Latest China devaluation (24/08/2015) and the affect on house prices in UK
No. There is no indication that the recent decline will have an impact on the house market in the UK. The reason(s) for the downward move these last few weeks are mainly due to: The last two points caused the Chinese government to decide to devaluate the Yuan. This in turn triggered an unforeseen panic attack among investors and speculators around the globe starting with the Chinese that are trading on borrowed money (not only on margin but also by using loans). The UK house prices are not influenced by the above factors, not even indirectly. The most important factors for house prices are in general: If you keep the above points in mind you should be able to decide whether now is the right time to buy a house in your area. Given that a lot of central banks (incl. BoE) are maintaining a low interest rate policy (except fed soon), now is a good time to take a mortgage. Sources used: I know interest rates are determined by the BoE which looks at the global picture to determine these rates but the main directive of a central bank is to maintain an inflation close to but not exactly 2 % as to spur on economic growth.  As such, the value of a company as valuated on the stock market is not or barely taken into account. The negligible impact is the reason why I stated that the crash in the summer of 2015 doesn't even have an indirect impact.  Also such a crash is very short lived. It's more the underlying reason for the fears that could cause issues if they drag on.
Yes  I kow my questions are broad and debatable, I was looking to spark the interest of multiple perspectives/opinions.   Regarding the strength of western economic fundamentals, I think a lot of it has to do with simply better performance by companies, especially in Western Europe. I think both this performance (companies' broad EPS growth) as well as less anxiety over the future of the Eurozone/PIIG debt crisis has engendered a broad feeling of positive animal spirits.   Imo this has become a recursive self fulfilling prophesy in the markets as people's optimistic expectations of the future leads to higher investment, lending and risk taking, which results in growth, which then rewards and spurs further spending/investment. The other argument (especially in EU) is that the ECB's sustained accommodative monetary policy policy is finally trickling down into European asset prices just like they did for US equities from 2011-2015.   Regarding your series of questions about China/NK, I was genuinely hoping for answers/opinions on those questions you proposed. I think China is playing Trump and the State Dept like a fiddle - stringing us along with this Kim debacle while they quietly consolidate sea territory (man-made military islands) &amp; drilling rights in the South China Sea. "There has been almost no inflation during 2014-2015. do you mean rental price inflation or overall inflation? Housing price and by extension rental price inflation is usually much higher than the ""basket of goods"" CPI or RPI numbers. The low levels of these two indicators are mostly caused by technology, oil and food price deflation (at least in the US, UK, and Europe) outweighing other inflation. My slightly biased (I've just moved to a new rental property) and entirely London-centric empirical evidence suggests that 5% is quite a low figure for house price inflation and therefore also rental inflation. Your landlord will also try to get as much for the property as he can so look around for similar properties and work out what a market rate might be (within tolerances of course) and negotiate based on that. For the new asked price I could get a similar apartment in similar condos with gym and pool (this one doesn't have anything) or in a way better area (closer to supermarkets, restaurants, etc). suggests that you have already started on this and that the landlord is trying to artificially inflate rents. If you can afford the extra 5% and these similar but better appointed places are at that price why not move? It sounds like the reason that you are looking to stay on in this apartment is either familiarity or loyalty to the landlord so it may be time to benefit from a move." "This is the best tl;dr I could make, [original](http://cep.lse.ac.uk/pubs/download/brexit10.pdf) reduced by 98%. (I'm a bot) ***** &gt; Correlations with Brexit Vote and Area Initial Conditions Brexit Vote Correlations One obvious question arising from the overall patterns discussed above is how predicted impacts relate to vote shares in the referendum.  &gt; Figure 3: Brexit GVA Impact and Referendum Vote Share: Soft Brexit Hard Brexit Area Initial Conditions While the results so far imply a somewhat different narrative in terms of who is likely to lose most from Brexit, and how this relates to voting behaviour in the referendum, it is important to remember that the differences in expected impacts are swamped by existing disparities.  &gt; 10 Figure 4: Correlation of Brexit GVA Impact with Pre-Referendum Median Wage: Soft Brexit Hard Brexit Finally, it is also important to note that the places experiencing the biggest initial shock are not necessarily those that will experience the most negative effects once the economy has adjusted.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6pshdw/new_lse_study_the_areas_that_were_most_likely_to/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~176491 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **Brexit**^#1 **trade**^#2 **impact**^#3 **Area**^#4 **under**^#5" The Hong Kong Dollar has been pegged to the USD for nearly 30 years and the Hong Kong authorities have fairly strong means to defend the peg.  So at first glance it would appear that there is really no difference as long as you are getting 7.75 HKD for each USD that you used to receive. However, the peg is arbitrary and could be lifted at any time like the removal of the CHF peg to EUR surprised a lot of people in early 2015.  As mainland China becomes more integrated it is unclear what will happen to the HKD in the long run.  Whether this matters really depends on your contracts.  if your contracts are short dated you may only take a discount relative to USD for a few payments before you can try to renegotiate. It's also worth noting trading HKD for your local INR can be more expensive. Check your local rates. It is likely a bit of both.  Cooking the books AND an economic miracle.       There will definitely be a downturn eventually, and it will be interesting what shakes out.  At this stage, the Chinese model appears to be stronger than any alternatives. GBP has already lost part of his value just because of the fear of Brexit. An actual Brexit may not change GBP as much as expected, but a no-Brexit could rise GBP really a lot. "Have to do a presentation for an International Business and Cultures class in about a month and the assigned WSJ article isn't quite clicking with me and looking for a kind soul here to put it into layman's terms I guess.  If I am violating any policy or breaking a rule by posting the text from the article, please delete.  Thank you for any reply!  WASHINGTON--Finance officials trying to avert the next global economic crisis found time at a summit here to worry about something besides Brexit and European banks: China's mounting debts and its flagging economic overhauls.  The country's surging credit growth, overcapacity in its steel and metals industries and its bloated housing market drew widespread complaints from finance officials and central bankers attending semiannual meetings of the International Monetary Fund and World Bank.  Officials congratulated China for its efforts to get the yuan included in the IMF's international basket of currencies, known as special drawing rights, starting Oct. 1. And despite a couple of scares in the past year or so, the country's markets and economic growth have appeared to stabilize in recent months.  But in a sign of how important the world's second-biggest economy is to global growth, China is increasingly being called out.  U.S. Treasury Secretary Jacob Lew warned Beijing in unusually candid language about China's overproduction and overbuilding, which he suggested could become the biggest U.S. complaint about the country, as their earlier disputes over the country's exchange rate become less divisive.  ""I'm talking about steel, I'm talking about aluminum, I'm talking about real estate--when you don't have market forces driving investment, when you don't have bad investments allowed to fail, you end up with resources allocated in a way that ultimately chokes the future of economic growth,"" Mr. Lew said at the Peterson Institute for International Economics on Thursday.  The IMF zeroed in on a measure called current credit overhang, a widely followed international indicator of potential crises. The deviation of China's credit growth from its long-term trend has surged from zero during the financial crisis to up to 27%. Last year, banks' balance sheets grew to 286% of gross domestic product.  ""More is needed, especially to curb excess credit growth, reduce the opacity of credit products, and ensure sound interbank funding structures,"" said Peter Dattels, deputy director of the fund's monetary and capital-markets department.  China's policy makers are caught in a deepening trap, economists say. Dealing with the debt problem would require the country to start deleveraging. But slower credit growth is bound to hamper the overall economy. That could backfire by making it harder for companies to repay existing debt.  Clamping down on credit would also raise the prospect of political unrest in a country that has grown accustomed to very rapid growth. Faced with such unappetizing prospects, the country's leaders have largely eschewed credit restraint in the hope that they will be able to deal with its economic problems over time.  Part of the problem is the complicated and poorly disclosed structure of the country's swollen banking system, economists say.  ""The increasing complexity, opaqueness of the shadow banking, both on the asset side, but even more on the funding side where a lot of the funding is short term, is not stable,"" Markus Rodlauer, the IMF's Asia-Pacific deputy director, told reporters on Thursday. ""It's still of a size that is manageable, but the trajectory is dangerous, and needs to be contained.""  China's appetite for steel and aluminum, which shrank abruptly in the past year or so, is of vital interest to commodity-exporting economies such as Russia and Brazil. For now, exporters appear to be confident that demand won't drop off again in the short term.  ""China's growth is stabilized at a lower level,"" Brazilian Finance Minister Henrique Meirelles said in an interview. ""I don't see a further collapse coming.""  Still, much will depend on China's economic transition.  ""They are trying to alter their priority from manufacturing to services, from export-oriented to domestic consumption,"" said Indian Finance Minister Arun Jaitley in an interview. ""In the transformational stage, there will be ripples.""  Chinese officials in Washington touted the country's annual GDP of between 6% and 7% and said growth has remained stable as economy transitions.  ""If that transformation is successful, China will continue to have a stable share of global growth,"" People's Bank of China Deputy Governor Yi Gang said on Thursday.  Ian Talley and Bob Davis contributed to this article.  Credit: By William Mauldin" "This is the best tl;dr I could make, [original](http://www.reuters.com/article/uk-britain-sterling-idUSKBN1AR0M9) reduced by 75%. (I'm a bot) ***** &gt; LONDON - Sterling fell to a fresh 10-month low against the euro on Friday as investors added bearish bets against the British currency on concerns the economy may be struggling to gain momentum.  &gt; Sterling fell 0.2 percent to 90.92 pence against the euro, its lowest level since October 2016.  &gt; It has fallen for two consecutive weeks and has weakened nearly 9 percent against the euro since early May. Morgan Stanley strategists are predicting euro parity with the pound in the first quarter of 2018.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6thf3f/british_pound_further_down/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~190040 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **against**^#1 **since**^#2 **Sterling**^#3 **week**^#4 **euro**^#5" December, 1, 2011 (03:00pm) :-  China's manufacturing data's are slides to 49 below 50, a signal of contraction by which whole Chinese economy affected.  Due to the European crisis, the global demand is weak which Chinese affected the most because china is the only market which manufactures the product an unbelievable cost.  Global demand still weak this may be continues by next 2 - 3 months.  Base metal prices are higher composed to 2010 levels, the profit levels also drooped by 5% to the manufactures.  Base metals trends looking down in December.  Cooper may be range Rs 370 - Rs 440  Zinc mzy be range Rs 97 - Rs 113.  Nickel may be range Rs 870 - Rs 960.  Lead may be range Rs 98 - Rs 112. Summarized article: The London-based investment bank Barclays Bank has agreed to pay penalties of $450 million to settle charges it attempted to manipulate key benchmark interest rates.   The settlement is with the US Department of Justice, the U.S. Commodities Futures Trading Commission and the British Financial Services Authority (FSA).   Investigators found that Barclays manipulated the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor) which measures how much banks will charge each other for loans, and in turn, affects the cost of loans and mortgages to consumers.   Between 2005 and 2009, Barclays staff would base its estimates for the Libor on the requests of its derivatives traders, who wanted to manipulate the rate to benefit their trading positions. The traders would ask their Barclays colleagues to adjust their rate estimates up or down to post a profit for the bank.  The FSA said that Barclays appeared to have a wide acceptance of its derivatives traders lobbying its colleagues and found evidence through a trail of emails and instant messages.   Barclays has admitted its actions fell short of industry standards but it is unclear if there was any impact to consumers.   The FSA is investigating several major banks for similar violations.  * For more summarized news, subscribe to the [/r/SkimThat](http://www.reddit.com/r/SkimThat) subreddit "This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-05-31/australia-home-prices-fall-in-may-as-lending-curbs-start-to-bite) reduced by 70%. (I'm a bot) ***** &gt; The monthly decline comes after regulators tightened lending curbs amid fears of a housing bubble, and the nation&amp;#039;s banks raised interest rates - especially for interest-only loans which are popular with property investors seeking to take advantage of tax breaks.  &gt; The monthly drop was led by declines of 1.3 percent in Sydney and 1.7 percent in Melbourne, the two cities where prices have risen the fastest.  &gt; In Sydney, prices have gained 75 percent in the past five years, ranking it behind only Hong Kong as the world&amp;#039;s least affordable housing market.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6ele2v/australian_house_prices_fell_in_may_for_the_first/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~133825 tl;drs so far."") | [Theory](http://np.reddit.com/r/autotldr/comments/31bfht/theory_autotldr_concept/) | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **housing**^#1 **percent**^#2 **prices**^#3 **demand**^#4 **property**^#5" "This is the best tl;dr I could make, [original](http://www.bbc.co.uk/news/business-40934138) reduced by 61%. (I'm a bot) ***** &gt; The average price of a home in the UK went up by nearly &amp;pound;2,000 to &amp;pound;223,000 in June, according to official figures.  &gt; The Office for National Statistics figures show the wide variation in price movements across the UK. In the month of June, the average price of London home fell &amp;pound;3,000 to &amp;pound;482,000, while a house in the North East of England gained &amp;pound;2,000 to &amp;pound;130,000.  &gt; The biggest change was in Orkney where the average price is 28% higher than a year ago at &amp;pound;148,000.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6txyxk/house_price_growth_holding_steady/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~191667 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **price**^#1 **average**^#2 **while**^#3 **June**^#4 **London**^#5" It actually has already started. People were protesting outside offices that sold defaulted WMPs across China. The government forced landlords to cut the leases of those wealth managers so that they wouldn't have a premises for investors to protest at. Lol.      This news isn't **new** but it shouldn't be ignored either. China does have a problem. "I am not an expert in this stuff, but my understanding is that the debt is in the form of US treasury securities, which mature at set rates and are paid at maturation.  So technically, the US Treasury ""pays off"" a portion of its debt whenever the debt securities mature.  Thus, if China (or any country) buys new Treasury securities at a slower rate than its currently held Treasury securities are maturing, the amount of US debt held by China will decrease.  This is what I hear China has been doing recently." Some highly pessimistic things worth noting to go alongside all the stability and tax break upside that homes generally provide: Negative equity is no joke and basically the only thing that bankrupts the middle classes consistently en masse. The UK is at the end of a huge housing bull run where rents are extremely cheap relative to buying (often in the 1% range within the M25), Brexit is looming and interest rates could well sky rocket with inflation. Borrowing ~500k to buy a highly illiquid asset you might have to fire sale in case of emergency/job loss etc for 300k in a few years when lots of (relatively) cheap rental housing is available to rent risk free, could be argued to be a highly lopsided and dangerous bet vs the alternatives. Locking in 'preferential' mortgage rates can be a huge trap: low interest rates generally increase asset values. If/when they rise, assets fall in value as the demand shrinks, making you highly exposed to huge losses if you need to sell before it is paid off. In the case of housing this can be exceptionally vicious as the liquidity dramatically dries up during falls, meaning fire sales become much more severe than they are for more liquid assets like stock.  Weirdly and unlike most products, people tend to buy the very best house they can get leverage for, rather than work out what they need/want and finding the best value equivalent. If a bank will lend you £20 a day to buy lunch, and you can just afford to pay it, do you hunt out the very best £20 lunch you can every day, or do you make some solid compromises so you can save money for other things etc? You seem to be hunting very close to the absolute peak amount you can spend on these numbers. Related to above, at that level of mortgage/salary you have very little margin for error if either of you lose jobs etc.  Houses are much more expensive to maintain/trade than most people think. You spend ~2-5% every time you buy and sell, and you can easily spend 2-20k+ a year depending what happens just keeping the thing watertight, paid for, liveable and staying up. You need to factor this in and be pessimistic when you do.  Most people don't factor in these costs to the apparent 'index' rise in house values and what they expect to sell for in x years. In reality no buy and hold investor can ever realise even close to the quoted house price returns as they are basically stocks you have to pay 5% each time you buy or sell and then 1-20% percent a year to own - they have to rise dramatically over time for you to even break even after all the costs.  In general you should buy homes to make memories, not money, and to buy them at prices that don't cause you sleepless nights in case of disasters.