14 Apr The Recession : Our Market is Different to the USA
Wednesday, 08 April 2009
Our Market is Different to the USA
Anyone watching the international news will be aware that the United States property market is facing a steady decline in values, with falling turnover and an increasing number of foreclosures.
While our market is very much in a negative phase, it is quite different to the US market.
- Our interest rates over the past three years were high, by world standards, whereas the US market during this period had much lower interest rates, with many low honeymoon style rates being offered as well. These lower rates allowed many more people to qualify for loans who would not have in this country.
- We do not have an over supply of houses as they do in the US – this is a major factor in driving property prices lower there.
- Mortgage rates in the US have been relatively low for a quite a while – whereas ours have not, and so our recent substantial falls are having a major positive impact on housing affordability.
In many ways we are better placed in this country and I still firmly believe we are six to nine months ahead of the states, just look at current stats.
- We did not have the considerable sub prime market where those with quite poor credit histories could quite easily obtain 100% funding on their properties. Our sub prime market did exist, but it was small by comparisons.