6aYUQIlxuMivpQomjH9SL5FiE2-NHpV-9W62NNfshH8nBbdPHCLZ3S_Yc0ddnPl4bTjsIVSyNtLeNnPtvRNMgfqWatoJhpQ/s400/ashi_2012_12_2013-01-25_kuv_005_en_001.gif" width="400" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvFO7VKEnWQG1dDvsX8o1Lc2U00mXOlXbHlttFz6jJEkA5_XySIhKpCiupSzaCtJ5GU0Sl-_qmX2hy7ggB1jls2sbdQJ_IA98W-W7CLycTKnqGgGoAP_hDfeH5PStjkO04woBQp2UdTTI/s1600/asuntokupla1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="340" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvFO7VKEnWQG1dDvsX8o1Lc2U00mXOlXbHlttFz6jJEkA5_XySIhKpCiupSzaCtJ5GU0Sl-_qmX2hy7ggB1jls2sbdQJ_IA98W-W7CLycTKnqGgGoAP_hDfeH5PStjkO04woBQp2UdTTI/s400/asuntokupla1.jpg" width="400" /></a></div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com8tag:blogger.com,1999:blog-8492416005551532574.post-80247781996901881422013-01-31T19:39:00.001+02:002013-01-31T19:52:40.743+02:00Significant milestone...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJQw7GtXGForApwTSlfMGrdTsptUe_T0tjw_gP3eHm5ro5rXRJ2Wtr4uoSsX-W0sYmGpoOnlniIcGJ_BLXKFdM4b7LJYrdEYKrC1f8NlRbXX2vyc6noWjbJxjDE-BuDwUm_qX4bwkpWWY/s1600/HHIncome2011.tiff" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="247" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJQw7GtXGForApwTSlfMGrdTsptUe_T0tjw_gP3eHm5ro5rXRJ2Wtr4uoSsX-W0sYmGpoOnlniIcGJ_BLXKFdM4b7LJYrdEYKrC1f8NlRbXX2vyc6noWjbJxjDE-BuDwUm_qX4bwkpWWY/s400/HHIncome2011.tiff" width="400" /></a></div>
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I think it is significant... Household income (first pillar) growth was a potential explanation for the housing rise (combine with faltering interest rates (second pillar)).
So the first pillar is gone, and the second is lurking in the horizon (i.e. raise in interest rates) ...HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com10tag:blogger.com,1999:blog-8492416005551532574.post-78929448955237375592013-01-01T20:12:00.001+02:002013-01-02T19:14:15.423+02:00Short Status...Short status on a pretty peculiar Finnish housing bubble:
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvgnOcr3TGIieLcx5mOSs6khF82k91xvcYJCOJPtgdY5QwNDDVtHdJ7p1gBmnprqczv6KgiaU3KQbwVcrnWyo2EgyOIr7ebLCxSTuSFqoW3075zL_iU8KrVOREsfoyKBNe-9mm9WWjlVk/s1600/rentegrafiek-euribor1jr-43.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="233" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvgnOcr3TGIieLcx5mOSs6khF82k91xvcYJCOJPtgdY5QwNDDVtHdJ7p1gBmnprqczv6KgiaU3KQbwVcrnWyo2EgyOIr7ebLCxSTuSFqoW3075zL_iU8KrVOREsfoyKBNe-9mm9WWjlVk/s400/rentegrafiek-euribor1jr-43.jpg" width="400" /></a></div>
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Interest rates, especially the 12 month Euribor (for which 98% of the Finnish population have locked their housing mortgage rate), have gone down from a high of 5% beginning of the decade to reach almost the zero level in 2012 as shown in the chart above.<br />
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Central banks have been fighting deflation since the crisis started in 2008, lowering rates to unchartered level. The effect was to support artificially all asset prices.
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzj1AKRDCGpuTC2wMH4jKji5D22zCjfuLuJQjUo5I-9MEofENdaIZeoQYwNwVzk2jETV0XaBUJ2A9EfuKDoiotJshnN-75BfAJGrPt9sWJidSEGG63nGJVa7QzutVBi_jcP4pZ6qq1xio/s1600/HF0113.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzj1AKRDCGpuTC2wMH4jKji5D22zCjfuLuJQjUo5I-9MEofENdaIZeoQYwNwVzk2jETV0XaBUJ2A9EfuKDoiotJshnN-75BfAJGrPt9sWJidSEGG63nGJVa7QzutVBi_jcP4pZ6qq1xio/s400/HF0113.gif" width="400" /></a></div>
In Finland, as highlighted earlier, the housing market is hugely sensitive to short term interest rates(Euribor) , and the collapse of the Euribor to almost "Zero" helped avoid a readjustment in the short run.<br />
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This has renewed optimism in the Finnish housing market and induce the belief that the housing market is sound - a very dangerous dangerous asumption.<br />
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In addition, this optimism in the market has led housing builders to ramp up their production after a freeze in 2009 (at the peak of the crisis). Eventually, housing stocks are accumulating as more and more housing are being put in the market without finding any buyers (even though interest rates are at level not seen since the creation of the republic of Finland).<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhggLenVqjG2CQjZoQhYOxau5Ptxu9D6lgsBilWIHEbMypcWoni7ArQTCEZKfmsZtxumMpg8cdP44WbrntMIczcWYaE9Uf2BWpYb29SQxqgYQnceASF0OEnt3c14HF0LfWK7SzywHxrqug/s1600/GDPdec2012.tiff" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="287" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhggLenVqjG2CQjZoQhYOxau5Ptxu9D6lgsBilWIHEbMypcWoni7ArQTCEZKfmsZtxumMpg8cdP44WbrntMIczcWYaE9Uf2BWpYb29SQxqgYQnceASF0OEnt3c14HF0LfWK7SzywHxrqug/s400/GDPdec2012.tiff" width="400" /></a></div>
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Also the economical outlook (see figure above) is deteriorating for an export oriented economy, added to that a ageing population with potentially (in the next decades) a shrinking population...all points to a scenario which tend to be similar to the Japanese experience.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgq72DsiKtSiV6zXXqrdIufolpD6PpfE0h1gPKroHKvWHLMeiJi5jGnv3LaLyrSXYq4lYPLn2scrOhKVJ2htiovbA2bFIOWxw5GYII6Vup2ebpHusTOPWSd9zzZeZO4G7HV8PrWF47rKYI/s1600/japan-house-prices--nov08.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="237" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgq72DsiKtSiV6zXXqrdIufolpD6PpfE0h1gPKroHKvWHLMeiJi5jGnv3LaLyrSXYq4lYPLn2scrOhKVJ2htiovbA2bFIOWxw5GYII6Vup2ebpHusTOPWSd9zzZeZO4G7HV8PrWF47rKYI/s400/japan-house-prices--nov08.gif" width="400" /></a></div>
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And I let you compare it with the Finnish market, with a potential historical peak reach during 2010-2012:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNNh2OwB-NsUaDxiHs6F821fsuXe9b1HYP-vrbaLJMpwxf3mzlqkPsj8Cn69VXof3dGrD5YzGfi2zNwZF0h0MLCk4XlVYLaPLt27q2WzaoYruryEIFK86gA5YAkqkrSpipMeQitZ0vjVw/s1600/hprice28dec2012.tiff" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="307" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNNh2OwB-NsUaDxiHs6F821fsuXe9b1HYP-vrbaLJMpwxf3mzlqkPsj8Cn69VXof3dGrD5YzGfi2zNwZF0h0MLCk4XlVYLaPLt27q2WzaoYruryEIFK86gA5YAkqkrSpipMeQitZ0vjVw/s400/hprice28dec2012.tiff" width="400" /></a></div>
<br />HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com8tag:blogger.com,1999:blog-8492416005551532574.post-62475999880582689072013-01-01T13:49:00.001+02:002013-01-01T13:49:17.992+02:00Happy New Year 2013!!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJjDa5SUDyAqjryErG1UNesGRqaNS9rxDX6PaYR0Qr7ZtLevbaQ-E8bPmtiDqOsBNPcs-_xO4qDmVwPDx2lkKk_0PE_ODULdXxFeAybDr5qYK95P0HwBgcoideuc_39iCIpEpewAO959w/s1600/happy-new-year.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="300" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJjDa5SUDyAqjryErG1UNesGRqaNS9rxDX6PaYR0Qr7ZtLevbaQ-E8bPmtiDqOsBNPcs-_xO4qDmVwPDx2lkKk_0PE_ODULdXxFeAybDr5qYK95P0HwBgcoideuc_39iCIpEpewAO959w/s400/happy-new-year.jpg" /></a></div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com6tag:blogger.com,1999:blog-8492416005551532574.post-56007342318020030932012-11-11T18:32:00.001+02:002012-12-23T11:46:13.882+02:00Canary in the coal mine ...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjJ9_hsm2Bxn0hnELTsS00uoDsQ9Gh_rLMQfS92Xn3xhHY3uudHESlQGggAu5vC53a6VvCvdb3MEglougXWRhoVFU8Annh79IbLUd2YwXzV9SKqFmdpA_U2ci_94AWgLN5OQC7-t7YgTI/s1600/FearIndex.tiff" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="285" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjJ9_hsm2Bxn0hnELTsS00uoDsQ9Gh_rLMQfS92Xn3xhHY3uudHESlQGggAu5vC53a6VvCvdb3MEglougXWRhoVFU8Annh79IbLUd2YwXzV9SKqFmdpA_U2ci_94AWgLN5OQC7-t7YgTI/s400/FearIndex.tiff" width="400" /></a></div>
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The last time we saw the 2 Years government bond reaching the same historical low,was in 2 August.
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It clearly shows that investors are looking for safety, ready to pay for keeping their money (albeit a low amount). Basically the government is playing the role of a safety box...
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For some who are interested in the french market, a market that also behaved in the same way as in Finland (i.e. was not affected by the current crisis), You can find a report genereated by one branch of the french government. It has very good and credible argument, and actually I like the idea shown in the page 79:
<a href="http://www.cgedd.developpement-durable.gouv.fr/IMG/pdf/france-house-price-2012_cle01f5a6.pdf">www.cgedd.developpement-durable.gouv.fr</a>HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com9tag:blogger.com,1999:blog-8492416005551532574.post-36989315331734160062012-11-08T19:57:00.001+02:002013-01-02T19:37:25.708+02:00Flying Piggies ...<br />
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<span style="font-family: Courier New, Courier, monospace;">"In a report titled: “Just don’t look down some <b>house markets are flying again</b>” Goldman Sachs argues <b>easy money policies</b> by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices.</span><span style="font-family: Courier New, Courier, monospace;"><br /></span><span style="font-family: Courier New, Courier, monospace;">According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted.</span><span style="font-family: Courier New, Courier, monospace;"><br /></span><span style="font-family: Courier New, Courier, monospace;"><b>“High flyers” </b>include Germany, <b><u>Finland</u></b>, Norway, France, Switzerland and Israel as well as Canada and Australia." Source: <a href="http://www.cnbc.com/id/49740329">CNBC</a></span></blockquote>
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"What goes up, goes down", ConfuciusHousingFinland</div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com6tag:blogger.com,1999:blog-8492416005551532574.post-26505326683110525062012-10-17T20:35:00.001+03:002012-10-17T20:35:37.256+03:00Nor"th"way<br />
<h1 class="cnbc_blghdln" style="background-color: white; color: #42505e; font-family: Arial; font-size: 22px; margin: 0px; text-align: left;">
Norway’s Housing Boom Could Lead to Spain-Style Bust, Say Some</h1>
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<b style="background-color: white; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 13px; line-height: 22px; text-align: left;"><strong><a href="http://www.cnbc.com/id/47082429/?The_World_s_Hottest_Real_Estate_Markets" style="color: #c34c28; text-decoration: none;"><strong>Norway’s housing sector</strong></a></strong></b><span style="background-color: white; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 13px; line-height: 22px; text-align: left;">, which has seen prices jump by almost 30 percent since 2006 — could end up replicating a pattern of housing booms and busts seen across the globe, from the U.S. to </span><b style="background-color: white; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 13px; line-height: 22px; text-align: left;"><strong><a href="http://www.cnbc.com/id/15837548/?cid=97121&Japan" style="color: #2d648a; text-decoration: none;"><strong>Japan</strong></a></strong></b><span style="background-color: white; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 13px; line-height: 22px; text-align: left;"> to Spain and Ireland, according to a report by Bank of New York Mellon.</span></div>
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<span style="font-family: Verdana, Arial, Helvetica, sans-serif; font-size: x-small;"><span style="line-height: 22px;">The rest of the article can be found here : </span></span><a href="http://www.cnbc.com/id/49443611">http://www.cnbc.com/id/49443611</a></div>
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I wonder if Northern real estate is overheating...</div>
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Also it is interesting to see that Finnish mortgage rates are the lowest in Europe (since there all based roughly on variable interest rates based on 1 year Euribor)</div>
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<a href="http://www.hs.fi/english/article/Finland%E2%80%99s+housing+loans+cheapest+in+euro+area/1329104949177">http://www.hs.fi/english/article/Finland’s+housing+loans+cheapest+in+euro+area/1329104949177</a></div>
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HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com12tag:blogger.com,1999:blog-8492416005551532574.post-16578911407501257692012-08-31T19:59:00.001+03:002012-08-31T19:59:52.685+03:00No Comments...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyUo3Bf-WjCfos_PkEZCNHcHGS01uscika5S4rhUbEPcF4naTU1wLwxhGiwgv75iMrTtCWfkBHqpJ7YTJ5OaL_wMByPjgtPIYTVIp3zd_VNpyZbWXpMzVcJKBJgdBtzQKAirMZDaXzcjU/s1600/NoComment.tiff" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="102" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyUo3Bf-WjCfos_PkEZCNHcHGS01uscika5S4rhUbEPcF4naTU1wLwxhGiwgv75iMrTtCWfkBHqpJ7YTJ5OaL_wMByPjgtPIYTVIp3zd_VNpyZbWXpMzVcJKBJgdBtzQKAirMZDaXzcjU/s400/NoComment.tiff" /></a></div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com87tag:blogger.com,1999:blog-8492416005551532574.post-89519138859085543462012-08-27T19:17:00.001+03:002012-08-27T19:17:51.871+03:00"Buzz" Game: Find the mistakes...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9_pBbEubUJ9FRWkdyfqYTDl-QhMFdLH9onCR1EwAWBkYcArSw_cndbbW08asT-XgsCA6GQcRIDzZZuj_f1-FhH4qVrhHLBql9Bb3cOkeGqFBQcP3Z3cjjmmj_TRtxhD0B7MNufVX_mQU/s1600/buzz1-511x540.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9_pBbEubUJ9FRWkdyfqYTDl-QhMFdLH9onCR1EwAWBkYcArSw_cndbbW08asT-XgsCA6GQcRIDzZZuj_f1-FhH4qVrhHLBql9Bb3cOkeGqFBQcP3Z3cjjmmj_TRtxhD0B7MNufVX_mQU/s400/buzz1-511x540.jpg" width="379" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheCcNoJiOhGkq6SPoba9eNj0NCkqnjnsyn2YcASq9HOPcaCxEyfc0Jhvvp6VVWjsP5WOJ8odDl1OOxR5fKsUjUY1FAg1JJB9K3SzxlF8IYXHGJgZGPeuBvFu90ucZXxnts7cISIj6OKEw/s1600/buzz1-511x540_errors.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="400" width="379" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheCcNoJiOhGkq6SPoba9eNj0NCkqnjnsyn2YcASq9HOPcaCxEyfc0Jhvvp6VVWjsP5WOJ8odDl1OOxR5fKsUjUY1FAg1JJB9K3SzxlF8IYXHGJgZGPeuBvFu90ucZXxnts7cISIj6OKEw/s400/buzz1-511x540_errors.jpg" /></a></div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com1tag:blogger.com,1999:blog-8492416005551532574.post-48411547012348740532012-08-26T10:44:00.003+03:002012-08-26T10:46:39.463+03:00Lance and Neil Armstrong: a Fraud ?<span style="background-color: white; color: #222222; font-family: arial, sans-serif; line-height: 16px;"><br /></span>
<span style="background-color: white; color: #222222; font-family: arial, sans-serif; line-height: 16px;">Wiki: In criminal law, a </span><em style="background-color: white; font-family: arial, sans-serif; font-style: normal; font-weight: bold; line-height: 16px;"><u>fraud</u></em><span style="background-color: white; color: #222222; font-family: arial, sans-serif; line-height: 16px;"> is an intentional deception made for <u>personal gain</u> or to <u>damage another individual</u>;</span>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZg3JwmEEoIl3rTD78NjABAkKJktxZlm-IPIjeSe8tm0ti_HEYUY94H8y0ugr7m-3Uepjpyz6ahpBTwL4B_2wFhVPl8ycKl8eDkZ7ttCbkv-_SCv4vNFYBxcyz3RsEB3e-6qc4Vm7nX9s/s1600/1751362_3_95d9_lance-armstrong-lors-du-tour-de-france-2001_fc18f2b3c949be678b4aaa4f70c71e25.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="160" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZg3JwmEEoIl3rTD78NjABAkKJktxZlm-IPIjeSe8tm0ti_HEYUY94H8y0ugr7m-3Uepjpyz6ahpBTwL4B_2wFhVPl8ycKl8eDkZ7ttCbkv-_SCv4vNFYBxcyz3RsEB3e-6qc4Vm7nX9s/s320/1751362_3_95d9_lance-armstrong-lors-du-tour-de-france-2001_fc18f2b3c949be678b4aaa4f70c71e25.jpg" width="320" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuYb_P4FX479q-zVdxYvrHIJH_dYn65Qa5bcFvJKFoecod-JuOePXmNC13Ab82mpJxKqb_NrtZEZcQiyctsM47LgjY_2N-EqLb9oTSYAvBKVrKEcfIFknAuCHniyML8D6ZsY2OGp8mTZE/s1600/1123056_3_ee7b_neil-armstrong-en-juillet-1969.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="160" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuYb_P4FX479q-zVdxYvrHIJH_dYn65Qa5bcFvJKFoecod-JuOePXmNC13Ab82mpJxKqb_NrtZEZcQiyctsM47LgjY_2N-EqLb9oTSYAvBKVrKEcfIFknAuCHniyML8D6ZsY2OGp8mTZE/s320/1123056_3_ee7b_neil-armstrong-en-juillet-1969.jpg" style="cursor: move;" width="320" /></a></div>
HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com6tag:blogger.com,1999:blog-8492416005551532574.post-71160419110110900672012-08-04T15:03:00.001+03:002012-08-04T15:03:37.764+03:00KTI : "Increased uncertainty related to housing prices”<span style="font-family: Courier New, Courier, monospace;">"Regarding the outlook for housing prices, some differing views have been presented recently. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" /></a><span style="font-family: Courier New, Courier, monospace;">According to some specialists, housing prices are likely to decrease due to the worsening economic outlook and tight financial markets. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw6wYHTtBYjWBUVR-ONfUBpzybe9_bDNAWnblE9CnWVpEJzeHvhq2EFeHimHNSDpqJftFjKNeQRP8CSIXVd-yfKf3xPNiRCNeOeH5SSzJ_8W3LwQ-rU0nK2-pKKEYyjMaBx3gDF20acpQ/s1600/up.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw6wYHTtBYjWBUVR-ONfUBpzybe9_bDNAWnblE9CnWVpEJzeHvhq2EFeHimHNSDpqJftFjKNeQRP8CSIXVd-yfKf3xPNiRCNeOeH5SSzJ_8W3LwQ-rU0nK2-pKKEYyjMaBx3gDF20acpQ/s1600/up.jpg" /></a><span style="font-family: 'Courier New', Courier, monospace;">Some others, however, estimate a clear increase in prices in the growth cities, due to the strong demand and continuous internal migration <b><span style="color: #38761d;">(1)</span></b>. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" /></a><span style="font-family: Courier New, Courier, monospace;">According to the forecasts of Pellervo Economic Research PTT, housing prices will decline by 1.8% in 2012. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw6wYHTtBYjWBUVR-ONfUBpzybe9_bDNAWnblE9CnWVpEJzeHvhq2EFeHimHNSDpqJftFjKNeQRP8CSIXVd-yfKf3xPNiRCNeOeH5SSzJ_8W3LwQ-rU0nK2-pKKEYyjMaBx3gDF20acpQ/s1600/up.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw6wYHTtBYjWBUVR-ONfUBpzybe9_bDNAWnblE9CnWVpEJzeHvhq2EFeHimHNSDpqJftFjKNeQRP8CSIXVd-yfKf3xPNiRCNeOeH5SSzJ_8W3LwQ-rU0nK2-pKKEYyjMaBx3gDF20acpQ/s1600/up.jpg" /></a><span style="font-family: Courier New, Courier, monospace;">The housing market is supported by the healthy Finnish banks as well as slight increase in household income <b><span style="color: #38761d;">(2)</span></b>. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" /></a><span style="font-family: Courier New, Courier, monospace;">However, there is a lot of uncertainty related to the outlook after 2012 </span><b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #990000;">(3)</span></b><span style="font-family: 'Courier New', Courier, monospace;">. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw6wYHTtBYjWBUVR-ONfUBpzybe9_bDNAWnblE9CnWVpEJzeHvhq2EFeHimHNSDpqJftFjKNeQRP8CSIXVd-yfKf3xPNiRCNeOeH5SSzJ_8W3LwQ-rU0nK2-pKKEYyjMaBx3gDF20acpQ/s1600/up.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw6wYHTtBYjWBUVR-ONfUBpzybe9_bDNAWnblE9CnWVpEJzeHvhq2EFeHimHNSDpqJftFjKNeQRP8CSIXVd-yfKf3xPNiRCNeOeH5SSzJ_8W3LwQ-rU0nK2-pKKEYyjMaBx3gDF20acpQ/s1600/up.jpg" /></a><span style="font-family: Courier New, Courier, monospace;">If the euro area’s crisis will be solved efficiently,that might stimulate the housing markets markedly <b><span style="color: #38761d;">(4)</span></b>. </span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZWIGqOmwfkx-mdejVrTsehzM_xU4DyVWiaZoOnJMT6M_-AEs_xZ1nyW__e5-FDmr7WHOdHd7iKtCGXEpETGkTRP06DKHhJjfaoe4JdpQbReAjJ3nM2sJwp8rmXSkaiuTkPndyB-_UR-M/s1600/down.jpg" /></a><span style="font-family: Courier New, Courier, monospace;">However, some specialists have stated that housing prices are not sustainable and thus include risks. <b><span style="color: #990000;">(5)</span></b>"</span><br />
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I extracted this text from a study done by "<span style="background-color: white; color: #282525; font-family: Arial, Helvetica, sans-serif; font-size: 15px; font-style: italic; text-align: right;"><a href="http://www.kti.fi/kti/doc/julkaisut/FPM12_net.pdf">KTI - High Quality Property Information</a>"</span> , 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.<br />
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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 ).<br />
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Anyway some comments:<br />
<b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #38761d;">(1) </span></b>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.<br />
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<b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #38761d;">(2) </span></b>Increase in household income? I have some doubt...<br />
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<b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #990000;">(3)</span></b><b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #38761d;"> </span></b>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.<br />
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<b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #38761d;">(4)</span></b><b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #38761d;"> </span></b>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...<br />
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<b style="font-family: 'Courier New', Courier, monospace;"><span style="color: #990000;">(5) </span></b>"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.<br />
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<span style="font-size: x-small;">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.</span>HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com10tag:blogger.com,1999:blog-8492416005551532574.post-37468815772483375252012-08-03T14:57:00.001+03:002012-08-03T14:57:41.079+03:00<div style="background-color: white; border: 0px; font: inherit; margin-bottom: 20px; padding: 0px; vertical-align: baseline;">
"<span style="color: #222222; font-family: Courier New, Courier, monospace; font-style: italic; line-height: 19px;">Central bank governor Erkki Liikanen said that Finnish authorities should consider granting housing loans for only part of the value of a property.</span></div>
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<i><span style="font-family: Courier New, Courier, monospace;">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.</span></i></div>
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<i><span style="font-family: Courier New, Courier, monospace;">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."</span></i></div>
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<span style="font-size: x-small;">Source: <a href="http://yle.fi/uutiset/bank_of_finland_governor_calls_for_cap_on_housing_loans/6241283?origin=rss">Liikanen</a></span></div>
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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).</div>
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But would authorities listen to liikanen? There are far too many interests (conflict of interests also?) for many players...so be it, let it all rise...</div>
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<br /></div>HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com30tag:blogger.com,1999:blog-8492416005551532574.post-27177975849361723102012-07-30T16:44:00.002+03:002012-07-30T21:22:47.145+03:00Negative 2Y Government Bonds<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjB1MjprERCDcGPRuO3La6nrC3yKYbzZYhWUK0XNPL1ck1o8JcPBRTUe95cs6T7oiobFhjf0_LF0GgCGa64GzEA6BVOO3c7NaScOE0ETDue0VeiXmUwnwvjZff_og80HL2MHXSgdQ4iL8I/s1600/2YRNegative.tiff" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="293" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjB1MjprERCDcGPRuO3La6nrC3yKYbzZYhWUK0XNPL1ck1o8JcPBRTUe95cs6T7oiobFhjf0_LF0GgCGa64GzEA6BVOO3c7NaScOE0ETDue0VeiXmUwnwvjZff_og80HL2MHXSgdQ4iL8I/s400/2YRNegative.tiff" width="400" /></a></div>
<span style="font-size: x-small;">Source: <a href="http://www.bloomberg.com/quote/GFIN2YR:IND">Bloomberg</a></span><br />
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Now the Finnish government is being paid to borrow <img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJQkZG3obl8a3Mi3bhpB4rlA3zyZ7kDTlqurKOGV5UFdX7eXfeeuGUW_SjuIgA33PSN13LdB84iNuLVX4PbVdiIONqlmGPc1LLwOO4Fy51x6PZPsNKS9wOnEe8uTN5ve_FxiOjrRCyChk/s1600/images.jpeg" />... that's not a joke(r)!</div>
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Looks like some investors are extremely scared on where to put their money (whether is it banks, stocks or other investments). They rather choose to lend that money to the government and pay a small interest in return of it to act as a safety box.<br />
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I could keep their money under my mattresses :-), although I suppose I don't have enough of them since there are plenty of wealthy distress savers...<br />
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For sure, they (investors, some wealthy well advised) see it coming and they invested in Gold (hence the record level), they also invested in real estate, commodities etc... now they are to scared as it could reverse faster than they will have time to recall their investment...<br />
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I suggest them, especially in Finland to continue putting their money in real estate (since bank only guarantee about 100 000 eur )...the wealthy (i.e saving greater than 0.5 million euro) should prop up the housing price to level that can be recorded in the Guinness record book for the housing price in Finland.<br />
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Unless everybody is right, investors are foreseeing financial armageddon in the next 2 years. Wouldthe depositor be ripped off in the same manner as they did during ex-ante Germany WWII... the answer in the hand of Mr Draghi... by an unfortunate (?) combination of events, central banks holds the key to this crisis - so Draghi, Bernanke will have to act right and fast.<br />
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<br />HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com3tag:blogger.com,1999:blog-8492416005551532574.post-28565202323846954192012-07-27T15:11:00.002+03:002012-07-28T11:40:22.951+03:00Exclusivity: Housing Price Will Fall ...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjv5UUDeK0DUVU2u2CRUrlAd93xK1FbG2XGQ-wpxRgDo8NOf0tRHYpIrkbnB2pRM6m8jKiFFOTCTpqXYljVVmbqOu6rkViEV3z8HMF6k5LPN0rtZa9MOuNgcSnIpcZv5OegsD8dFteXArY/s1600/pricewageanalysis.tiff" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjv5UUDeK0DUVU2u2CRUrlAd93xK1FbG2XGQ-wpxRgDo8NOf0tRHYpIrkbnB2pRM6m8jKiFFOTCTpqXYljVVmbqOu6rkViEV3z8HMF6k5LPN0rtZa9MOuNgcSnIpcZv5OegsD8dFteXArY/s400/pricewageanalysis.tiff" width="380" /></a></div>
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<span class="Apple-style-span" style="font-size: x-small;">Sources: <a href="http://www.tilastokeskus.fi/til/ashi/2012/06/ashi_2012_06_2012-07-27_kat_003_en.html">dwellings and earning levels</a> & <a href="http://www.tilastokeskus.fi/til/ashi/2012/06/ashi_2012_06_2012-07-27_kuv_005_en.html">real price index of dwellings old flat blocks</a></span></div>
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Finnish Housing prices will go down, it is a certainty, but by how much and until when?<br />
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Let's try to answer those questions by looking at the behavior between wages and housing prices in the past half century and let's try to envision potential scenario.<br />
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The top chart above shows clearly that when the wage line (level) goes above the prices of dwelling lines , a correction is due. The correction is severe when the wage level stays above the house price level for a long period (e.g. 1973-1979, 1989-1993, 2008).<br />
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<u><b>Scenario 1</b></u>: "Crash Begins"<br />
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Wages are sticky, they follow the inflation rates - no wage deflation in sight (Unions will always negotiate wages inline with or higher than inflation). Housing prices will have to decline drastically few consecutive months or year, in order to bring new buyers and make the price rise again (usually pretty fast, when both the economy start to grow and price are relatively cheap).<br />
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Also see related link to this scenario: <a href="http://housingfinland.blogspot.fi/2012/03/22.html">-22%</a><br />
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<u><b>Scenario 2:</b></u> "The Dark Night"<br />
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At first housing price correct and wages stay sticky, but union power weakens and the industry manage to reduce the rate of wage inflation to even bring it negative. Housing does not grow, or painfully decrease slowly, very slowly year after year ... the housing market go through a long and painful dark period of stagnation with no growth or below inflation for few years.<br />
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<b><u>Scenario 3:</u></b> "The boring bat"<br />
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No comment: Wage and housing price follow the inflation rates which hoover near record low (but not negative)HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com0tag:blogger.com,1999:blog-8492416005551532574.post-33045419566318553632012-07-06T19:50:00.000+03:002012-07-06T19:50:58.236+03:00Deflation, deflation...<div class="separator" style="clear: both; text-align: center;">
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The ECB lowered interest rates to a level not witnessed since...maybe the big bang. In the meantime, the 2 years Finnish government bond collapses to nearly zero level, highlighting how frightened the market is, searching to secure and park their money into what appears a safe heaven.<br />
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Don't expect inflation for at least the next 2 years, we are and will be in a deflationnary mode.<br />
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So what happen to the housing price?... to be frank, it will be crazy in the current period to buy any housing, not only prices are disconnected with reality...<br />
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As someone put it, you don't need to buy the cow to drink milk in the morning.<br />
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So as renter, I frankly wake up relaxed, not having a debt hanging over my head for the next 20-30 years or having and A.....e landlord as a banker (i.e charges/interest paid to them).<br />
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<br />HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com5tag:blogger.com,1999:blog-8492416005551532574.post-29708717263120654302012-03-04T17:00:00.005+02:002012-03-04T22:18:57.471+02:0022%<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrbDV3N1P1VzQOf5cr4eRovm02fEJbXU6Md0G4a4BoI-2s4ZR8rKcRhHfT7hl6_eMIgXVC8t7s4HCFHb2oWmvPBlKsIV_XmT1xqj8iGF2WGMGky9sBNHCnSgrb0jeqyLpIwh0vfMBeszM/s1600/FinlandOvervalued.tiff" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 392px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrbDV3N1P1VzQOf5cr4eRovm02fEJbXU6Md0G4a4BoI-2s4ZR8rKcRhHfT7hl6_eMIgXVC8t7s4HCFHb2oWmvPBlKsIV_XmT1xqj8iGF2WGMGky9sBNHCnSgrb0jeqyLpIwh0vfMBeszM/s400/FinlandOvervalued.tiff" border="0" alt="" id="BLOGGER_PHOTO_ID_5716057030148251970" /></a><br /><div style="text-align: center;"><span class="Apple-style-span" style="font-size:85%;">Source: <a href="http://www.businessinsider.com/the-most-overpriced-housing-markets-in-the-developed-world-2012-2">Business Insider</a></span></div><div><br /></div><div>Pretty conservative, when you know the overall difference between the region in Finland ( i.e price are inflated more in some region than others e.g. Helsinki Region/Uusimaa) and all the financial mortgage tricks that have been used to distort the real price (rented land, housing company debt, and of course massive sensitivity to short term rates etc...).</div><div><br /></div><div>22% I'd rather say that it is the first target and is the minimal for a normal readjustment. I will add another 10-20% to have a more realistic level... the target is still to come back to 2003 levels (as it is happening in the US, basically when the global synchronized housing bubble started). In fact, it can overshoot to reach the 1998 level (but this is more a long term target e.g. the Japanese style)</div><div><br /></div><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaLUZLQv347hpa8M4sMNNnTSm3si7PtspCV2EiT4_Tz9mYEt7BfZvy0uOsDlUHnQyHhYhzGibAOFIztA6h1IbkQ0JPKFnAS_V1nqa7ezCDsAr5e3C-J1sQwL5M0cY-_zoBQELq0laJisA/s1600/PredictionHF_03_2012.tiff" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 169px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaLUZLQv347hpa8M4sMNNnTSm3si7PtspCV2EiT4_Tz9mYEt7BfZvy0uOsDlUHnQyHhYhzGibAOFIztA6h1IbkQ0JPKFnAS_V1nqa7ezCDsAr5e3C-J1sQwL5M0cY-_zoBQELq0laJisA/s400/PredictionHF_03_2012.tiff" border="0" alt="" id="BLOGGER_PHOTO_ID_5716068672075447058" /></a><br /><br />My prediction (c) HousingFinland based on <a href="http://www.tilastokeskus.fi/til/ashi/2011/12/ashi_2011_12_2012-01-27_kuv_005_en.html">the current situation</a> ... the dice is rolling ...HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com13tag:blogger.com,1999:blog-8492416005551532574.post-11794755218774011682012-01-28T10:40:00.006+02:002012-01-28T11:05:44.115+02:00Prices of dwellings fell in December<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9-pxvgFJRSN6v34uBZivEUwZvboqaKsvfc03LkZops66NysjPZAqn_4neYsnozuzrnF6ygLapXPqA_vrvK2I50mZcbVTbwJHi-5edH7pgTFrNh-nAWigRjVWcF0t9z75sFajcIyDNETA/s1600/ashi_2011_12_2012-01-27_tie_001_en_001.gif" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 246px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9-pxvgFJRSN6v34uBZivEUwZvboqaKsvfc03LkZops66NysjPZAqn_4neYsnozuzrnF6ygLapXPqA_vrvK2I50mZcbVTbwJHi-5edH7pgTFrNh-nAWigRjVWcF0t9z75sFajcIyDNETA/s400/ashi_2011_12_2012-01-27_tie_001_en_001.gif" border="0" alt="" id="BLOGGER_PHOTO_ID_5702600140894869698" /></a><div><div style="text-align: center;"><span class="Apple-style-span" style=" ;font-family:arial, verdana, lucida, helvetica, sans-serif;font-size:small;"><p class="kuvio" style="font-family: arial, verdana, lucida, helvetica, sans-serif; font-size: small; margin-top: 1em; margin-right: 1em; margin-bottom: 1em; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-weight: bold; ">Development of prices of old dwellings by month, index 2010=100</p></span></div><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMq8i4Rpznrfc1_58sqOU_rdT7U23GKpr7yR0kkpoHcjo8yb5cUHG2bVsEO0rsrFINiLzV9GGJJ16XFKvzOmei9QkJfiEqSUeWWtO5J8ewoXU8XkIf_dpDUQTdIpF5rhUxaLtt5aKOmyA/s1600/ashi_2011_12_2012-01-27_tie_001_en_002.gif" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 246px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMq8i4Rpznrfc1_58sqOU_rdT7U23GKpr7yR0kkpoHcjo8yb5cUHG2bVsEO0rsrFINiLzV9GGJJ16XFKvzOmei9QkJfiEqSUeWWtO5J8ewoXU8XkIf_dpDUQTdIpF5rhUxaLtt5aKOmyA/s400/ashi_2011_12_2012-01-27_tie_001_en_002.gif" border="0" alt="" id="BLOGGER_PHOTO_ID_5702600080482301714" /></a></div><div style="text-align: center;"><span class="Apple-style-span" style=" font-weight: bold; font-family:arial, verdana, lucida, helvetica, sans-serif;font-size:small;">Development of prices of old dwellings, index 2005=100</span><span class="Apple-style-span" style="color:#0000ee;"><u><br /></u></span><br /></div><a href="http://www.tilastokeskus.fi/til/ashi/2011/12/ashi_2011_12_2012-01-27_tie_001_en.html"><span class="Apple-style-span" style="font-size:85%;">Source: Statistics Finland</span></a><br /><br />What is important is to see if a downward trend has really started. In all cases the upward trend has been broken as it did during 2009 in the midst of the financial crisis. Wait and see...<br /><br />So the ECB averted a serious credit crunch in the last quarter of 2011. Again, is it just delaying the inevitable? In the meantime, Euribor is falling, again providing some oxygen in the housing market, but for how long ? (2014 as suggested by the Federal reserve, the American ECB)?<br /><br />Coming back to the Finnish housing market - we will see a readjustment in prices at least due to sellers coming back to reality and understanding that the demand is shrinking while first time buyers are priced out.<div><br />Another interesting chart, is the wage versus housing price which shows you a disconnect in 2010. That tells to me, that we will have at least 2 quarters of readjustment - if wages stay stables which is not fully granted...<br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8iRG_7wyxnmqOus3t9ALucLXsUXz4ZQ23Ow66a7xdKd2B26u1K4v57hppWAre-xGD979lMvWlYKW21l0Z7i12-9aFcx_GSYmHi9woza5bBhMKuHWO5oP3Pk484fo9QA6cFohr0qx3wEQ/s1600/ashi_2011_12_2012-01-27_kat_003_en_001.gif" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 246px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8iRG_7wyxnmqOus3t9ALucLXsUXz4ZQ23Ow66a7xdKd2B26u1K4v57hppWAre-xGD979lMvWlYKW21l0Z7i12-9aFcx_GSYmHi9woza5bBhMKuHWO5oP3Pk484fo9QA6cFohr0qx3wEQ/s400/ashi_2011_12_2012-01-27_kat_003_en_001.gif" border="0" alt="" id="BLOGGER_PHOTO_ID_5702604337801227762" /></a><div><div style="text-align: center;"><span class="Apple-style-span" style=" font-weight: bold; font-family:arial, verdana, lucida, helvetica, sans-serif;font-size:small;">Year-on-year changes in prices of dwellings and in wages and salaries</span></div><div><br /></div><div>Note, also that prices have kept going up since 1993 with minor correction along the way. Also Since 1974, percentage change in Wages have been declining. The only time we did not have any growth was in 1992 and 1998...are you going to see the same phenomenon or worse a new one: wage deflation? </div></div></div><div><br /></div>HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com7tag:blogger.com,1999:blog-8492416005551532574.post-59241856681213485192012-01-21T11:38:00.004+02:002012-01-21T15:05:28.033+02:00Finnish Household Debt and Income: Alarming Signals<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNP5YvopF3DQSNp_gGSupu7nVCM2VX0JWWDd8xTR6RLTp0jLq77i9vwcDmxkAurHWZJRuvw0DYAvBMhTUWclxZM-btJiCCZ85LrCVEn6y7lmzd-cuZ_gCFRjNjCaRwI6Q9RicksO5Hr54/s1600/velk_2010_2012-01-20_tie_002_en_001.gif" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 375px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNP5YvopF3DQSNp_gGSupu7nVCM2VX0JWWDd8xTR6RLTp0jLq77i9vwcDmxkAurHWZJRuvw0DYAvBMhTUWclxZM-btJiCCZ85LrCVEn6y7lmzd-cuZ_gCFRjNjCaRwI6Q9RicksO5Hr54/s400/velk_2010_2012-01-20_tie_002_en_001.gif" border="0" alt="" id="BLOGGER_PHOTO_ID_5700017389829326034" /></a><div style="text-align: center;"><span class="Apple-style-span" style=" ;font-size:small;"><b>Rates of indebtedness of indebted household-dwelling units by age group 2002-2010, %,</b></span></div><div style="text-align: center;"><span class="Apple-style-span" style=" ;font-size:small;"><b><a href="http://www.tilastokeskus.fi/til/velk/2010/velk_2010_2012-01-20_tie_002_en.html">source: www.stat.fi</a></b></span></div><br /><br />The chart above was extracted from a nice article from Statistics Finland. The article start with a sentence that put the tone on a very important subject: indebted household due to large housing mortgage. <br /><br /><blockquote><span class="Apple-style-span" style="font-family:'courier new';">"During a decade, household-dwelling units’ debts have gone up by clearly more than their income."</span></blockquote><br /><br />Also, you will notice that the debt level among the 30-39 years old is at an alarming level and has been rising steadily without any disruption since at least 2000 - the 2008 crisis had only a minor impact, just slowing the progress, not stopping it.<br /><br />What to think? well clearly we at unsustainable level where any shock could weaken the financial situation of household - especially those who are counting on an ever increasing housing price or on low interest rates.HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com6tag:blogger.com,1999:blog-8492416005551532574.post-40699702731347669242012-01-13T18:40:00.001+02:002012-01-13T18:42:41.521+02:00France Downgraded...<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6JsceKni4L6OZtSGJtE6lFrrGuocIuP_nyMpwTuiA9asRJS8MHJfWDeKcHGPjygazMAwjbR5cm0LabPUmm6XbuwvTVMsfjfcnAHyIvbwT04URwr8s6ZaN_Cs5RWVT4Vy8p-kg0F4ugoA/s1600/nap6.jpg" onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 310px; height: 320px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6JsceKni4L6OZtSGJtE6lFrrGuocIuP_nyMpwTuiA9asRJS8MHJfWDeKcHGPjygazMAwjbR5cm0LabPUmm6XbuwvTVMsfjfcnAHyIvbwT04URwr8s6ZaN_Cs5RWVT4Vy8p-kg0F4ugoA/s400/nap6.jpg" border="0" alt="" id="BLOGGER_PHOTO_ID_5697157741470158722" /></a><br /><br /><a href="http://www.cnbc.com/id/45986372">France Downgraded by S&P</a>HousingFinlandhttp://www.blogger.com/profile/11208457813231210207noreply@blogger.com3