U.S. housing collapse spreads overseas
“We know we’re already in negative equity,” said Emma Linnane, a 31-year-old university administrator. She bought a cozy, one-bedroom apartment in the Dublin suburbs with her fiancé, Paul Colgan, in May 2006, at the peak of the market. They paid €365,000, or $575,000 – at least $100,000 more than it would fetch today.
The bad news regarding the American housing market continue apace. BusinessWeek are reporting that Existing Home Sales Drop for Seventh Straight Month with the national median existing home price dropping 7.7% from a year earlier. That a bubble has burst is clear.
What is not so clear is how much of the contagion has spread worldwide.
In New Delhi and other parts of northern India, prices have fallen 20 percent over the past year. Sanjay Dutt, an executive director in the Mumbai office of Cushman & Wakefield, the real estate firm, described it as an erosion of confidence.
India? And closer to home;
“The boom in house prices was actually much bigger here than in the U.S.,” said Kelvin Davidson, an economist at Capital Economics in London. “If anything, people should be more worried than in the U.S.”
Britain has the most developed home-financing industry after the United States. The amount of outstanding mortgage debt, as a share of total economic output, is higher there than in the United States, according to an IMF study.
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