European housing - as bad as US?

[Spartacus]

I've been reading that British housing or Spanish housing is far more expensive than US housing, so their bubble bursts will be much worse.

But historically, haven't these housing markets ALWAYS been more expensive for the same product?

Just like, historically, the stock markets in different countries always settle out to different p/e valuations, depending on cultural and historical concepts of risk aversion?

PS - last we heard, Spain was on the verge of a cataclysmic apocalypse. Any updates? there doesn't seem to be much on the Interwebs for "spanish banking crisis" and related searches

[touchring]

Re: European housing - as bad as US?

I don't know about europe, but you will find that housing in coastal chinese cities are now the most expensive in the world relative to income (city income). People are paying 20-30 years their income for apartments. The whole family including grandma and grandpa has to finance the home.

This is a bubble waiting to explode. In some cities, i wouldn't be surprised if prices can fall 70% once it goes.

[santafe2]

Re: European housing - as bad as US?

Some of my family members live outside London. There's been a housing bubble going on there for several years. It's now very expensive by their standards and, of course, completely outrageous by US$ standards. An average home in London is over $1MM US. If you want a detached house, plan on $1.5MM US. Detached in Westminster over $8MM US - but of course you can just pop in and visit the Queen. If you're a US citizen and you're a little short on cash, you can pick up a flat in Barking and Dagenham for about $300,000 US - but don't dilly-dally on your way home from the pub or you'll begin to understand the term "soccer thug" a little better than you likely want.

When my brother and sister-in-law bought three years ago I dug up several articles referring to London as the most bubblistic, (or is that bubblized), markets in the world. Of course they didn't listen and the bubble just kept inflating at the same time the British Pound continued to streak away from the US$ so needless-to-say, they're doing just fine but a downturn in the economy will likely have an adverse effect on pricing and the exchange rates will also likely normalize over time.

Here's a reference to the latest sales prices
http://news.bbc.co.uk/2/shared/spl/h...l/county37.stm

[c1ue]

Re: European housing - as bad as US?

A couple of notes:

1) I expect the UK to suffer even more slowly than the US through a real estate decline as I believe there is no real estate property tax.

2) I was talking to a customer here in Russia yesterday, she bought a property in Spain 3 years ago for 60K Euro, now it is ostensibly worth 120K Euro. But she's never been there! Hmmmmm....