>>I don't see the bubble in the homeownership stats, but in the
price/income ratios (or price/rental ratios), which are either at or
near record highs. That, plus the mad level of home equity withdrawal
- $600-700 billion last year. Debt is increasing far faster than
equity. But no reason to worry - Alan Greenspan says it isn't a
bubble!<<
La la la la can't hear you
love
the population of Great Britain ...
the interesting things to me are:
a) the US ratios of price/earnings and rental yield are not even all that extreme by UK standards
and
b) despite the fact that Australia and US (deregulated financial systems) are experiencing similar price dynamics and places like the Netherlands are not, we have managed to convince ourselves over here that recent house price moves have something to do with "supply and demand".
There is even a concept used locally in housing market analysis which refers to the "pent-up demand" of first-time buyers for properties as a likely support for the market. This is, afaict, rather like my "pent-up demand" for a Porche 911; I want one but can't afford it, and won't buy one unless the price falls a hell of a lot.
I also pass on the cheering news that, eyeballing a chart of the three series, in the UK recession of the early 1990s, the causation went interest rates ---> house prices ----> unemployment.
hey ho hum.
dd
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