The Nineties

[Mildura]

can we all join in?

I'm sure you can if you wish.

I shan't be bothering to waste my time and money on such a dubious venture though.

ETA: Just seen your link, not exactly a selection to get you excited is it?!

Edited February 15, 2012 by Mildura

[Bruce Banner]

I have come to the conclusion there will be no crash, just a slow orderly deflation....house prices crash the economy crashes, that can't be allowed to happen, apart from that a crash would have happened big time if it had not been for the implementation of zero interest rates.......property falling with zero interest rates is telling you they were massively overpriced, so there is still plenty of space to achieve equilibrium.....went up too far and to fast, coming down surely and steadily.

The end result is the same for those who wait, a sensibly priced house .

[winkie]

The end result is the same for those who wait, a sensibly priced house .

...always right as usual.

[Bruce Banner]

I would agree that illiquid assets and cash deposits are not strictly comparable, and the likelihood for many parts of the country is that property values are likely to stagnate, at best, for a number of years to come. However I can understand how someone who is retired say, with cash sat in the bank earning them 1-2%pa would be tempted by purchasing a property to let out which may give them a better return. Whether that is a wise decision for them to take will need to be judged in years to come.

In a way are those that do not wish to buy speculating just as much as those they are currently buying? When it comes to trying to predict exactly where prices are heading there are those that don't know and those that don't know they don't know.

And if they're getting close to 4%pa?

[Bruce Banner]

I notice you live in the South East - perhaps you should have targeted your post at that area. I think that regionally we are already seeing good drops and in my region 50% plus.

The OP is purely an opinion piece and I could have written instead that based on the HPC where I live then prices were going back to the Nineties and 4 times average salary and could have produced evidence for it. However that would have been putting a regional HPC in the context of a UK wide HPC which will be very different.

South East Australia, as stated in another thread .

[Mildura]

And if they're getting close to 4%pa?

Well if it were me I'd leave the money in the bank, but it's a rare day when my relatives listen to my advice!

I certainly wouldn't be buying a run down terrace on the outskirts of Newcastle, I can think of far too many fun things to spend my cash on instead, after all we're here for a good time not a long time.

[Bruce Banner]

South East Australia, as stated in another thread .

http://www.housepricecrash.co.uk/forum/index.php?showtopic=174874&view=findpost&p=3254846

[Mildura]

South East Australia, as stated in another thread .

On the move to Holland I seem to recall.

[Bloo Loo]

I'm sure you can if you wish.

I shan't be bothering to waste my time and money on such a dubious venture though.

ETA: Just seen your link, not exactly a selection to get you excited is it?!

dunno..your friend is snapping them up.

[Sir Harold m]

I see a bit of a flaw in the argument that today's interest rates being low indicate hp multiples should be higher re: salaries.

Aren't low ir's also an indication of low expected growth in incomes and wealth (nominally) hence the prevailing interest rate should have no effect on hp/income multiple. ?

Edited February 15, 2012 by Sir Harold m

[TheCountOfNowhere]

Have we got another troll who doesn't actually realise we have already had a decent crash, down about thirty percent in real terms. What he fails to realise is that crazy asking prices in his local area are not the actual purchase price anyone with half a brain is paying. its sad that the young and some idiots are still being conned into paying well over the odds for some basic shelter. This whole thing Will not play out well for anyone paying near 2007 prices.

[SNACR]

If you call mortgages, what they in fact really are, a wages advance - so it's for a lender a gamble on the person's lifetime earnings potential.

Does it then look plausible that this country's under-30s will be in secure long-term employment with significantly higher salaries than previous generations?

Personally, I look and have serious doubts if many will find any secure paid employment whatsoever.

[SNACR]

I am seeing prices drop here in Northern Ireland even though we have already had a 50% crash. There was a middle group of houses put on at 2007 prices and still languishing on the EA books. One I saw yesterday had dropped from 395K to 225K. So when the middle lot gets real if they want to sell houses NI will look more like a 60% drop.

So many young people were sucked in to the property ladder media frenzy and now they are paying the price for it - either re-possession or living on very little while their mortgage eats up most of their wages. What a life.

Paying for an over priced property certainly beats renting -- I don't think.

If NAMA was forced into a proper fire sale in the republic would that pull down prices in NI significantly?

[Bruce Banner]

So many young people were sucked in to the property ladder media frenzy and now they are paying the price for it - either re-possession or living on very little while their mortgage eats up most of their wages. What a life.

Paying for an over priced property certainly beats renting -- I don't think.

I saw a TV advertisement for Nationwide this evening..

"Nationwide, we're on your side. 100% mortgages to help first time buyers get onto the property ladder".

Shameful, anything to turn a fast buck at the expense of youngsters embarking on the road to poverty .

[Guest_Seethefuture_*]

Been reading this forum for about 5 years, but just registered as I wholeheartedly agree with the opening post, granular reduction over years of the real value of houses.

ZIRP for 5-10 years, the increase in both disposable cash and double incomes will keep prices high. The rental laws in this country also lend themselves to high house prices as does the ingrained mindset of the British. Yorkshire Building Society are offering 10 year mortgages at 4.5%. Plus TPTB will not let house prices collapse due to the political implications.

Adding onto that, starter houses in my area, Sheffield, have reached what I consider within the reach of FTBs, single income with decent deposit, at around the 80-90k mark.

Not a troll, agree with the majority of the sentiment on this site, just think there are so many fundamental reasons why this time it might just be wrong.

[vlad the impaler]

An interesting thread. My contribution is this:

I personally don't believe that things will go back to the way they were, and I am sorry to say that 'this time it really is different'. Why? The medium we are using to have this discussion.

The rise of the internet, and indeed the absolutely massive increase in both the speed and volume of personal communications is, in my opinion the difference. The internet is a world changer - and it is tearing up the rule book of what came before. The spivs and sharks have not been slow in exploiting it. Aleady we have viral marketing, hype and b*llcrap being spread around by PR companies pushing 'the next big thing'. The BBC in the day at least seems to one big plug for either new movies (Breakfast Time), Antiques (Bargain Hunt) or Property (HUTH etc). The speed with which news travels was unthinkable in the mid 90s. Bubbles are being artifically inflated by certain interested parties (gold, classic cars, collectable watches, houses, even Ebay is not immune. People will collect anything, and the interent has let the cat out of the bag. Very niche and geeky things I used to collect years ago - all have gone nuts in terms of price, and this is because so many people have access to these things through web sales. There are no more bargains, everyone is now too savvy and switched on for that.

So, I am afraid I don't think houses will drop much. The messgae about what a great investment they are is too deeply ingrained in people. The moment something is perceived as a 'bargain', the news travels in a flash and 1000 people jump on it. No longer a bargain.....

[19 year mortgage 8itch]

Been reading this forum for about 5 years, but just registered as I wholeheartedly agree with the opening post,

how fortuitous

[Si1]

An interesting thread. My contribution is this:

I personally don't believe that things will go back to the way they were, and I am sorry to say that 'this time it really is different'. Why? The medium we are using to have this discussion.

The rise of the internet, and indeed the absolutely massive increase in both the speed and volume of personal communications is, in my opinion the difference. The internet is a world changer - and it is tearing up the rule book of what came before. The spivs and sharks have not been slow in exploiting it. Aleady we have viral marketing, hype and b*llcrap being spread around by PR companies pushing 'the next big thing'. The BBC in the day at least seems to one big plug for either new movies (Breakfast Time), Antiques (Bargain Hunt) or Property (HUTH etc). The speed with which news travels was unthinkable in the mid 90s. Bubbles are being artifically inflated by certain interested parties (gold, classic cars, collectable watches, houses, even Ebay is not immune. People will collect anything, and the interent has let the cat out of the bag. Very niche and geeky things I used to collect years ago - all have gone nuts in terms of price, and this is because so many people have access to these things through web sales. There are no more bargains, everyone is now too savvy and switched on for that.

So, I am afraid I don't think houses will drop much. The messgae about what a great investment they are is too deeply ingrained in people. The moment something is perceived as a 'bargain', the news travels in a flash and 1000 people jump on it. No longer a bargain.....

what a load of old codswallop

speculation is 1000s of years old, human nature is not going top be changed by the internet

what you seem to be implying is that the internet makes for a more efficient market with more informed participants

which is patently untrue given that we have just also suffered the biggest credit crunch in human history

what can be overvalued in the age of the internet can also be undervalued in the age of the internet

what about Northern Ireland? Japan?

and if everybody was so well financially informed - why oh were the trading volumes for the stockmarket so low in early 2009? why were almost everybody I met giving me funny looks for me buying up shares by the bucketload?

you provide no evidence for your assertion, which remains just that, an assertion without foundation

house prices are toast

[Si1]

So, I am afraid I don't think houses will drop much. The messgae about what a great investment they are is too deeply ingrained in people.

sorry but I had to highlight this

what an utterly uneducated ill-thought-out lightweight and generally unsupportable lamentable piece of bum-crunching bubble speak

hilarious

[dervis]

An interesting thread. My contribution is this:

I personally don't believe that things will go back to the way they were, and I am sorry to say that 'this time it really is different'. Why? The medium we are using to have this discussion.

The rise of the internet, and indeed the absolutely massive increase in both the speed and volume of personal communications is, in my opinion the difference. The internet is a world changer - and it is tearing up the rule book of what came before. The spivs and sharks have not been slow in exploiting it. Aleady we have viral marketing, hype and b*llcrap being spread around by PR companies pushing 'the next big thing'. The BBC in the day at least seems to one big plug for either new movies (Breakfast Time), Antiques (Bargain Hunt) or Property (HUTH etc). The speed with which news travels was unthinkable in the mid 90s. Bubbles are being artifically inflated by certain interested parties (gold, classic cars, collectable watches, houses, even Ebay is not immune. People will collect anything, and the interent has let the cat out of the bag. Very niche and geeky things I used to collect years ago - all have gone nuts in terms of price, and this is because so many people have access to these things through web sales. There are no more bargains, everyone is now too savvy and switched on for that.

So, I am afraid I don't think houses will drop much. The messgae about what a great investment they are is too deeply ingrained in people. The moment something is perceived as a 'bargain', the news travels in a flash and 1000 people jump on it. No longer a bargain.....

Know what you mean; its a really different environment. What will be reallly interesting is to see what kind of country we'll be living in ten year's hence, when this thread will be dug up and pored over!

You cannot treat the UK as a whole where house prices are concerned. Trust me, Northern Ireland is not London! Within London itself there are massive variations. In my area of South London I'd seen prices and properties stagnate for ages; but worryingly, in the last two months or so, I've seen a rash of activity, with quite a few sold signs up, and there are so many that they cannot all have taken losses. The house across the road from me went in three weeks. What the hell is going on? I wonder if some of that foreign money is being invested into other areas of the city?

[Greg Bowman]

What about the trend for increasing precarity of employment? Okay, so both husband and wife might be employed but they are more likely to experience unemployment with permanent jobs increasingly hard to come by. The difference between now and when a single wage earner was supporting the household is also that the single wage earner, barring the loss of the industry they were employed in, may well have had a job for life.

Would like to see some statistics about when having two wage earners became increasingly common but I think that trend was on the rise long before the mid-nineties bottom for the housing market.

Slightly old data but there hasn't been a dramatic change in job tenure since the 1970's http://www.cepr.org/pubs/eep/articles/

[Greg Bowman]

sorry but I had to highlight this

what an utterly uneducated ill-thought-out lightweight and generally unsupportable lamentable piece of bum-crunching bubble speak

+1 but so was this

You think that people will never realise or be bothered that they have become debt slaves and the government can print wealth?

Talking about a nation that pours billions into the national lottery and engages in binge drinking and gutter culture like Big Brother

[Milton]

what a load of old codswallop

house prices are toast

+1. But it was quite funny/nonsensical codswallop.

Edited February 16, 2012 by Milton

[rantnrave]

An interesting thread. My contribution is this:

I personally don't believe that things will go back to the way they were, and I am sorry to say that 'this time it really is different'. Why? The medium we are using to have this discussion.

The rise of the internet, and indeed the absolutely massive increase in both the speed and volume of personal communications is, in my opinion the difference. The internet is a world changer - and it is tearing up the rule book of what came before. The spivs and sharks have not been slow in exploiting it. Aleady we have viral marketing, hype and b*llcrap being spread around by PR companies pushing 'the next big thing'. The BBC in the day at least seems to one big plug for either new movies (Breakfast Time), Antiques (Bargain Hunt) or Property (HUTH etc). The speed with which news travels was unthinkable in the mid 90s. Bubbles are being artifically inflated by certain interested parties (gold, classic cars, collectable watches, houses, even Ebay is not immune. People will collect anything, and the interent has let the cat out of the bag. Very niche and geeky things I used to collect years ago - all have gone nuts in terms of price, and this is because so many people have access to these things through web sales. There are no more bargains, everyone is now too savvy and switched on for that.

So, I am afraid I don't think houses will drop much. The messgae about what a great investment they are is too deeply ingrained in people. The moment something is perceived as a 'bargain', the news travels in a flash and 1000 people jump on it. No longer a bargain.....

I take the opposite view - the internet is empowering consumers to spot and avoid overpriced crud, whether it's a house or a DVD on Amazon.

[macca]

I think the attitude of this Gov't and the previous is that they don't really care whether property is affordable to ordinary people. They just want to shift boxes at the highest possible price and are quite happy for foreign investors or the buy to let/landlord brigade to rule the market. They appear to care more about creating wealth rather than providing a family base. All the govt is concerned with is income and they do not care how they get it, the same mindset they appear to have where jobs are concerned.

IF prices did fall, how long would they stay affordable with all that money sloshing around in banks earning no interest? Surely it would create a situation where all the best houses were snapped up very quickly, all going to investors for rental.