Tuesday, June 28, 2005

Overseas’ Bubbles Are Slowly Deflating

We are supposed to keep track of prices in the UK and Australia because prices over there have supposedly leveled out, or in some cases, started to fall.


“A surge in U.S. house prices, which have jumped 50 percent nationally in just 5 years and 12.5 percent in the past 12 months alone, started later than decade-long accelerations in the UK and Australia, which leveled off this year.

The problem, still being played out in these markets and deemed a salutary lesson to U.S. homeowners, is that even the prospect of flat or low single-digit price gains may be enough to create problems for increasingly leveraged Americans.

The flattening in Australian and UK house prices has reminded buyers that double-digit gains are the exception, not the long-term rule.”



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