The problems in the US and Southern Spain are now well documented. The clever bit is accurately predicting the future thus allowing your self the best chance of wealth creation/preservation.
Closer to home in the UK. Prices in Eire have now fallen for 4 months in a row. IMHO In the UK it looks like the bubble will burst first in Northern Ireland, an area which has seen crazy unsustainable growth in house price inflation recently. The supply demand balance has been turned on it head presumably as speculators break for the exit: The sales inventory for N.I. is now over 11,400 units, up from around 6000 back in March.
UK interest rate will probably go up .25% in July and in my opinion they will go up at least once more before Xmas taking rates to 6%. Whether UK rates top out at 6 or 7.5% (as has been predicted) they won’t be coming down any time soon. This will be good for the £ v $ exchange rates and savers no so good for people remortgaging. Also Euro zone rates will keep rising into 2008.
Don’t forget a lot of demand in the Uk is discretionary, not underlying. Well see how many over streched BTL’s hang on in there when their 2 to 3.5% 2year deal ends and they go onto 7.5% SVR or 6% fixed.
My predictions for the correction in UK property market by regions will start NI, NE, NW and East and West Midlands. The South East and South West will follow and London will be last. This will be virtually the opposite of what happened last time.