Monetary Roundup - Eliminating "The Noise"

I thought it was good time to clarify some views on the monetary policies in Europe and around the world - as it is key to the housing market and will tell us whether or not policy makers are serious on fighting inflation.

In simple world, would policy makers allow a repeat of the 1970's period, where debt burden was somehow reduced by allowing high inflation to take place. For me the answer is "NO", I think we will head to period more like the beginning of 80's or 90's where asset price deflates to readjust to people's income as opposed to the contrary where income readjust upward to the asset level (i.e. 1970's).

In Canada, where a speculative bubble has developed in the housing market have started to tighten their rates :

"The Bank of Canada raised its key interest rate from a record low today, the first Group of Seven country to do so since last year’s global recession, and said further moves will be “weighed carefully” against future growth in Canada and elsewhere.", 01.06.2010 - Bloomberg

In the US, where the housing bubble has deflated in the past years and where usually the readjustment take place first, are starting to hint the exit strategy:

“In the medium term, like the Federal Reserve and many other central banks, the Bank of Korea will have to manage its exit from accommodative policies,” Bernanke said in pre- recorded remarks to a conference hosted by South Korea’s central bank in Seoul today. The Bank of Korea “will have to weigh the risks of a premature exit against those of leaving expansionary policies in place for too long,” 31.05.2010, Ben Bernanke

While the Fed will raise interest rates from a record low before the economy returns to “full employment,” Bernanke said officials don’t know when that process will start. The banking system isn’t fully healthy and lenders are “cautious” in providing credit, he said.

In Europe, the president of the European Central Bank, Mr Jean-Claude Trichet, is on communication campaign, making sure that the latest move by the ECB (huge guaranty for Greece and co) are not mistaken for a relax stance on inflation or misled with a Quantitave easing strategy.

Interview with Jean-Claude Trichet, President of the ECB,
conducted by Gerald Braunberger and Stefan Ruhkamp on 19 May 2010

FAZ: But by purchasing government bonds, you’ve crossed a red line. Has the credibility of the ECB suffered as a result?

Trichet: There has been no crossing of any line. Our line is price stability, and our credibility is derived from achieving this objective over the medium term. The Governing Council of the ECB observed that the effectiveness of the transmission mechanism for our monetary policy was being severely hampered. We are not increasing the money supply. By contrast with what other major central banks have done, we are not purchasing government bonds in order to inject liquidity into the markets. What we are doing is fundamentally different: we sterilise. We ensure an unchanged stance of monetary policy. This is why the liquidity supplied is immediately being absorbed again in its entirety. We have to do whatever we consider appropriate in order to ensure price stability. If we always listened to the criticism directed at us by politicians, social partners and financial pressure groups, we would be unable to fulfil our mandate.

FAZ: The crisis stems from excessive debts. We are now fighting the crisis with even more credit and even more money. How do we get out of this spiral?

Trichet: We have a number of ways of providing the banks with additional liquidity support, which will automatically be discontinued when the situation improves. Owing to the serious tensions observed very recently in the markets, we have now reintroduced some of these support measures. But you can be sure that we will exit those measures in a timely fashion in line with improvements in the functioning of the markets. We will never lose sight of our primary mandate of ensuring price stability over the medium term, with the right monetary policy stance. There is a clear separation here. By the way, note that the growth of the monetary aggregate “M3” is currently negative. I have been committed to price stability all my life. For me, inflation is a tax that would mainly hit the poorest and weakest in our society.

Another interesting interview:

Interview with Der Spiegel
Interview with Jean-Claude Trichet, President of the ECB,
conducted by Thomas Tuma and Christoph Pauly on 13 May 2010

SPIEGEL: In a talk he gave to the Spiegel a few months ago, Jürgen Stark, the ECB’s chief economist, said that the ECB was not permitted to buy government bonds. Who is right?

Trichet: I have already said that this is explicitly authorised by the Treaty. Over the past 11 ½ years, we have ensured price stability in Europe and have successfully met our target of keeping inflation below, but close to, 2%. We have done a good job fully in line with what the best central banks in Europe were doing before the euro. Those who believe - or, even worse, are suggesting - that we will tolerate inflation in the future are making a grave error. The Governing Council of the ECB did not hesitate to increase rates in July 2008 in a period of financial turbulence in order to ensure price stability. We were criticised at the time by the markets. This is a measure of our inflexible determination.

SPIEGEL: But the banks, too, are being spoilt by the ECB. As part of your so-called non-conventional measures, you have again made it possible for them to borrow countless billions. In doing so, are you not handing out even more play money to the financial markets?

Trichet: Again, we do what we believe we have to do in all consciousness in order to be able to deliver price stability over the medium term. We do not take into account pressure groups and lobbies. We supply liquidity to the banks so that they can finance the real economy and support the recovery, they know that.

What Has Really Happened?

Strangely enough - more I talk to people about the housing market and more I get statement such as "the market is behaving normally", "I told you so, price are going higher". Of course, for not a moment, they think that price could stop from going higher or claim that if price were to adjust lower (be it, a single or half digit drop - they can only assume that as a temporary phenomenon, since price will, undoubtedly, resume higher -as they have always done). In addition, the most sceptical of all, will think that housing could correct, however deep downtheir heart (maybe brain too), they do not believe in that scenario for a second.

Now - Without being the one trying to ruin the party - it's time to remind that we are really in unchartered territory with regard to the economy as a whole and to the housing market in particular. A bit like when water reach the boiling point, any solid argument in favor of a sound economy and robust markets (stock and housing) can be pulverized into nothing... actually as a sign, all the digits of 100 degres celsius appear in the yeat 2010 (at this moment you should hear in the background a soft and delicate music to make it a bit like melodramatic)

Right - Let's go to the point - by having a fresh look at the chart above, the housing market chart as produced by statistics Finland, you suddenly notice a very strange phenomenon. a V shape (in some culture it's pretty vulgar, in some it's a sign of victory... for me it's the sucker smile ...)

So- How can price could go down and up so fast? after all, unemployement didn't shoot up in a matter of a quarter, in the same line employement didn't resume upward in the meantime. On top of that, there was not - yet- a massive wave of selloff and banks were and are still lending.

I have some idea, but I ask you what could explain this sudden drop and rise? this could be the key on when the trigger that will lead to double digit historical correction that will dwarf any other housing crashes.

Stock Market Collapse, wooww?

Yesterday, the market collapsed withing seconds by almost a thousands points or 10% , a phenomenon not see since 1987 . While it recovered most of its loses, intraday, one cannot dimiss the importance of such event.

Either it is trading error that cascaded into a "heavy sell" snow ball effect or is it in any case selling and getting out of the market as soon as possible after a very powerfull rally.

In all cases, the economical situation in Europe and globally does not warrant complacency and the risk of a deterioration both economically and politically has never been so high in the past 20 years or more.

Taking huge debt in this situation, at the current moment in time... is just foolish.

Finnish Housing Bubble - April 2010

"Compared with the corresponding period of the year before, prices went up by 11.3 per cent in the whole country. In Greater Helsinki the growth amounted to 15.7 per cent and in the rest of the country to 7.7 per cent."Statistic Finland, 30 April 2010

The words of the eighteenth-century Anglo-Irish philosopher, Edmund Burke, set the context and put a parallel between 1990 and 2010:

“Those who don't know history are destined to repeat it.”


Let's try to evaluate the arguments that could support 1- the existence of an housing bubble or 2- on the contrary, arguments in favor of a correctly priced housing market.

1- Arguments for the Finnish Housing Bubble

First of all there are many compelling reason that we are currently witnessing a bubble of the same of bigger size that the one in the 1990's.

From an economical perspective

The reality was that in 1990, the economical prospect for the world economy was more brighter than it is today. The globalization was at its enfancy and the prospect were huge - it was the propeller for the "rich" country.

Today, the emerging markets - mainly China, India and Brasil are overheating and the risk of their economy to encounter a substantial recession is very high (see the following article demonstrating the irrational exuberance of the Chinese housing market that could hit substantially their financial system or internal consumption: Chinese Bubble about To Burst). India monetary policy has also been far to loose combine with massive capital inflow threaten to destabilize their economy (see article : India Capital Control) .

In the previous recession, Finland managed to get rapidly from its recession thanks to the vigour of the world economy as well as its tremendous positionning on the technology front. It was most probably not politically/policy driven but due to the know-how supported by strong enterprenorship that developped during the 80's.

Today, the same miracle try to be re engineeered by the state supported by policies toward the energy sector - the clean energy bet. In fact, it is mainly driven to rescue a dying forest industry that is shedding jobs at speed light. In any case, it is an overcrowded market where only few players will rip most of the benefits - it is no clear as of today, the outcome of those policies.

From a monetary perspective
Interests rates have been falling in the past 20 years, to record 1%, an all time low.
This has pushed asset price higher and higher as there was little incentive to save.

However, it is without doubt that we have at hand an historical low for the European interest rates and it is not hard to forecast that in the next few years, the probability to have higher interest rates is very high - one would not be surprised to see at least 8% at some point especially if the Euro weakens due to the current European crisis that has just started and that will most probably let long lasting scares from a monetary and economical view point.
The amount of drawdown for housing loan is far below the record reach in 2008 which coincidate with the first high before a correction took place. While the trend in price resumed higher, following an exponential growth similar to the one in the year 1990, it is not marked by a new high in loan drawdown- to me it looks like a speculative move, hence I urge to be very cautious as we may have reached an historical high (a muilti generation high?).

Other reasons could explain this sudden rise in housing price:
-fear of the banking system, investors with capital that exceed the guarantee feel safer to invest in housing than trusting the banking sector.
-fear of very high inflation due to an exceptionally accomodative monetary policy
-shift from pensionner toward small accomodation (1 room flat) - those quite easely push price per meter square very high. There are evidence that construction builders have been focusing on building very small dwellings.

From a population perspective

We are dealing with a completely different population characteristics that will be marked by huge amount of retiree that will in the years to come flood the market with housing whilst the population size is merely stabilizing (the birth rate being under 2).

In addition, rising unemployment and reduced immigration due to economical prospects can only worsen the situation.

From a consumer sentiment perspective


The consumer confidence is at level similar to the pre financial crisis - that is to say that confidence is again at almost record high for this decade.

From this point, it is easy to imagine that a reversal will happen - which obviously will be an indication of weakness either in the economy or housing market.

Conclusion:

We have had unprecedented fiscal and monetary stimulus in the past year which objective was to stabilize an economy that was contracting at a very rapide pace.

This resulted into distorting many asset markets (stock market , housing market). While in many advance economy the previous peak of 2008 has not been reached, Finland on the contrary has gone even higher - this is could be partly explained by the fact that 98% of Finnish mortgage rate are linked to variable rates.

2- Arguments in favor for the rational in the current price increase and level

One of the neighbourg, namely Russia, has tremendous economical potential that could boost the export industry and allow to keep employement in check. (however, demography is an issue in Russia, also the country is mainly energy dependent - if a shock were to happen in the global economy, then the Russian economy could do particularly badly as witnessed in 2008)

Wage have been growing steadly with the Union having negotiated high wage in the past 3 years (however, current negotiation clearly highlight a weakening position with very low wage growth for the next few years. In addition, due to the acceleratio of wage growth, the country has become uncompetitive, pushing further delocaliation in key sectors (IT, Forest, Shipping Industries etc..))

Interest rates could stay low for a longer period sutaining the current price.

Inflation could show is head especially in Finland if the European Central Bank focus its monetary policy tuned for the country in the South (Greece, Spain, Portugal) or the biggest economy such as Germany, French and Italy. (This will further hurt the Finnish competitiveness and could also result in higher than usual strikes combined with social tensions)

Greece, Portugal and Wonder(Fin)land ...

"With government debt across the world soaring, the man who predicted the credit crunch is predicting a reckoning.

"The recent problems faced by Greece are only the tip of a sovereign-debt iceberg in many advanced economies,” Said Roubini, 27 April 2010

We know that Advance economies have been pilling up debt in the past 20 years - Finland is no exception with a blip in 1990 that just slowdown a phenomenal leveraging of the system where the debt burdened citizen was at its center and that is now shifting to states.

In the past few years, I have been asking myself, how would that end - as it is not clearly sustainable. The answer has never been clear as policy makers have always pushed the outcome - delaying and worsening the core issue and making it worse each time.

So now, not only the public but also states have unsustainable debt -especially when considering the economical outlook and retirement tsunami, when looking forward.

-Today we got a hint of what could happen-

Yet, there is a land on this planet where its citizen are either on pills or drawn into media disinformation - a kind of wonderland: Finland - just have a look to the following picture:

Consumers' expectations concerning their own and Finland's economy in 12 months' time 10/1995-4/2010

It is either due to an ever growing irrational , exuberhant housing bubble that makes people feel wealthy associated by historically low interest rates that reinforce the impression of wealth - and of course supported by bankers that keep on adding fuel to the fire...

So we are not far from the beginning, where reality catch up and where we will suddenly realize that the current housing "ponzi" system is based on illusion and that in any months it could reverse for years or decade to come. - Any opinion on the reverse view, please give your aguments-

And let me finish with those words taken from a speech of Jean-Claude Trichet - ECB president :

At the outset of this quest, it is worth remembering the words of the eighteenth-century Anglo-Irish philosopher, Edmund Burke: “Those who don't know history are destined to repeat it.”

... people have already forgttent the outcome the financial crisis in 1990's in Finland where fast and massive credit expansition was allowed by banks and pushed household to very high debt burden that ultimately pushed the banking sector to its knees. Borrowing in foreign currencies was also one the recipient of disasters, have a look to that particular article published in the Financial Times...

Signs

"...when to start tightening monetary policy... :

1. Don't wait too long, especially if the signs of recovery are apparent and interest rates are at very low levels. The sooner tightening starts, the less tightening might be needed later on.

2. To be sure, don’t wait to see inflation rising before raising rates. It will be too late.

3. Use a wide set of indicators and arguments to explain to market participants and the public at large why tightening is needed. Money and credit aggregates, asset prices and the level of interest rates might be useful indicators of why the time has come to reduce accommodation.

I leave it to you to judge how valid these recommendations are for the current conjuncture.", Bini Smaghi

I don't know why but when I read the paragraph above, I read it as a clear signal that the ECB is preparing to tighten the monetary conditions...not because we have a robust and sounds growth in Europe - far from that - but simply because of external factors that may force the ECB to raise interest rates earlier than anticipated in order to anchor inflation expectation.

What are the external factors?
- an imminent reevaluation of the chinese currency,
- a rise of the oil price (more than 70% in a year),
- and overheating of the new world engine: the emerging markets.

Would the ECB allow to let inflation go out of control - as some suggest - in order to reduce the burden of debt on European states? let's get the answer for the future ECB president (2011) - jurgen Stark:

"let me stress that any call to reduce the real value of public debt through higher inflation will be firmly opposed by the ECB. A low and stable level of inflation is a prerequisite for confidence, stability and sustainable growth."

"most prominent global bubble in generations" ?

"The house price bubble, the most prominent global bubble in generations, was caused by lower interest rates but...it was long-term mortgage rates that galvanized prices, not the overnight rates of central banks, as has become the seeming conventional wisdom," Greenspan on Bloomberg, 07 Apr 2010

... "Imagine all the people" , 98% to be precise of all Finnish mortgage are linked to variable interest rates which are at historical low level, what kind of bubble we have currently at hand...

Following the same line as ex-Fed president Greenspan, we may be observing the biggest bubble ever created and witnessed in generations...

oops I feel the earth trembling under my feet...

Biggest Threat, Inflation or deflation?

The FOMC said in its statement last month that the recovery “is likely to be moderate for a time.” Low rates of resource use and subdued inflation “are likely to warrant exceptionally low levels of the federal funds rate for an extended period,” their statement said. Central bankers have used the “extended period” phrase in statements since March 2009.

“such forward guidance would not limit the Committee’s ability to commence monetary policy tightening promptly if evidence suggested that economic activity was accelerating markedly or underlying inflation was rising notably.”

This information is coming from the minute released by the US Federal Reserve...

To my view it clearly shows that they will not allow high inflation to emerge - they have tool for that, increasing interest rates however it seems that they still fear the deflation threat which is still in the pipeline since it is much harder to fight...

So no high inflation or hyper inflation coming... In the worse case, if they have underestimated the recovery and the inflation threat, they could react the way they did in the late 80's, raising rates to very high level...

However I still think that we are heading (especially in Europe) to much more troublesome economical time ahead which will warrent low rates (something that could look like a japanese scenario or a German one with regard to the economical situation, interest rates and value of housing)

Finnish Sterling Bond

Finnish sterling bond issue leads trend

By David Oakley

Published: March 22 2010 18:22 | Last updated: March 22 2010 18:22

Finland has issued the first sterling bond by a government outside the UK in six years as record levels of debt make it harder for sovereigns to attract buyers in their domestic currencies.

The Finnish deal, which saw twice the demand for the £500m ($754m) raised, may pave the way for more similar transactions as other eurozone governments seek to diversify and attract new pools of buyers.

Myles Clarke, head of bond syndicate at RBS, said: “Countries such as Finland are looking to diversify and find other investors as issuance in eurozone debt rises sharply. This is a trend that is likely to continue.”

Finland paid only 3 basis points over the sterling London interbank offered rate in a five-year floating rate deal. This was cheaper than raising money in euros because of attractive terms in the basis swaps market. Finland immediately swapped the money raised back into euros, but at a cheaper rate.

A large chunk of the demand came from British investors, such as pension funds, Swiss retail investors and central banks. This is a different pool of investors to those who would typically buy Finnish bonds denominated in euros.

So far this year, three eurozone governments – Belgium, Italy and Portugal – have issued debt in dollars, with expectations that Germany, France and Spain are preparing to raise money in the US currency over the coming weeks.

With a record €1,000bn ($1,355bn) in issuance expected from eurozone states this year, sovereign debt managers are increasingly looking at different regions to attract buyers in a crowded marketplace. Last year, Germany, Spain, Belgium, Austria, Italy and Portugal launched dollar-denominated deals.

Barclays Capital forecasts that up to $20bn will be issued in dollars by eurozone countries this year compared with $12.5bn last year, $7.6bn in 2008 and only $2bn in 2007.

Although European governments are likely to choose the dollar for fund raising, the Swiss franc, the yen and sterling are also being considered.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.


http://www.ft.com/cms/s/0/66d9a250-35de-11df-aa43-00144feabdc0.html

"Old Europe"...The Finnish side in a picture

Number of persons aged under 15 in Finland’s population in 1875–2009

According to Statistics Finland, the number of persons aged under 15 in Finland’s population is the lowest in over 100 years.

This post should be put into context with what was said in a previous post: "Population Perspective"

"Red light" for the Housing Market

"IN 1625, Pieter Fransz built a house in Amsterdam’s new Herengracht neighborhood. As the Dutch Republic rose to global power in the 1620s—with Amsterdam developing the world’s first major stock market as well as commodities and futures markets—the price of the house doubled in less than a decade.

Over the succeeding three centuries, the price of Fransz’s house was knocked down by wars, recessions, and financial crises and rose again in their aftermaths (Shorto, 2006).

When the house changed hands in the 1980s, its real value, that is after inflation, had only doubled over the course of 350 years––offering a very modest rate of return on the investment."

"From a historical perspective, it is not the trend but the volatility in housing prices that is distinctive"

"Starting in the late 1990s, prices of houses in Herengracht, and more generally in Amsterdam, doubled in value in 10 years, only to begin another sharp decline. This recent run-up and correction in prices in Amsterdam was part of a global boom and bust in house prices.", loungani, March 2010

A good lesson can be draw out of this article - After all it's all about equilibrium, what goes above or below its long term average tend to correct toward it. Somehow this what I have been suggesting all along in this blog see this post.

1- The ostrich effect


I think humans somehow behave like ostrich, they derive a strategy based on a very limited amount of information and tend to extrapolate it: like the ostrich that put its head in a hole and thinks it's safe...

Instead, this blog try to give you a eye bird view, a 10 000 mile view that allow you to see the whole picture... at least not to become an ostrich.

2- The FeedBack Effect

"One reason house prices go up so rapidly is that the supply of housing cannot be adjusted quickly.

Another reason lies in the interaction of housing and financial markets. Because houses serve as collateral, an increase in house prices can have a feedback effect: once collateral values increase, banks are willing to lend even more to households, which feeds the house price boom.

This feedback effect can arise regardless of what caused house prices to go up in the first place—demand momentum, government policies such as low interest rates, or institutional changes that increase the availability of mortgage credit."

We are spot on with regard to the causes and the effect it created. Clearly the mortgage market grew faster than the supply of housing , then the wealth effect took hold pushing price higher and higher in a similar fashion as in the musical chair game; when the music ends, one is set to lose and lose big in this case.

3- The conclusion

"First, house prices in most countries still remain well above the levels observed at the beginning of the upturn in the early 2000s. Second, house prices remain above rents and incomes, which, as discussed above, often serve as long-run anchors for prices. (...)

"That leads to an uncomfortable conclusion: house prices in many countries still have room to fall."

I think it is clear that from this point any rise in housing price is only strenghtening the case for the current housing bubble, but more worryingly bigger it grows, more damage will be inflicted to the economy.

Higher inflation, A "Stark" View ...

"... While I do see the temptation for governments to ask for higher inflation in order to monetise the dramatic build-up of public debt, let us not forget that it serves to expropriate the income and wealth of the general public to the benefit of those who have lived beyond their means.

I can only reject the idea of raising inflation rates permanently. I would not like to imagine the consequences if, on top of the current financial fragilities and in an environment of high public debt, the general public were to lose trust in the purchasing power of money..." ,Jürgen Stark

This guy is a member of the Executive Board of the ECB (European Central Bank) and will most probably succeed Trichet as the next president of the ECB in 2011...which is reassuring, in term of inflation fighter thus will not allow a 70's type high inflation scenario (which is anyway not possible due to the population and growth configuration supported by a more globalisation business model).

So what? ... one will dare to say, somewhere in the background...

High debt, growing debt is unsustainable and it is what the current housing market is suggesting to do and so is the current way of living ... "beyond their means"...while salary are deflating or at best stabilizing ( stabilizing which is inconsistent with the current economical climate - one will discover that in the year or two to come)

Historical ...slump

"The Finnish economy experienced a decline last year that is deeper than any that has taken place in any single 12-month period since the Civil War which followed the country’s independence.

According to figures put out by Statistics Finland, total production in Finland declined by 7.8 per cent last year.

Only in 1917-1918 has total output declined by more.

Not even in the economic crisis of the 1990s, nor in the Second World War, did the Finnish economy fall as steeply in a single year as it did in 2009... read the rest@ hs"

... Not sure what will be the price to pay for that in the years to come... Any idea?

"... Meanwhile, Finland’s Minister of Labour Anni Sinnemäki (Green) said on Monday that she hopes that unemployment in Finland will peak by the middle of this year.

“If this does not happen, and if it does not peak until next year, we will be in serious trouble”, said Sinnemäki at a meeting of EU competition ministers in Brussels."

...Strange, who will be in serious trouble?... Any idea?

The Housing Market, a Population Perspective : Part 1

The outlook for the housing market ( and indirectly for the Finnish economy as a whole) in the longer term are pretty grim, due particularly to its demography and population characteristics.

I will try to highligh few areas that are of interest in this domain. Let's first project ourself in the future to understand how the population will evolve (Part 1) and then extract the causes of why it is that way (part 2) and its implication on the housing market (part 1 & 2).

This is a quick analysis, if you have some information or any interpretation you are welcome to enrich the discussion.

First let's look at the population as projected by the European Statistic Agency (View Source).

The projecton scenarios are based on assumptions for fertility, mortality and migration. The method used for population projections is the "cohort-component" method as stated in their web site.


Based on that raw data, here is a graph where I added important facts:


Based on the projection, one could clearly see that the need to build in greater amount new dwellings has no ground. Obvioulsy, some Finnish economists or politicians have been lately voicing the contrary - maybe to add oil to the fire to the current housing bubble?

So I want to highlight here, it is the fact that intuitively we would think that there is a need to build more and more housing since wrongly we think that the population will be greater in the future than now...we just extrapolate in a linear manner - (in)fortunately the human way of thinking is linear - we think in a very simple manner (it is even more true for politicians).

Moreover, this analysis takes the most optimistic perspective (not taking into account household formation which obvioulsy will drastically reduce the need of housing starts).

So what are the implications? are we building too much? would the supply excess the demand?

Let's have a look at the housing permit that were given for 2009 as found in Statistics Finland web site (view source) :



So no there is no excess supply and the contruction builder have understood it and have ramped down the number of construction. Most probably, they are looking abroad for keeping their shareholders happy or changing their business model into for example building railways or metro (guess who will win most of the contracts and who is going to pay for it?)...

Obviously at the end it all lies on one particular parameter : Immigration as we will see in part 2 the fertility rate in Finland can barely keep the population at the same level...so stop reading, act :->

Additionaly , immigration may also imply lower affordability level which could obvioulsy impact prices over time...