Private Debt As A Percentage of GDP (2013)

Data is already from a year ago, yet it is still very interesting. It shows very clearly that private debt to gdp is higher in developed countries versus developing countries. This might very well have something to do with property rights. Ireland is clearly on top with almost 300 percent of private debt to GDP. While the Nordic countries are known for their low government debt levels, Denmark and Sweden are second and third in this ranking. Notice Germany which is on the bottom half. Also Italy and Greece are far from the top.

Shahin Kamalodin (Economist at DNB)

Quarterly EU House Prices (2005-2013Q4)

With new data from Eurostat for the percentage change in q4 2013 of the house prices in the EU I constructed this graph. During the last quarter of 2013 the United Kingdom and Sweden saw big increases in their house prices, while house prices in the Netherlands and Cyprus decreased. For the EU as a whole house prices decreased with 0.1 percent compared to Q4 2012.

Eurostat

Dutch house prices versus inflation

With data from Statistics Netherlands De-Starter constructed this graph with house prices compared to inflation. Both house prices and inflation are index numbers set to 1965 = 100. From the middle of the nineties house prices started to deviate substantially from inflation growth. When the increases in house prices are equal to inflation growth in the long run it is expected that house prices would decline more in the future.

De-Starter

Positive Relationship: House Prices & Election Polls

This graph shows the relationship between house prices (left axis) and the Incumbent Poll lead (right axis). As you can see lower house prices go along with a lower probability that the current government will be re-elected. This of course doesn't mean that house prices necessarily cause the probability to change that the incumbent government will be stay in power. Remember correlation does not imply causation. Yet it is an interesting relation.

Independent Investor

China Real Estate Prices (2007-2013)

This graph shows the national average of residential real estate prices in China. As you can see prices, corrected for inflation, have increased by 70 percent up until late 2012 and lost some of it's value in the beginning of 2013. This shows that although the Western world encountered a big crisis, Chinese house prices rose substantially.

After all tightening measures house prices were lowered.

Zero Hedge

400 Years of Dutch House Prices

This graph gives the real (2009) average house price in the Netherlands from 1628 until 2009. As you can see on average over housing cycles house prices remained around their long term average level of 100.000 euro's. Currently the house prices are way above the long term avearge.

Prijsbewegingen op de koopwoningmarkt - Onderzoeksinstituut OTB/TU Delft

Global Housing Market Update

This table from The Economist shows average house prices in Developed and Bric countries compared to their respective income and rent levels. House prices in Hong Kong, Canada and New Zealand are most overvalued. While house prices in Japan are highly undervalued. Also, the graph shows that Hong Kong saw the highest average price increase over the last year. The Netherlands had the biggest decline.

Due to a request by the Economist this graph has been removed. 

View the graph here

History of Credit Bubbles

This chart shows a historic overview of several financial bubbles. From the Tulip Mania in the 1630's to the Real estate Boom that ended in the late 2000's. This research was provided by Goldman Sachs.

Click on the picture for a bigger version.

ZeroHedge

EU House Price Change Since Credit Crisis (2008-2012)

This chart with data from Eurostat shows the average change in the house prices in the EU since the credit crisis really started to break down in the United States, the second half of 2008, until the third quarter of 2012. Countries known for being in a big crisis at the moment saw the largest declines in their house prices, mainly Ireland and Spain. The Netherlands and Denmark have to highest household debt-to-gdp ratio's in the world and saw their house prices declines a lot as well. The last group of countries on the downside are several East-European countries for which Latvia and Lithuania saw big declines. In contrast, three out of four Scandinavia countries had their house prices increase substantially.

Luxetveritas

Global House Price Indicators (January 2013)

The Economist posted this overview of global house price indicators in January 2013. Some points of interest:

• Hong Kong saw the biggest rise in housing prices: 22 percent compared to year ago, while Spain saw its house prices contract the most.
• Hong Kong was also the country that saw its house prices increase the most after the start of the global financial crisis in 2007, while Ireland saw the biggest correction; house prices were slashed in halve. 
• Housing markets in Canada and France are most overvalued according to rent and income measures, while those in Japan and China are quite undervalued compared to their long term average values.

The Economist

Household Debt Versus Disposable Income (1995-2011)

This graph gives the ratio of total household debt divided by the total of disposable income of the households in countries of the Euro Area and the USA. On average the household debt to income rate was relatively stable in the Euro Area approaching the 100 percent just before the credit crisis from around 70 percent at the beginning of the Euro. The household debt to income ratio was already higher in 1999 in the USA and saw a much bigger increase, but unlike in the Euro Area the ratio has come back quite a lot already in the United States.

The average of around 100 percent currently in the Euro Area is mainly formed by the bigger economies: Germany and France, who have a ratio close to the Euro Area average. There are notable outliners, especially Denmark, The Netherlands and Ireland that have a way bigger ratio of 200 to almost 300 percent.

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Housing Bubbles in U.S., Spain and Ireland Compared

This awesome tool from The Economist let's you compare house prices around the world. As you see house prices in Ireland rose the most relatively between the three countries. For Ireland and the U.S. house prices have corrected quite significantly already. In Spain it seems, the worst is yet to come for the decline in prices.

Via the link you can compare some other countries yourself.

The Economist

Unprecedented Global Housing Boom

The IMF constructed this graph with housing price data from 55 countries. From 2002 and on there was a huge rise in global housing prices. The decline afterwards was also not seen in at least the last 40 years. Lately the housing prices seem to bounce back a bit, but this could be temporary as well since the house prices are still on a very high level.

IMF

House Prices Versus Disposable Income (1993-2011)

This chart shows the development of the house price-to-disposable income ratio for several countries, with the long term average set as 100. Ireland had the biggest housing bubble (in terms of prices to income). Spain was really close to Ireland and the ratio is still higher for Spain, while Ireland already got back to its long term average.

Especially notice the Netherlands, which is still really high on the scale and France, which is rising again after the decline. Also notice the United States which, according to this measure, should not have a housing bubble anymore.

Spain: Impact of Housing on GDP

As you can see a big part of the total investments in Spain consisted of housing investment. Especially so in the years closer to the crises. In the lower panel you can see construction raised GDP before the crises and has lowered it since the crises started.Banque de Espana

Global Housing Indicators (April 2012)

The Economist has made an overview of updated global house-price indicators. From left to right: compared to a year ago prices rose the most in Canada, Singapore and Austria. In Ireland, Spain and Denmark prices declined the most. Compared to when the crises started house prices have even still increased 72 percent in Hong Kong and 34 percent in Singapore. They have declined 48 percent in Ireland and 30 percent in the United States.

Housing prices cannot easily be compared country by country. For example if house prices rise with income this may reflect a fundamental increase. If house prices increase a lot more than income this is probably not sustainable. If you compare house prices to rents and income per country you can make a better comparison. Compared to rents house prices are the most overvalued in Canada, New Zealand and Belgium. They are the most undervalued in Japan and Germany, and surprisingly also in the United States. Compared to income house prices are the most overvalued in Belgium and France. They are the most undervalued in Japan, China and the United States.

In total (average of rental and income) prices are most overvalued in Singapore, Canada, Hong Kong, Belgium and France. They are the least overvalued in Japan, The United States and Germany.

Due to a request by the Economist this graph has been removed. 

View the graph here

Spanish Construction Employment From Record High to Record Low

With real interest rates going negative in the years after 2000, more than 5 million new immigrants added to the labor force and high amounts of lending by households and companies (from abroad) not only a housing bubble was created in Spain but also one in the construction market.

When the credit crisis begun and interest rates started to rise it became clear that this boom was not sustainable. Construction employment dropped to the lowest value in 25 years this year.

How Fannie Mae and Freddie Mac Work

This chart shows how Fannie Mae work and how it put more liquidity into the housing market. It does that by taking mortgage loans from banks in exchange for cash. That way banks can give out more mortgages. A big factor in this process was the fact that Fannie and Freddie were charged a lower interest rate than private institutions when borrowing money from the debt markets. In other words, these two government sponsored entities were perceived as having a lower risk.

NYT

Especially since the eighties with the mortgage-backed securities getting more and more popular this process gained momentum. In the next graph you can see the holdings of mortgage debt outstanding by type of institution. In the eighties and nineties holdings of mortgage debt by Fannie and Freddy (Agency- and governmentsponsored enterprises) exploded.

EconBrowser

Short Term Interest Rate In the United States (1831-2011)

Here I show the short term interest rate for the United States from 1831-2011. The short time interest rate was determined by supply and demand before 1913 and set by the Federal Reserve since 1913. Especially notice the almost continue decline in the interest rate from 1980 in which the financial markets exploded and housing bubbles were created - (lending) money became more and more cheap for consumers, businesses, governments and banks.

Ritholtz

Household Debt In The United States

This graph shows the total household debt in the United States. Orange is motgage loans. HE Revolving is home equity loans. Green is auto loan. Blue is credit card loans and from this quarter student loans are added as well (red). As you can see the american citizen is deleveraging (bringing down its debt), but it takes time. The household debt is about 77% of U.S. GDP.