Seems like the UK is going through its own mortgage meltdown now - whic countires are also vulnerable?

MoresbyChief answered one year ago …

There was an article in the Economist maybe 2 weeks ago which gave some interesting data on this. It was some research which tried to account for how much prices have been boosted by actual supply&demand and how much by over-extended mortgages and speculation, for a dozen or so countries. Unfortunately (and this is not much help) I don't have a copy. Off the top of my head the UK was up there in top 5 worst (ie. price inflation mostly not due to supply and demand, therefore deemed 'overpriced'), as was USA and Spain. Australia was slightly better off, Germany was about neutral.

Prices in the UK have been quite stubborn the past 18 months. Up something like 5% in past 12 months despite everything. However I am convinced that they will come down, it is totally unaffordable in the UK especially for first time buyers. The boom has been fed by (a) Cheap money, and the belief that property 'always goes up', egged on by endless property development TV shows that make it seem easy (b) Drip down effect of massive bonuses in the financial sector - which account for a large proportion of UK workforce (c) influx of wealthy foreigners - especially Russian but also Middle Eastern, awash with cash from the commodities boom. They may change their mind about living in the UK with the new 'non-dom' taxation laws which have just come in.

Also I am concerned that there has been over building of new apartment blocks in the UK. Cities up and down the country are full of characterless Ikea-style flats in city centres which have been snapped up by eager by-to-letters. Over supply means that many can not even get ther rent to cover the mortgage, and apparently some are even taking in students at very low rental rates just to avoid the flats being empty.