London House Prices Drop at the Fastest Pace Since 2009, China at Risk of Banking Crisis

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  • Acadata report shows values fell 2.6% in year through January
  • Sustained weakness in the capital drags down national growth

London house prices are falling at the fastest pace since the depths of the recession almost a decade ago, with the capital’s most expensive areas seeing the biggest declines.

Average prices fell to 593,396 pounds ($820,000) in January, an annual decline of 2.6 percent, according to a report published by Acadata on Monday. That’s the most since August 2009.

The city will be the weakest performing market in the country over the next five years, said Lucian Cook, head of residential research at broker Savills Plc, as a decade of soaring prices means London’s more exposed to political and economic uncertainty, the prospect of interest rate increases and mortgage loan limits.
Looks like its turning. Meanwhile the UK also has this to look forward too…
Government owes £5.3trn in pensions – ONS
He says: “The numbers in this report are truly mind-boggling.

“Today’s population has built up £7.6trn in pension promises but has only set aside about a third of that amount to pay for them. The rest will have to be financed by tomorrow’s workers.


Another crumb of comfort is that, in 2010, future pension promises made by the taxpayer represented 243% of GDP. By the end of 2015, it had fallen to 215% of GDP.

Now stack those numbers on top of private pensions and debt/gdp.

  • Canada and Hong Kong also seen at risk from high indebtedness
  • Still, China’s deleveraging campaign is easing credit levels

China, Canada and Hong Kong are among the economies most at risk of a banking crisis, according to early-warning indicators compiled by the Bank for International Settlements.

Canada — whose economy grew last year at the fastest pace since 2011 — was flagged thanks to its households’ maxed-out credit cards and high debt levels in the wider economy. Household borrowing is also seen as a risk factor for China and Hong Kong, according to the study.

“The indicators currently point to the build-up of risks in several economies,” analysts Inaki Aldasoro, Claudio Borio and Mathias Drehmann wrote in the BIS’s latest Quarterly Review published on Sunday.

The study offered some surprising results: for example, Italy wasn’t shown as being at risk, despite its struggles with a slow-growing economy and banks that are mired in bad debts.

While China was flagged, a key warning indicator known as the credit-to-gross domestic product “gap” showed an improvement, said the BIS, known as the central bank for central banks. This may suggest the government is making progress in its push to reduce financial-sector risk.
h/t SpontaneousDisorder

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