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.
Don't expect inflation for at least the next 2 years, we are and will be in a deflationnary mode.
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...
As someone put it, you don't need to buy the cow to drink milk in the morning.
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).
5 comments:
It's a bad game of limbo "how low can you go"? Sooner or later, as with the real game, you can physically go any lower and the game ends. New round. And Finland, like most Europe ends with themselves being the person who falls first in a long line of losers.
Should say can't go any lower.
Japan manage to stay at low rate for decades...with also an aging population and a housing market on decline for the past 20 years.
All in all, the situation looks pretty ugly...
Looks like the ECB is going to be lowering interest rates further and the Feds doing QE3. Meanwhile Nokia debt is at junk bond levels by all of the big 3 credit agencies.
It is now interesting that this crisis has been at full power now for 5 years and a bottom of sorts is now in with US house prices with maybe a decade or more of recovery to grind thru before they are coming back towards previous higher levels, with all the over spending and insufficient taxation still to work thru.
ZIRP of one sort or another could be here for the rest of my life.
WWII and demography were the cause of the last housing market dislocation...now with below average fertility rates ...not sure where the housing market will be going..maybe like in Japan: nowhere or going down for 1 or 2 generations.
At the end, the most important is to have a roof under its head (rented or bought) while not having the shadow hand of the bankers ready to kick your butt to remind you that your soul was underwritten in exchange to spend a third of your life under the same roof.
Of course, the gamble could work , double or quits...
Nevertheless, currently I am surprised how central bankers are maintaining a ship full of all holes...so how long can they keep the economy afloat before it sinks...
For me the most important goals that those you put us in the current mess is to keep the social cohesion...who cares about housing when its surrounding environment is sick.
any keep positive :-)
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