Friday, Jun 12, 2009
Property Still 25% Overvalued
Telegraph: House Prices:Further Falls Look Likely
Nothing new, compares property to gold, considers that todays low interest rates have only one way to go and throws in a sprinkling of loan to income ratios and concludes, as anyone who is not in denial concludes, that a property that is already down 21% is still 25% overvalued. Assume once again this is why Moody's said, "the assumption now is 40% falls" but stress tested for 60% just as the FSA stress tested for 50%. Eventually the REALITY will filter through to mainstream thought and we can all get back on with trying to pay for the mess the UK got in trying to support an inflated property market.
Posted by sybil13 @ 08:19 AM (534 views) Add Comment
2 Comments
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1. george monsoon said...
Where do people get this rubbish?
How can the price of gold dictate how much a house is worth? At this point it may be fair to make the statement that I understand nothing of the financial market.
I have always seen houseprices to be in line with affordability.. i.e. how much you can borrow, based on your income and how much you can pay back each month.
This is drivel. Gold is gold, houses are houses and my wage is static. You do the maths.
2. inbreda said...
I still think gold is a useful "base". It is the best measure of value (with a few caveats). A house is a house and gold is gold - you hit the nail on the head there George - neither has changed. GBP on the hand has been devalued, expanded, printed and kicked in the nuts.