Saturday, Apr 26, 2008
No crash
daily mail: Overhyped
Overhyped property crisis...
Posted by greenbay @ 06:48 PM (962 views) Add Comment
18 Comments
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1. Stevie Dee said...
Bit late Greenbay.. the same was posted on here from the FT this morning. But you are totally right Greenbay, no crisis, things are fine, in fact properties should increase by 10% this year.
2. Mytimeisnigh said...
Oh my god...even Greenbay's making posts about ten percent falls....
3. tick tock said...
'REVALATION' - Statistics show house prices would have to fall by 25 per cent - more than double the falls seen in the early 90s - before the country faced another negative equity crisis.'
Maybe, but given that UK housing is roughly 60% overvalued by any historically accurate modal, why does a ' serious pain will only be felt at 25% fall' type of story make you feel any better?
I would actually seriously dispute the premises of this spurious 'fact' anyway, I believe pain will be serious for many at 5% let alone 25%. But believing that a 25% fall will be the 'bottom' of this bust seems to come from the same book of fantasy that suggested 'house prices only ever rise' to me. And, Lets face it, it does.
Please explain why the fall would/might/ should stop at 25%? There is simply no reason at all to suggest that it would/will.
4. Mark Wadsworth said...
"Britain will not suffer a repeat of negative equity crisis which blighted the 1990s unless there are unprecedented slumps in house prices, according to figures from the Council of Mortgage Lenders."
I might as well say
"Britain will not be wiped out by a mysterious infectious illness which blighted the 14th century unless we have another Plague"
"The English football team will not crash out of the next World Cup unless we lose on penalties"
"Nothing bad will ever happen unless something bad happens"
5. An Bearin Bui said...
Meanwhile in health news, the British Medical Journal announced that British people are unlikely to suffer obesity-related health problems provided they avoid excessive eating.
6. Jimmyb said...
Don't forget that the papers only want to print good news for the droves of middle class people who own property and read the silly paper. They are under the mishaprehension that high house prices are good, what they fail to realise is that this is just the start of mass inflation all over the rest of the economy. This is already happening in fuel and food, the older property owning generation will be the ones first to complain when their £65 pension can just about buy a lump of coal and a carrot.
7. bystander said...
Almost exactly the same article as in the FT posted earlier (http://www.ft.com/cms/s/0/59a5ee60-12fc-11dd-8d91-0000779fd2ac.html). Do these moronic journalists just copy and paste each others words or is there a more sinister PR plot afoot. VI's protecting their investments, including GB and crew, by whatever means necessary. Too late guys, the rot that began in 1997, has eaten through the roots and the tree is falling.
8. titaniccaptain said...
"Britain will not suffer a repeat of negative equity crisis which blighted the 1990s unless there are unprecedented slumps in house prices, according to figures from the Council of Mortgage Lenders."..................The mail said that???? well they also say................
http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=440384&in_page_id=57
"House prices falling 'faster than 90s crash'
Becky Barrow, Daily Mail
15 April 2008 House prices have taken their worst battering since records began, a report published today reveals. The study showed that prices are falling at the fastest pace for 30 years. It painted a picture of lower prices, few buyers and desperate sellers - with worse to come...........it gets better they also say..........
http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=440590&in_page_id=57
"House price slump fears deepen
Daily Mail
21 April 2008
Falling house prices could escalate into a crash if the mortgage crisis is not halted, a report warns today.........the rest makes interesting reading
9. titaniccaptain said...
Good posting though greenbay keep it up. The great thing about the press is that it reflects the VI of the journalists who write the articles. What is to be taken notice of though Greenbay is the impact of the headlines printed which are sometimes have more impact than the content because when you see a newspaper on a stand its the headline that goes straight to the subconscious when you pass it and that is having a massive effect on the masses and the decisions they make in regards to the property market after viewing relative headlines relating to the property market given the majority of negative press towards the house prices........Greenbay...........house prices are falling fast and will continue to do so no matter what measures this government take
10. sold out said...
answer to greenbays earlier comments
"we may see a 10% drop purely from sentiment or maybe 20% on new builds, but im sorry to tell you mid next year we will see double digit growth again.......arrrrrrrr now where did i put my violin...."
Thanks for your prediction.But please can you enlighten us all on where you get your misplaced optomism? Are you serious? We are in the midst of the biggest financial crisis for years. There is also a global shortage of oil and food that are pushing up prices.We are the most indebted nation of all the major economies,and if all that wasn't bad enough we have an unelected incompetent leader and a cabinet that appear to have the collective ability of a late seventies student union.
How can you possibly believe that this property crash is just going to be with us for 2008,and the market will then all of a sudden recover again and by mid 2009 be back up to double digit growth again.How is that going to happen?
Stick to what you know best,BTL,Ponzi schemes and get rich quick.As for your Violin i reckon your going to be playing it for quite a while,well into 2011 and beyond.
11. Amjidk said...
"according to figures from the Council of Mortgage Lenders", that says it all really!
12. str 2007 said...
I'm old enough to remember the last crash - just. Bought an XR2 instead of going halves on a flat with a mate of mine.
Best financial decision I made for a long time.
Prices in Hampshire did drop 25-30% I don't care what Halifax numbers say.
The flat my mate finally bought with his brother went down from 60k to just over 40k.
The house next door to my parents went down from 180k to 125k.
Just been talking someone in Marlow (one of those areas that estate agents will tell is immune from falls) and they confirmed that the 3 bed semi's currently valued at 300k (but not selling) dropped from 135k to 84k. After having been sold new in '83 for 40k.
Current prices cannot be justified (not even in bubble btl land).
Significant falls are coming.
I do believe there will be some price support at -20/25% (-40% for flats) nominal though. (Obviously this will depend on the economic climate in 18-24 months).
13. Nickpike said...
I purchased a house at the peak in the 80/90's, but had sold a more expensive house, so the larger difference did me good.
However, price was 125k. Tried to sell 5 years later because my job moved to another area, and it was valued at 82k.
That was a drop of about a third.
This was in 'middle' England,
14. Scottie said...
How much will prices fall no one knows, to many vartiables. How fast, guess again,I remember Ireland in the early 80s my property dropped over 30 % in a year.. In vancouver Canada 81 average price was $ 200,000 six months later $ 120,000 It can be fast and very nasty so place your bets but dont assume anyone can tell the future..
15. Orwell said...
"...we have an unelected incompetent leader and a cabinet that appear to have the collective ability of a late seventies student union....."
THAT IS JUST PURE POETRY!
a cabinet that appear to have the collective ability of a late seventies student union.... HA HA
16. alan said...
Some journalists are desparate for house prices to go up, or at least flatline. They are not alone - so do some readers of the Mail. They think if they say "no price falls" enough times, things will be OK.
The situation is now grim for many of the people I know who have second mortgaged their houses to the max and face retirement. They can no longer have a celebrity lifestyle living beyond their means. Anyone want to buy a Harley?
Statistics from Halifax and Nationwide over the next few days will provide a useful indicator of where we are going.
17. Nubbers said...
From the article: 'Negative equity is less of a problem now than in the 90s is because fewer homes were bought at the height of the recent boom than in the late 1980s'.
When I had negative equity that was twice my annual income in '92, I felt like I was the only one in the whole country. Indeed I have not come across a single case worse than mine, either personally or in print.
However, this time round, I seem to see a lot of people, mostly recent BTLers who are heading for much worse. This could becase I now read this news blog, or it could be that the numbers of people who are hit by negative equity will be determined by the subtleties of the distribution of recent mortgages, LTVs and property types.
This time round I have the luxury of studying the whole thing as an interested bystander, having sold up last year (more by accident than design).
18. nubbers said...
From the article: 'Negative equity is less of a problem now than in the 90s is because fewer homes were bought at the height of the recent boom than in the late 1980s.'
When I had negative equity of twice my annual income in 1992, it seemed to be that I was the only one in the whole country. Indeed, I have not come across a worse case, either personally or in print.
However, this time round, I seem to see a lot of people who are heading for much worse, mostly recent BTLers. This could be because I read this news blog, or it could be that the numbers who are hit by negative equity will be determined by the subleties of the distribution of LTVs and property types.
This time round, I shall be studying the whole thing just as an interested bystander, having sold up last year (more by accident than design, I have to add).