Spanish Property Insight › Forums › Spanish Property Forums › Spanish Real Estate Chatter › US property market in fastest ever decline. Spain to follow › Reply To: US property market in fastest ever decline. Spain to follow
What is often misunderstood about the UK (and other property markets to differing degrees) is that about 70% of demand in a boom is discretionary (and is fuelled soley by the easy availability of cheap credit). When Joe public realise that prices have stopped increasing are now falling, they exercise their discretion and stop buying. Add to this the fact that lenders having now come to their senses and have a few years of catch up, with which to sweat existing borrowers who can pay, to make up for the last five years lax/foolish lending decisions. And the future is grim.
With easy money prices became massively over inflated relative to fundimentals, and as were about 18 months behind the US, the UK sub-prime problem which I have, no doubt’s is as acute as the US situation having not yet kicked in, the return to prices sustainable and related to fundamentals. IMHO will be nationwide and worse than the 1989 to 1994 crash.