Syok sendiri.

After QE tapering, interest rate is expected to return to pre-2008 level e.g. 3% higher than current.

How many people will be trapped?

Car bubble existed in kangkong land but burst in 1997. At one period, a 6 months old potong wira could worth the same price or higher than brand new.

This post has been edited by icemanfx: Jan 15 2014, 08:16 PM

House prices in Hong Kong are overvalued by an estimated 30-40% - one of the highest overvaluations in the world. Based on the IMF estimate of the price-to-rent ratio, it's 33 times more expensive to buy a property in the city than to rent.

When the last bubble burst in 1997 during the Asian financial crisis, Hong Kong's property prices fell by more than 60% and continued to decline for six years. Now, house prices are 13 times the average salary - higher than even during the last bubble.

The trouble with bubbly markets is that once interest rates rise - which is starting to happen with the US Fed reining back on its cheap cash injections as of this month - so does the risk of the bubble bursting.

http://www.bbc.co.uk/news/business-25742539

Land in HK is more limited than kv.

Price to rent ratio of 33 is equivalent to rent is 3% of property value.

Scandinavian Debt Crisis Waiting to Happen Puzzles Krugman

Scandinavia, which attracted investors during Europe’s sovereign debt crisis, is now coming under international scrutiny on concern that record household debt levels from Denmark to Sweden aren’t sustainable.

“You wonder if that’s a crisis waiting to happen,” Nobel Laureate Paul Krugman said in a Jan. 9 interview in Copenhagen. “I’m not sure, but it’s nervous-making.”

In Denmark, consumers owe their creditors 321 percent of disposable incomes, a world record that the Paris-based OECD said in November demands a policy response. In Sweden, debt by that measure is close to 180 percent, a level the government and central bank say can’t be allowed to rise. Norway’s central bank has struggled to find a policy mix that addresses its 200 percent private debt burden.

http://www.bloomberg.com/news/2014-01-13/n...sing-debts.html