Chart Of The Day: Whose Housing Bubble Is Bigger?

Tyler Durden's picture

Last week we reported that the Chinese housing market, a carbon copy indicator of Chinese market liquidity, has completed a very mutated "head and shoulders" pattern in what increasingly many are seeing as a precursor to what may be - absent another massive liquidity push by the Chinese government - the infamous Chinese hard landing. And yet, while China indeed is desperate to keep home prices bubbly if only for the local population to have a pool in which to allocate those trillions in loans created each year by China's semi-public banks in hopes of "get rich quick" returns, the reality is that its home prices have recently been declining and as the National Bureau of Statistics reported over the weekend, prices of new residential properties for 70 medium-to-large cities increased by 6.8% annually in April, down from 7.7% in March.

In other words: a serious downswing in prices, which peaked at about 10% in late 2013 and are in danger of posting the first monthly decline in May in two years.

On the other hand, one place which is not only enjoying an unprecedented upswing in home prices, but seems completely paralyzed and unable to do anything about it (As the BOE head commented over the weekend), is the UK, where according to real estate agency Rightmove, property prices rose by 8.9% annually in the most recent month of May, well above the 7.3% increase reported for April.

Which brings us today's chart of the day question: whose housing bubble is bigger - China's or the UK's?

 

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And as a bonus, here are 10 more charts from Bank of America proving just how bad the Chinese housing situation has gotten. Pay particular attention to chart 10: domestic loans are approaching a negative print - a situation unheard of in recent years.