Phase 1: fighting the downturn
A country is losing international competitiveness and threatens a slowdown. The Central Bank
reacts with low interest rates by the usual rates of economic growth as long as possible up
to obtain.
Phase 2: The housing boom created
The low interest rates make debt-financed property purchases attractive. This triggers a 5-10 years
continuing boom in the real estate market. Even though there is no evidence of a bubble, because the
Property price increases are not excessive. In this phase also witnessed the labor intensive
Construction sector was booming. This keeps the unemployment rate is low and covers structural deficits in
other areas.
Phase 3: The boom is excessively
On the face of it the economy is doing well, the perception of risk decreases and all parties
begin to believe that real estate prices "to rise forever." Consumption is booming because of the
rapidly rising real estate value of the population feels richer and unemployment remains
low due to the construction boom.
Phase 4: final phase of the bubble
The vacancy rate of properties is increasing, because by the construction boom and more and more homes coming
Houses on the market. Although the rental rates down is not as fast as prices explode
this stronger than ever. The reason: In the credit sector, creating a so-called "Ponzi scheme". In anticipation
secure profits will be waived for mortgage loans on collateral. More and more people who want a
Real estate can not really afford to be lured by dubious promotions in mortgage loans.
Phase 5: The market reached its peak
The expectation is also rapidly rising rents will be disappointed and the first property owners to try their
non-profitable items to sell. Property prices have stagnated for the first time in many years for 5-6 months.
This step (5) marks the turning point. The bubble bursts and all the economic
Distortions come from now in 5 more levels to light.
Phase 6: First fall in prices of real estate
The relationship between supply and demand tips. Property prices fall for the first time over the year
by 3-5%. The weakest links in the chain (sub-prime borrowers, the latest buyer) can
now no longer pay their mortgages. The industry is widespread optimism: "In the long term real estate
only increase. "
Phase 7: panic erupts
The impending crisis is identified. Real estate speculators are trying their properties as quickly as
possible to get rid of. At the same time rising foreclosures. The drop in prices for real estate
speeded up (to> 10% per annum). The loan loss ratio is picking up strongly, unreasonable credit institutions
have its own experts in the mortgage market are facing bankruptcy and kidnap this failure
in the expectation of improvement.
Phase 8: The bank crash
The first small banks can not hide your layers Chief balance more and go into bankruptcy.
The risk perception among large banks is rising dramatically. The guidelines for lending are
strengthened in all areas. This new mortgage borrowers always presents difficulties. It is
for "Credit Squeeze" (credit institutions do not trust each other more) should be the first large banks
before the bankruptcy.
Phase 9: The rescue measures
Large banks are "too big to fail" and be rescued by the state, because it would bankrupt the entire system
at risk. The state is trying simultaneously to the downturn by slowing economic programs
and throws the Central Bank "printing machine". The rate cuts fall flat, however, as the banks
keep up your interest rates to cover the balance. Simultaneously, the construction activity drops to a historic
Low. Unemployment starts to rise.
Phase 10: The duration of recession
To affect the rescue of the state and the central bank and begin the slow shock-like
Recession. It does not come to a total collapse of the economy but a weak recession.
From this, the country is, however, for very many years, no way out, because the crisis is now no longer
cyclical but structural. "
A country is losing international competitiveness and threatens a slowdown. The Central Bank
reacts with low interest rates by the usual rates of economic growth as long as possible up
to obtain.
Phase 2: The housing boom created
The low interest rates make debt-financed property purchases attractive. This triggers a 5-10 years
continuing boom in the real estate market. Even though there is no evidence of a bubble, because the
Property price increases are not excessive. In this phase also witnessed the labor intensive
Construction sector was booming. This keeps the unemployment rate is low and covers structural deficits in
other areas.
Phase 3: The boom is excessively
On the face of it the economy is doing well, the perception of risk decreases and all parties
begin to believe that real estate prices "to rise forever." Consumption is booming because of the
rapidly rising real estate value of the population feels richer and unemployment remains
low due to the construction boom.
Phase 4: final phase of the bubble
The vacancy rate of properties is increasing, because by the construction boom and more and more homes coming
Houses on the market. Although the rental rates down is not as fast as prices explode
this stronger than ever. The reason: In the credit sector, creating a so-called "Ponzi scheme". In anticipation
secure profits will be waived for mortgage loans on collateral. More and more people who want a
Real estate can not really afford to be lured by dubious promotions in mortgage loans.
Phase 5: The market reached its peak
The expectation is also rapidly rising rents will be disappointed and the first property owners to try their
non-profitable items to sell. Property prices have stagnated for the first time in many years for 5-6 months.
This step (5) marks the turning point. The bubble bursts and all the economic
Distortions come from now in 5 more levels to light.
Phase 6: First fall in prices of real estate
The relationship between supply and demand tips. Property prices fall for the first time over the year
by 3-5%. The weakest links in the chain (sub-prime borrowers, the latest buyer) can
now no longer pay their mortgages. The industry is widespread optimism: "In the long term real estate
only increase. "
Phase 7: panic erupts
The impending crisis is identified. Real estate speculators are trying their properties as quickly as
possible to get rid of. At the same time rising foreclosures. The drop in prices for real estate
speeded up (to> 10% per annum). The loan loss ratio is picking up strongly, unreasonable credit institutions
have its own experts in the mortgage market are facing bankruptcy and kidnap this failure
in the expectation of improvement.
Phase 8: The bank crash
The first small banks can not hide your layers Chief balance more and go into bankruptcy.
The risk perception among large banks is rising dramatically. The guidelines for lending are
strengthened in all areas. This new mortgage borrowers always presents difficulties. It is
for "Credit Squeeze" (credit institutions do not trust each other more) should be the first large banks
before the bankruptcy.
Phase 9: The rescue measures
Large banks are "too big to fail" and be rescued by the state, because it would bankrupt the entire system
at risk. The state is trying simultaneously to the downturn by slowing economic programs
and throws the Central Bank "printing machine". The rate cuts fall flat, however, as the banks
keep up your interest rates to cover the balance. Simultaneously, the construction activity drops to a historic
Low. Unemployment starts to rise.
Phase 10: The duration of recession
To affect the rescue of the state and the central bank and begin the slow shock-like
Recession. It does not come to a total collapse of the economy but a weak recession.
From this, the country is, however, for very many years, no way out, because the crisis is now no longer
cyclical but structural. "
No comments:
Post a Comment