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Emma Linnane in her apartment in Dublin. Its value has declined by $100,000.
The collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices swooning from the Irish countryside and the Spanish coast to Baltic seaports and even parts of northern India.
Multimedia
This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes but jobs as well.
In Ireland, Spain, Britain and elsewhere, housing markets that soared over the last decade are falling back to earth. Property analysts predict that some countries, like this one, will face an even more wrenching adjustment than that of the United States, including the possibility that the downturn could become a wholesale collapse.
To some extent, the world’s problems are a result of American contagion. As home financing and credit tightens in response to the crisis that began in the subprime mortgage market, analysts worry that other countries could suffer the mortgage defaults and foreclosures that have afflicted California, Florida and other states.
Citing the reverberations of the American housing bust and credit squeeze, the International Monetary Fund last Wednesday cut its forecast for global economic growth this year and warned that the malaise could extend into 2009.
“The problems in the U.S. are being transmitted to Europe,” said Michael Ball, professor of urban and property economics at the University of Reading in Britain, who studies housing prices. “What’s happening now is an awful lot more grief than we expected.”
For countries like Ireland, where prices were even more inflated than in the United States, it has been a painful education, as homeowners learn the American vocabulary of misery.
“We know we’re already in negative equity,” said Emma Linnane, a 31-year-old university administrator.
She bought a cozy, one-bedroom apartment in the Dublin suburbs with her fiancé, Paul Colgan, in May 2006, at the peak of the market. They paid $575,000 — at least $100,000 more than it would fetch today. “I sometimes get shivers thinking about it,” Ms. Linnane said, “but I’ll let the reality hit me when I go to sell it.”
That reality is spreading. Once-sizzling housing markets in Eastern Europe and the Baltic states are cooling rapidly, as nervous Western Europeans stop buying investment properties in Warsaw, Tallinn, Estonia and other real estate Klondikes.
Further east, in India and southern China, prices are no longer surging. With stock markets down sharply after reaching heady levels, people do not have as much cash to buy property. Sales of apartments in Hong Kong, a normally hyperactive market, have slowed recently, with prices for mass-market flats starting to drop.
In New Delhi and other parts of northern India, prices have fallen 20 percent over the last year. Sanjay Dutt, an executive director in the Mumbai office of Cushman & Wakefield, the real estate firm, describes it as an erosion of confidence.
Much of the retrenchment seems to be following the basic law of gravity: what goes up must come down. With low interest rates helping to inflate housing bubbles in many countries, economists said the confluence of falling prices was predictable, if unsettling.
This is not the first housing downturn to cross borders, but its reverberations have been amplified by the integration of financial markets. When faulty American mortgages end up on the books of European banks, the problems of the United States aggravate the world’s problems.
Consider Britain, which had one of Europe’s most robust housing markets, with less of an oversupply than in Ireland or Spain. Then last summer came the subprime crisis across the Atlantic.
Within two months, mortgage approvals dropped 31 percent, compared with the previous year. And by March, average housing prices had fallen 2.5 percent, the largest monthly decline since 1992.
“The boom in house prices was actually much bigger here than in the U.S.,” said Kelvin Davidson, an economist at Capital Economics in London. “If anything, people should be more worried than in the U.S.”
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SELLING TO THE OTHER THREE BILLION A cellphone shop in Accra, Ghana, which carries and repairs a variety of handsets.
If you need to reach Jan Chipchase, the best, and sometimes only, way to get him is on his cellphone. The first time I spoke to him last fall, he was at home in his apartment in Tokyo. The next time, he was in Accra, the capital of Ghana, in West Africa.
Several weeks after that, he was in Uzbekistan, by way of Tajikistan and China, and in short order he and his phone visited Helsinki, London and Los Angeles. If you decide not to call Jan Chipchase but rather to send e-mail, the odds are fairly good that you’ll get an “out of office” reply redirecting you back to his cellphone, with a notation about his current time zone — “GMT +9” or “GMT -8” — so that when you do call, you may do so at a courteous hour.
‘‘HUMAN-CENTERED DESIGN’’ Chipchase talks to Accra street vendors about what an ideal phone (ideally made by Nokia) might do.
Keep in mind, though, that Jan Chipchase will probably be too busy with his job to talk much anyway. He could be bowling in Tupelo, Miss., or he could be rummaging through a woman’s purse in Shanghai. He might be busy examining the advertisements for prostitutes stuck up in a São Paulo phone booth, or maybe getting his ear hairs razored off at a barber shop in Vietnam. It really depends on the moment.
Chipchase is 38, a rangy native of Britain whose broad forehead and high-slung brows combine to give him the air of someone who is quick to be amazed, which in his line of work is something of an asset. For the last seven years, he has worked for the Finnish cellphone company Nokia as a “human-behavior researcher.” He’s also sometimes referred to as a “user anthropologist.” To an outsider, the job can seem decidedly oblique.
His mission, broadly defined, is to peer into the lives of other people, accumulating as much knowledge as possible about human behavior so that he can feed helpful bits of information back to the company — to the squads of designers and technologists and marketing people who may never have set foot in a Vietnamese barbershop but who would appreciate it greatly if that barber someday were to buy a Nokia.
What amazes Chipchase is not the standard stuff that amazes big multinational corporations looking to turn an ever-bigger profit. Pretty much wherever he goes, he lugs a big-bodied digital Nikon camera with a couple of soup-can-size lenses so that he can take pictures of things that might be even remotely instructive back in Finland or at any of Nokia’s nine design studios around the world. Almost always, some explanation is necessary.
A Mississippi bowling alley, he will say, is a social hub, a place rife with nuggets of information about how people communicate. A photograph of the contents of a woman’s handbag is more than that; it’s a window on her identity, what she considers essential, the weight she is willing to bear. The prostitute ads in the Brazilian phone booth? Those are just names, probably fake names, coupled with real cellphone numbers — lending to Chipchase’s theory that in an increasingly transitory world, the cellphone is becoming the one fixed piece of our identity.
Last summer, Chipchase sat through a monsoon-season downpour inside the one-room home of a shoe salesman and his family, who live in the sprawling Dharavi slum of Mumbai. Using an interpreter who spoke Tamil, he quizzed them about the food they ate, the money they had, where they got their water and their power and whom they kept in touch with and why. He was particularly interested in the fact that the family owned a cellphone, purchased several months earlier so that the father, who made the equivalent of $88 a month, could run errands more efficiently for his boss at the shoe shop. The father also occasionally called his wife, ringing her at a pay phone that sat 15 yards from their house.
Chipchase noted that not only did the father carry his phone inside a plastic bag to keep it safe in the pummeling seasonal rains but that they also had to hang their belongings on the wall in part because of a lack of floor space and to protect them from the monsoon water and raw sewage that sometimes got tracked inside. He took some 800 photographs of the salesman and his family over about eight hours and later, back at his hotel, dumped them all onto a hard drive for use back inside the corporate mother ship. Maybe the family’s next cellphone, he mused, should have some sort of hook as an accessory so it, like everything else in the home, could be suspended above the floor.
This sort of on-the-ground intelligence-gathering is central to what’s known as human-centered design, a business-world niche that has become especially important to ultracompetitive high-tech companies trying to figure out how to write software, design laptops or build cellphones that people find useful and unintimidating and will thus spend money on.
Several companies, including Intel, Motorola and Microsoft, employ trained anthropologists to study potential customers, while Nokia’s researchers, including Chipchase, more often have degrees in design. Rather than sending someone like Chipchase to Vietnam or India as an emissary for the company — loaded with products and pitch lines, as a marketer might be — the idea is to reverse it, to have Chipchase, a patently good listener, act as an emissary for people like the barber or the shoe-shop owner’s wife, enlightening the company through written reports and PowerPoint presentations on how they live and what they’re likely to need from a cellphone, allowing that to inform its design.
- In: by way of Tajikistan | Cellphone | china | end | global | Help | Helsinki | London | Los Angeles | New York Times | Nokia | Poverty | Uzbekistan
- Leave a Comment
SELLING TO THE OTHER THREE BILLION A cellphone shop in Accra, Ghana, which carries and repairs a variety of handsets.
If you need to reach Jan Chipchase, the best, and sometimes only, way to get him is on his cellphone. The first time I spoke to him last fall, he was at home in his apartment in Tokyo. The next time, he was in Accra, the capital of Ghana, in West Africa.
Several weeks after that, he was in Uzbekistan, by way of Tajikistan and China, and in short order he and his phone visited Helsinki, London and Los Angeles. If you decide not to call Jan Chipchase but rather to send e-mail, the odds are fairly good that you’ll get an “out of office” reply redirecting you back to his cellphone, with a notation about his current time zone — “GMT +9” or “GMT -8” — so that when you do call, you may do so at a courteous hour.
‘‘HUMAN-CENTERED DESIGN’’ Chipchase talks to Accra street vendors about what an ideal phone (ideally made by Nokia) might do.
Keep in mind, though, that Jan Chipchase will probably be too busy with his job to talk much anyway. He could be bowling in Tupelo, Miss., or he could be rummaging through a woman’s purse in Shanghai. He might be busy examining the advertisements for prostitutes stuck up in a São Paulo phone booth, or maybe getting his ear hairs razored off at a barber shop in Vietnam. It really depends on the moment.
Chipchase is 38, a rangy native of Britain whose broad forehead and high-slung brows combine to give him the air of someone who is quick to be amazed, which in his line of work is something of an asset. For the last seven years, he has worked for the Finnish cellphone company Nokia as a “human-behavior researcher.” He’s also sometimes referred to as a “user anthropologist.” To an outsider, the job can seem decidedly oblique.
His mission, broadly defined, is to peer into the lives of other people, accumulating as much knowledge as possible about human behavior so that he can feed helpful bits of information back to the company — to the squads of designers and technologists and marketing people who may never have set foot in a Vietnamese barbershop but who would appreciate it greatly if that barber someday were to buy a Nokia.
What amazes Chipchase is not the standard stuff that amazes big multinational corporations looking to turn an ever-bigger profit. Pretty much wherever he goes, he lugs a big-bodied digital Nikon camera with a couple of soup-can-size lenses so that he can take pictures of things that might be even remotely instructive back in Finland or at any of Nokia’s nine design studios around the world. Almost always, some explanation is necessary.
A Mississippi bowling alley, he will say, is a social hub, a place rife with nuggets of information about how people communicate. A photograph of the contents of a woman’s handbag is more than that; it’s a window on her identity, what she considers essential, the weight she is willing to bear. The prostitute ads in the Brazilian phone booth? Those are just names, probably fake names, coupled with real cellphone numbers — lending to Chipchase’s theory that in an increasingly transitory world, the cellphone is becoming the one fixed piece of our identity.
Last summer, Chipchase sat through a monsoon-season downpour inside the one-room home of a shoe salesman and his family, who live in the sprawling Dharavi slum of Mumbai. Using an interpreter who spoke Tamil, he quizzed them about the food they ate, the money they had, where they got their water and their power and whom they kept in touch with and why. He was particularly interested in the fact that the family owned a cellphone, purchased several months earlier so that the father, who made the equivalent of $88 a month, could run errands more efficiently for his boss at the shoe shop. The father also occasionally called his wife, ringing her at a pay phone that sat 15 yards from their house.
Chipchase noted that not only did the father carry his phone inside a plastic bag to keep it safe in the pummeling seasonal rains but that they also had to hang their belongings on the wall in part because of a lack of floor space and to protect them from the monsoon water and raw sewage that sometimes got tracked inside. He took some 800 photographs of the salesman and his family over about eight hours and later, back at his hotel, dumped them all onto a hard drive for use back inside the corporate mother ship. Maybe the family’s next cellphone, he mused, should have some sort of hook as an accessory so it, like everything else in the home, could be suspended above the floor.
This sort of on-the-ground intelligence-gathering is central to what’s known as human-centered design, a business-world niche that has become especially important to ultracompetitive high-tech companies trying to figure out how to write software, design laptops or build cellphones that people find useful and unintimidating and will thus spend money on.
Several companies, including Intel, Motorola and Microsoft, employ trained anthropologists to study potential customers, while Nokia’s researchers, including Chipchase, more often have degrees in design. Rather than sending someone like Chipchase to Vietnam or India as an emissary for the company — loaded with products and pitch lines, as a marketer might be — the idea is to reverse it, to have Chipchase, a patently good listener, act as an emissary for people like the barber or the shoe-shop owner’s wife, enlightening the company through written reports and PowerPoint presentations on how they live and what they’re likely to need from a cellphone, allowing that to inform its design.
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