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.

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Atomizer's picture

UK. China is a digital debt repayment obligation. Both share consequences. 

Harbanger's picture

So who will win the global currency race to the bottom without decimating their economy in the process?

Atomizer's picture

I have no idea, just an option. Things are getting interesting, who will create the new SIV to manage 2018 forecast? How much longer can they pillage before the money dries up? That is the question, not solution. At some point, we need to step-in.

Vampyroteuthis infernalis's picture

So who will win the global currency race to the bottom without decimating their economy in the process?

In the long run, no one wins. We all lose.

Spitzer's picture

As a sprog born in Vancouver, I am insulted that it didnt make te list

LawsofPhysics's picture

Good one spitzer, yeah, the chinese have blown one hell of a bubble there.

Kirk2NCC1701's picture

The money inflow from HK has totally inflated RE prices in Hongcouver.  Unless you were in that market 20 years ago, and got that free ride the Up escalator, you have no chance at buying a "nice" house (>2500 sq. ft) at prices that a middle-class Joe can afford.

Note also that the interest portion on your mortgage payment is NOT tax deductible in Canada, or any other country I know of, besides the US.  Which makes the RE prices in Hongcouver and Toronto all the more remarkable.

LawsofPhysics's picture

What if UK=China=U.S.S.A.=???

Just saying, my contrarian spidey senses are tingling...

Der Wille Zur Macht's picture

Don't fall for the cabal nonsense, mankind simply shares the same shortcomings. This gives the appearance of some singular, planned, evil mindset.

Envy and avarice are ubiquitous and will remain so until the end of time.

LawsofPhysics's picture

Exactly, we have never fallen for the "my ponzi is better than your ponzi" horseshit...

same as it ever was...

Totentänzerlied's picture

If human nature is universal (as regards humans) then local variations are the only differences, and therefore the only differences that matter.

Chewybunny's picture

Can I quote you on that? Excellent way of saying, in seconds, what I try to explain in hours, to people.

bentaxle's picture

Chinese. Because both bubbles are Chinese generated.

Atomizer's picture

Corrected your post.

Chinese. Because both bubbles are Chinese funded.

RadioactiveRant's picture

I'm pretty certain most new houses built in the UK are made to Chinese standards.

The man with pointy horns's picture

Here in England there is a deliberate restriction on supply of available homes. Not enough new houses are built, 100's of 1000s of homes are vacant and under the property of land lords, and finally the middle class and the baby boomer generation need house prices to keep on rising to ensure they don't go into negative equity. They bought cheap and intend to sell as high as possible to sort out mortgages and to prop up diminishing pension returns.

To top it all off a few million immigrants have arrived since the start of 2000 so that just further exasperates the situation. Of course the housing bubble goes back to the banks and to the government who will not touch this motherfucker, i.e. alleviate exorbitant house prices, because banks will go bust and the Toff/Lib government would have committed election suicide.

It is taboo in this country to talk of affordable house prices because nearly everyone who is in power and/are well-to-do will not tolerate it. Of course the young are screwed. It's either a high monthly mortgage repayment or high rent, pick your poison. So you can't save up. Of course this generation are double, nay triple, screwed over because we're not going to have pensions (which ain't no bad thing- the lack of pensions might force people to SAVE and actually think about the future), higher taxes for health care provision for baby boomers and general inflation is only going to get worse.

But since nothing save a calamity is going to change the situation, and since I don't really care for luxuries and stuff, I live frugally and I refuse to get a mortgage just to buy a home. If you want to buy something you buy it with cold hard cash, not with the promise of paying cash in the future to the bank and shackling yourself for twenty or thirty years. So that means a lifetime of rented accommodation, or going back to my parent's home if things get really bad. But that's alright you know.

I only have three luxuries: skateboarding, story writing and my favorite computer game Simcity 4. After work those are my three hobbies and as long as I can do one of those three then I'm happy. It's about purpose and sadly a lot of people's purpose in life is to want things they can't possibly have or it is devoid altogether. They're going through the motions. They're running on automatic. They're trapped to one lifestyle because things cost so much in this country and this noose is only tightening.

To live life without purpose is to me the worst hell imaginable. To live life oblivious to guilt or regret is also another hell, one which bankers and all of those pigs are living in. But that's another problem.

RaceToTheBottom's picture

China is just preparing for the upcoming American Guest worker program.

Kirk2NCC1701's picture

Whaddya mean "preparing"?  They've been doing this for years.  The only difference is...

They've turned the Skills Pyramid upside down:  They've got all the unskilled workers you can imagine, and are therefore importing only the best of the best -- so that they may "suck their brains" for know-how, tricks and experience.

In my sector if the high-tech industry, I personally know of executives and engineers who work and live in China for several years, or go there for weeks at a time as contractors.  The level of automation and its scale is absolutely astounding.  The "expensive" machines for Mfg or for Metrology (testing) that our companies have in small numbers, they have in hundreds.  Absolutely jaw-dropping scenes.  For every PhD we have, they have 7.

That's another reason that the West -- and the US in particular -- is "screwed":  The East and Third World is exporting laborers and students to the West/US, to drive down US wages, while importing its technology and brains.  The N.Am. West Coast is particularly affected by tech workers from India and China, who are networking their way up the food chain.  Just spend some time in any conference room, board room, or in cubicle land and look around.  White guys are now a minority.

"Good ruck white boy. May you live in interesting times. ROR"

US Capitalism (and Social Engineering) since 1980 = FAIL! 

theprofromdover's picture

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

Well these graphs don't tell you the answer.

C'mon guys. This is baloney.

UK market is being completely distorted by foreign money in London.

The rest of UK is probably negative, or at best, static.


NoIdea's picture

We're all either landlords or tenants now in the UK. Buy-to-let is booming, 125% mortgages have returned. Ultra low interest rates, the government's "Help To Buy" scheme at the lower end and a tidal wave of cash from the world's mega wealthy at the higher end ensures house prices keep rising. What could possibly go wrong?

novictim's picture

This is all fuel to keep the gross Income Inequality situation cooking along.

Pricing out the peasants of England and China, allowing the purchase of one's country by the global criminal elite...who does that serve?

Is Capitalism working for Mr. And Mrs. Jones who live in the basement of their parents home in North London?


Is Democracy working when the decisions of the Conservative Government and the Labor Opposision -both- intertwine with accepted campaign dollars and lucrative post term jobs provided by the 0.01%/Financial elites? 


There needs to be a revolution in the name of the English People.  It is long overdue.

RadioactiveRant's picture

Its American/European peasants that have given their money to the Chinese elite for work done by the Chinese underclass. The American/Europeans can now barely afford the basics while their former enemies are now their fuedal landlords. The more people think about this whole situation the angrier they'll get.

falak pema's picture

OT/ but related :

Talking about bubbles and channel stuffing, the article by ZH on car channel stuffing is getting blasted in MSM as here :


Any comment ZH? 

RadioactiveRant's picture

Does this mean the Chinese will be buying in Oz, the UK and US as an alternative to domestic investment or is the entire global real estate bubble about to pop?

Cumulus Nimbus's picture

The politicians are spouting that there is a shortage of housing in the UK. This is bollocks of course. There is plenty of housing in the UK. The problem is there are to many people, especially in England, and even more especially, southern England. It is the most densly populated country in europe and probably in third place in the world.

Despite this our dickhead politicians have let immigration run out of control so that we would have to build a city the size of Southhampton every year just to house the newcomers.

"We need to build more houses" they say "do away with planning restrictions" etc "build on argiculteral land" but so much of the country is already over built I dread to think what the future will be like for our children.

Of course ever increasing population means they can keep the wages of the common man down and show increasing growth without any improvement in efficiency so I guess that suits the political elite.

Nigel Farage's UKIP party are trying to stop the rot but you would not believe the efforts they are going to to try to discredit him. Apparently he's a scary waycist!

Luckily people seem to be wising up to the bullshit cry of "racist" if they dare voice a desire to preserve their nations heritage and Nigel looks set to give the status quo a right good kick up the arse in this weeks European elections.

I am encouraged that many people seem ready to vote UKIP this time round. Maybe they are racist, or maybe, like myself, they don't want to live in a multi cultural shithole with no countryside or wilderness left and a mosque on every city block.

Vote UKIP.

Rant over.

eXMachina's picture

What about Sydney's property bubble? Surely it's at least worthy of a mention.

Kirk2NCC1701's picture

Globalism works best for Globalists: Bullish for Vampires, Familiars and Vultures.