Re: Re: Trichet Signals ECB Interest Rate Hike (18/11/2005)

Very true Graham.
But higher costs lead to cutbacks elsewhere, and architects’ grand designs get binned, or at least curtailed. Or worse, projects go on hold, so less work for everyone…now that is a ripple effect!
In Hong Kong, where admittedly the property market resembles more the behaviour of a casino, a 1-2% swing in rates quickly turns boomtown into slumptown.
Given that most of the boom in development and sales is fuelled by cheap credit, it would be interesting to know where the inflection point is and things go pear-shaped. I live overseas but quite a few of my mates back home have 2 to 3 houses and are fully leveraged. Who said the paddies are afraid of risk!!