The US housing recovery is gathering steam, and bullish economists are hopeful it will give a handy boost to growth, at a time when the US faces more austerity than most of Europe, thanks to the tax hikes agreed in the fiscal cliff compromise.
Credit Suisse has produced a nice chart showing just how big the recovery in housebuilding has been: private housing starts are now running at a higher rate than at the trough of previous recessions all the way back to 1960.
Source: Credit Suisse
John Authers, my predecessor as Short View writer and co-author of this blog, published some interesting graphs this week about London property, as he worries about a bubble.
I don’t often disagree with him, but on property I think he’s missing a trick. He pointed out that Miami’s housing bubble was far worse than London’s, but that London’s price rise is now approaching where Miami was:
But these prices (rebased to January 2000) were in local currency terms. And London’s property market is so important to the country, and its buyers so international, that it makes more sense to compare these prices in constant-currency terms.
That’s easily done by converting London prices to dollars and then rebasing:
So from an international perspective the boom in London prices was every bit as big as in Miami; they just peaked slightly later. The bust was of the same magnitude, and even more extreme, since it took place through the collapse of sterling rather than the somewhat less rapid fall in property prices. Read more
A Chinese company is setting out to build the world’s tallest building in Changsha, central China, aiming to go from start to finish in just three months.
Aside from the impact of the amazing technique (assuming it works) on the construction industry, this might send a message to investors: get out of China now!
My colleagues on FT.com have put together a pretty graphic showing previous holders of the record for tallest towers. Almost all began construction at or near the peak of a bubble: Read more