Sean said...Sheerly on a price/disposable income basis, I don't think Canadian prices are sustainable. Disposable incomes are no longer rising that fast, either, as resource prices are either flat or falling across the board.
5:29 PMCharles Butler said...Ha, good ones! I was waiting for someone to dig those up. Still trying to figure out the relative weights of overbuilding, overpricing, the collapse of the west's banking system, chronic recession and the euro crisis on the real estate outcome, though. [The armageddon crew got a lot of help on this one].Your argument's sound enough. It's the characterization of that market as being a bubble, and all the implicit predictions about the future that come with it, that I find wanting.Cheers5:58 PM
It will be evident to anyone clicking through to the links above that we have turned out to be quite wrong about what would happen to Spanish property prices in the ensuing years. Not that I had made any concrete predictions beyond doubting that it would turn out as badly as the 1990's southern Ontario bust - but I was wildly mistaken nonetheless.
As to why I don't feel especially inclined to change my tune, despite what was to follow, here's a summary of some of the elements that I think did (or did not) go into producing fairly similar outcomes - at least to date:
Readers can take all this as they wish. The most obvious available options are that a) Spanish real estate prices have a long way to fall, or b) they would have been more resilient under circumstances remotely similar to those in Canada in the 1990's - which was my original point back in 2007.