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championmongo1

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Posts posted by championmongo1

  1. My situation is also well known here.

    You are correct. I sold my house last year.

    Reading posts and asking questions on this website, stopped me from making a big financial mistake. I nearly bought another house. The same house type, opposite the one I was bidding on, is now on the market for £55,000 less.

    But I am not on here thinking that my posts on this website will have any real effect on the housing market.

    I come to this website primarily to read the wealth of information and opinion available on the world economies.

    Grand, just wanted to make sure all new readers/posters are aware personal situations as well as statistics might sway someone's opinion but that it might not necessarily be accurate. I'm not saying your wrong and I'm right, I'm just trying to make sure that people use this website as part of their research but not as their only research before acting/not acting! I'm looking forward to learning from the bears and hopefully they will find my fairly bullish attitude interesting!

  2. Just of interest where have got these average income figures from? I have been trawling the internet looking for them and still haven't located anything remotely useful from a reliable source and I like to have as much information to hand as possible as that way you can give a 'more educated' opinion. You STR and I'm guessing hoping to buy your next property in cash thus it would be in your interest for prices to fall rapidly, correct? My situation is/was well known and I think it would be useful for first time readers/posters to know exactly the vested interest of those poeple who speak frequently on this form? Anyone agree?

    Also I note you haven't responded to my wage inflation comments, is that maybe because you believe I may have a point there?

  3. Then this is a non argument. Why even mention people that have no effect on the housing market? :unsure:

    Tell you what... lets just stick to averages. Average income £21,000. Average house price now £230,000.

    But the average joint income is not 2 times the average single income. It is more likely to be between £30,000 and £35,000.

    Just of interest where have got these average income figures from? I have been trawling the internet looking for them and still haven't located anything remotely useful from a reliable source and I like to have as much information to hand as possible as that way you can give a 'more educated' opinion. You STR and I'm guessing hoping to buy your next property in cash thus it would be in your interest for prices to fall rapidly, correct? My situation is/was well known and I think it would be useful for first time readers/posters to know exactly the vested interest of those poeple who speak frequently on this form? Anyone agree?

  4. I voted will struggle through. I think the climate for moving forward will help. I think Wales/Scotland/Northern England will have a tougher time, imo.

    I'm all for optimism, but blind hope isn't great for making sound business decisions.

    Yet if we are all pessimistic then we will force the worst to happen! Somewhere in the middle ground is probably the safist place to be!

  5. I admire your optimism! I would respond with two words: bull trap.

    Possibly but depends on where you are and what the drops have been there! Not all areas/houses rise at the same rate/magnitude nor will they fall at the same rate/magnitude. Looking at past data can be useful at predicting future trends but it does not mean that it will happen exactly like that, no-one knows what the future will bring-we are all just best guessing based on the knowledge we have (or think we have), hope from our own perspectives/situation and from previous experiences! Some will be harder hit than others and some will weather the storm and some will profit from others misfortune.

  6. Have a really, really good look at the graph in my signature below.

    That graph is from the Nationwide and Office of National Statistics.

    Notice the salary multiples axis on the right. You can clearly see the housing bubbles in the 70's, 80's, 90's?

    Northern Ireland house prices are so far off that chart scale it is really, really scary!

    Oh come on. Now you are being silly :rolleyes: So your argument is that only rich people need housing :blink: Only above average people should be able to afford average housing? :wacko:

    I would say below average income people should be able to afford below average price houses. Average people should be able to afford average houses. And above average people should be able to afford above average houses.

    My cousin is a fireman and his fiance is a dentist. They were recently told that the only way they would be able to buy a terraced house in Belfast was to lie on their mortgage application. So 2 people with well above average incomes can't even afford a below average house here.

    My cousin has decided to take my advice and wait until 2010 before looking for a house. IMHO houses will be alot more affordable by then.

    No what I'm saying is that those on very low pay have never been able to buy (they use social housing or rent) and this will continue and those on below average salaries will only be able to afford below average properties. People normally start off in a house that is good but not ideal and then upgrade wehn they need and can afford to do so. Therefore the average couple on the average salary usually begin with a 'starter' home then move in time to the average house or above average house. As with regard prices in some areas and for particular houses need to experience further significant drops but some areas and particular houses have already had these drops and houses are shifting again.

  7. I bet the estate agents didn't complain when the prices were being ramped in the news papers! :rolleyes: Pretty funny really though, the estate agents must be bricking it! haha!

    The estate agents are struggling but not because prices have fallen back but because the number of transactions have fallen so sharply. A £20k drop in sale value only equates to a £200 drop in revenue but failure to sell at all could equate to a £2500 drop in revenue! Thus it is sales numbers not sales values that they will either live or die by!

  8. Yes the banks are still trying to suck more people in... and their deposit will disappear quickly when the housing bubble bursts.

    Don't belive me? Just read the last 2 University of Ulster/Bank of Ireland reports. They show house prices are falling by £6,500 a month. Any deposit given too a bank will disappear very quickly as the value of the property falls.

    Yes I seen that report also, however there is another report produced specifically for investors where although prices dropped that much last quarter, they had dropped more but recovered slightly in the final 6 weeks of that quarter. I don't see that small increase (~1%) continuing by any means but I do think that house prices will have stabilized by the summer this year and further falls will be in 'real' terms only due to inflation and the odd desperate seller/repossession!

  9. Go for it? I'd still rather bide my time and wait for the prices to drop some more. If I plan to live somewhere for more than a couple of years, then what's the rush?

    That's grand and your are perfectly entitled to do so but the fact you are waiting for prices to drop more means that you don't feel you'd be getting a good price at present and as my post earlier stated, you should only buy the right house, at a good price that is affordable to you!

  10. Have you ever heard of creative accountacy, I have.

    As they say there are lies, damn lies and then statistics! You can manipulate figures to pretty much back-up any viewpoint!

    What I don't get is the constant referral to 3x single income, 2.5x joint income. With a good deposit 5x joint income is still easily accessible, I know as I've been looking and talking to my bank. Banks still want to lend those 'less risky' people money (i.e. those who have been prudent enough to save a sizeable deposit) as that is how they generate their huge profits! Simply cutting off credit supply entirely will de-value their assets and thus isn't in their best interest. But as always do your own research, crunch your own figures, factor the likely changes to your circumstances and come to a balanced decision!

  11. "The data on the MIG is inaccurate!" I love Top Gun B)

    This is more a little more accurate...

    The historical 3.25x multiple applies only to single people.

    Historically banks only lend 2.5x joint income. There are several reasons for this - increased risk of reduced income due to sickness or redundancy, and increased risk of additional expenditure i.e. children.

    Besides that: surveys show that the average joint income is not 2 times the average single income. I can't remember exactly, but I read somewhere that the average single income in Engalnd is £24,000 and the average joint income is around £35,000.

    So what you are talking about is a couple who's joint income is well above average joint income.

    I wonder what the average joint income for Northern Ireland is? Probably not much more than £30,000.

    Yes, I know lots of couples have large joint incomes. But we are talking about averages.

    Lets use £30,000 as an example:-

    £30,000 x 2.5 = £75,000

    and

    £21,000 x 3.25 = £68,250

    Holy crap :ph34r:

    Edit: for increased accuracy ;)

    Firstly at least when can agree on what is an excellent film!

    Yes those figures you use are scary-I concede that but I don't agree with them! Basing the average house price purely on the average wage will never work as those on low incomes have never been in the property market and I don't see that changing any time soon. Thus the average house price will always be higher than the average wage mortgage multiplier of which your multipliers are very low in my opinion. Therefore higher joint incomes are more relevant than very low joint incomes! With a good deposit, 5X joint salaries multipliers are easily availabe-I have been speaking to my bank and financial advisor. Thus if you can get the right house a good price and are planning on staying there for more than a couple of years you should go for it! With average wage inflation holding at approx. 3.5%, as time goes on your finances will become increasingly more comfortable provided you take out a long fixed rate mortgage. I say fixed rate as I expect inflation to continue to rise (unless the GBP gains significantly against the USD & Euro) and thus interest rates will be raised to combat this in the medium term. Having a fixed rate will stop your mortgage costs rising and the higher interest rates should combat inflation to a degree hopefully leaving extra cash in your wallet!

  12. I second this.

    Dellboy, you have made a decent point and I concede that, long term, the property should come back to its present value. But is that a good investment? With the banks tightening up and restricting lending (no more 100% mortgages, salary multiples going down etc etc) - eventually the max salary people will be able to borrow will go low and stay low. This is not the same as the 90s recession - in my view it will be much worse. Imagine 4x MAX salary multiple on mortgages for the next 15 years at least. How long will it take for the average NI salary to reach 50K? How would ULTRAS_76 feel if his house is still worth 200K in 2020?

    ULTRAS_76, work out for yourself what yield you can achieve with rent versus what the capital sum will earn you in the bank over the next X number of years if you sell, and compare the two. How soon do you need the money? Play around with calculations, get some independent advice and good luck.

    You say that wages would need to inflate to £50k a year here for prices to regain their 'peak' value, and this will not happen in 20 years, which I don't agree with as the average couple currently earning two average wages of £21k or whatever it is, giving a joint income of £42k, even with a fairly low mortgage multiplier of 3.5X, giving them access to borrow approx. £150k + their deposit NOW. A higher multiple of 5X is still available if you have decent deposit, meaning that the average couple could afford £210k+.

    As with regards wage inflation, I can't find an average annual wage chart, maybe someone could? However in 1970 for a full-time position in a UK solicitor's office you could expect to pick up £126 gross per month which would equate to £1512 a year.

    http://www.bbc.co.uk/dna/h2g2/A319619

    If we take that as an indication of the average wage, it has increased over 13 fold in 38 years, so might it not be possible for the average wage to double in 20 years???

    Just trying to give both sides of the argument. Short term, selling would be the best option, long term renting it out is the best option. Remember what site you are using-some here would like to see prices return to their 1976 level and then still expect a free car! (I borrowed that line from a friend-so if you are lurking thanks). I'm not trying to antagonise anyone on here but to have a proper debate you need both sides involved (where have you gone MD?) and a little humour always helps!

  13. Was at Victoria square this morning and had a look round. Looks nice but not that much different from any other shopping center! Cold though as it not completely enclosed!

    A friend sent me a website address which I was looking at. From looking at it I find its amazing the amount of luxury' apartments that are being applied for/under construction in the Belfast area! But I did notice this, changing the top floor apartment into offices, those penthouses mustn't be selling too well!

    Maybe the developers feel that more businesses will be set-up/re-locate to Belfast in the coming years and by providing offices they will get the best return on their investment as there is already so much residential supply in Belfast currently!

  14. I voted for NI has a healthy outlook.

    I feel that despite the current economic worries, and when the whole credit crunch passes (however long that may be), with the European funding we are getting access to, the support of both the UK & Irish government this country will move forward and prosper.

    And hey what's wrong with having an optimistic outlook on life-you'll fell much better for it! The last thing this country needs is for people to look backwards!

  15. We keep talking about average income and average house price. Yes, that's relevant, but surely the average income never buys the average house, since many low earners are never in the market, and never have been

    That makes sense to me-the average 3-bed semi will always be that bit more in relation to the average wage multiple. I seen elsewhere on the Northern Ireland section that wages would need to inflate to £50k a year here for prices to regain their 'peak' value, and this will not happen in 20 years, which I don't agree with as the average 3-bed semi will be purchased by the average couple. Presently they are earning two average wages of £21k or whatever it is, giving a joint income of £42k, even with a fairly average mortgage multiplier of 3.5 times, giving them access to borrow approx. £150k NOW. On top of that add on whatever deposit they may have.

    As with regards wage inflation, I can't find an average annual wage chart, maybe someone could? However in 1970 for a full-time position in a UK solicitor's office you could expect to pick up £126 gross per month which would equate to £1512 a year.

    http://www.bbc.co.uk/dna/h2g2/A319619

    If we take that as an indication of the average wage, it has increased over 13 fold in 38 years, so might it not be possible for the average wage to double in 20 years???

  16. Where I live some houses are being advertised at circa 20% below peak value but a few are actually selling up to 33% below peak (to investors surprisingly) which brings them a lot closer to their rateable value. I think that is where prices will stop dropping in nominal terms as those desperate to sell will have sold and at those price points someone with a 15% deposit would see the rent covering an I/O mortgage. Other areas might not have have come this far this quick however-local EA's are being quite frank here!

  17. Houses are not like other assets, where hearts come into play as well, meaning that rational thinking is sometimes left at the front door! Prices have dropped fast and there 'seems' to be a little more selling (more sale agreed signs up near me)-I wonder if this is becuse they look like bargains when compared to the peak in April 2007??? Wonder if the spring will hold prices where they are, ie. roughly 20% below the peak, or wether more price changes are set to come! Intersting times ahead for Northern Ireland in all sectors of our economy...

  18. It will be an interesting spring. The majority of sellers have either dropped or will drop their asking price by 10%+. I wonder if there are further falls, will they be in actual asking prices or in 'real terms' due to inflation? Further actual house price falls may lead to more properties being withdrawn, which could eventually lead to only a 'normal' amount of housing stock being available. The last house price crash in England saw actual prices go down by something like 15% on average followed by a sustained period of stagnation (i.e. a fall in 'real terms' only due to inflation). Then HPI started to rise once more. I wonder how 'our wee country' will fair...

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