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the don

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Everything posted by the don

  1. read somewhere that 2006 is expected to have c 920,000 house sales( not sure if this includes new builds). on that basis there is probably 1 years wortn of stock of " used " homes . if Rightmove at 570,000 represents half the market. the US market was reported this week as having 5 months stock of "used" homes for sale.
  2. can someone help me here, but I have a recollection that the very low numbers of mortgages approved at the end of 2004 was because of changes in the regulatory environment. it was not definitely stated , but i recall a number of posts that indicated that lenders had ben slow processing mortgage applications because they had to comply with new IFA rules. The backlog was sorted early in 2005 . anyone able to clear this up? the don
  3. its a matter of opinion what hapens next my view is that the amount of debt taken on board by individuals and the state will need to correct. this will mean that in the period ahead expenditure will be below average. the end result will be low/zero/negative growth and either a downturn or rcession. this is what Brown refers to as boom and bust which he claims to have eliminated. well i think we've had a big boom and a big bust is in progress. others may have different views.
  4. good post like the comment about patience although some on here have been patient for some years alreadty!! i have been impressed by the speed of the correction in oz and the recent movements in usa markets it seems slower here, but it may just be the stronger spin reporting of the vis who want to keep prices up. you make good points not to mass attack posters with non bear views. i think in general these people do get a good opportnity ( eg time to raise the rents) my problem is that few of them put forward reasoned arguments backed up with relevant data to support their views. many bears on this forum try and present arguments backed up by facts generally not distorted to prove a point do you have any indices which track prices in say Sidney, Brisbane?
  5. the numbers quoted are solely loans aproved for house purchases and exclude re-mortgages etc they are a good forward indicator of potential transactions. as mentioned elswhere the now aborted SIPPS would have increased the volumes somewhat.
  6. the number of loans approved in nov 2005 was 10% less than nov 2003 also the number of loans approved in 11 months this year is 16% down on 2004( 11months) and 30% down on 2003 (11months) activity picked up but probably a suckers rally
  7. there is a clear pattern emerging new car sales down retail sales down in margin terms- retailers heavily discounting to try and mantain volumes new house sales down 20% for an ecomomy that supposedly is on a soft landing course these do not add up. the reality is that high debt is a problem even with very low interest rates unemployment rising steadily.(lots of unemployed hidden on incapacity benefit) taxes increasing steadily to pay for nu (old?)labour's public sector waste programme energy bills rocketing as the problems mount there will be a downward spiral construction sector is already shedding jobs( builders and buildng materials suppliers) retailers will start squeezing costs( suppliers and staff headcount) as companies feel the slowdown they will restrict discretionary spending etc etc
  8. i have a similar view to soem earlier posts on this thread this site has provided me with peer support in not re-entering the housing market. i am pretty idependent minded, so would probably have taken the same path, but it does help when you start doubting your judgement to have other people espousing similar vews. in addition the many excellent contributors( mainly bears but also some of the bulls) have opened my eyes to thinking more clearly about what is going on in the economy and politics.( here and the usa) also helped me to realsie what is really important in life.( definitely not money or possessions) the don
  9. well done very clearly and well presented points as ever-not a lot of time to get all the messages across the don
  10. im with mark g the basic problem is that prices are out of kilter with earnings. overall debt levels are very high( mortgage, credit card, overdrafts, student loans) any further increase in interest rates ( which i expect) will make it worse. cant see wages jumping at 15%-20% p.a to resolve affordability issues. only 2 possibilities: a) drop of 25% from todays prices over 3 years or so prices stagnate for about 10-12 years. cant see that is realistic. aso, with the drop in tranactions because of affordability, the construction sector( apart from goverment work) will go into recession.(its probaby already ther now) this will knock on and cause further loss of confidence. the governement hasnt got the cash to afford more public sector job creation to take up these people. energy prices just exacerbate the conditions for the crash/ correction. with regards to bull conditions: to raise prices further will require more conning of the public and/or genuine shortages of properties. the conning of the public has been going on for ages but ths has not prevented the recent down turn in prices. dont believe there is any shortage of properties overall i therefore have to conclude that market reality is setting in and will continue until past a point of equilibrium.
  11. ive beeen loking at property sales data on www. nethouseprices.com where i live in chester, on my road, which is a major suburban road, a house has just come on the market. it is a 4 bedroomed 1970s box with 2 garages for £350k asking. i checked the last sale registered on this house was mid 2001 at £170k. the type of hosue is one where any upgrades would only be internal (decor, kitchens etc) as the external appearance is the same as adjacent houses. where is the logic that says the house was "worth" £170k 5 years ago. and is now " worth" £350k today? after at most 15% general inflation todays price should be c £210k plus perhaps a little if they have fitted a new kitchen etc. of interest also is that on this road in 2001 and 2002 there were 12-15 property sales recorded each year. in 2005 so far there has been 1, despite probaly 25 houses being on the market throughout the year ( i think there are 10 on the market at present) these ludicrous prices have effectively killed off the market and the income stream of the EA's, surveyors etc. i think the crash will be more severe in the north where the % increase appears to be worse than the south (i moved up from sussex in 2002). earnings are a long way below south east wages and cannot be enough for FTBers in most cases to buy the bottom end properties that free up movements further up the chain.
  12. prety good summary of where we're at the danger for confirmed bears such as me is that this type of report is what i want to see. i would be interested to see a well prepared alterntiave view from the bulls. i dont mean a seies of platitudes such as: "its different this time" " house prices always go up" rather, someone who can show where the genuine growth will come from, how incomes will rise to be abe to repay the morgatge and othe debt etc. any takers? the don
  13. i think that you have got it more or less right, except that i think it will take anther 3 years to see 30% price reductions. i will be intrested to see if the vis supporting high prices change tack when they see that the momentum is against them. aso, will be intereted to see who the government blames for the fallout. i am sure they wont take any responsibility. probably come up with some smoke screen acctions to make it look as though they are trying to help
  14. my view is that prices will drop over 3 years by about 35% from the levels seen in 2003 ( southeast) and (2004 midlands and north.)
  15. still absolutely convinced of a hpc i dont buy the rubbish that " the fundamentals" are sound. if the fundamentals are so sound, please explain the following: hpi has gone from 20% to zero in 12 months. why is this? debt has gone from £600 bilion to £1300 bilion in 4 years. new house build has droppped by 20% in the last 12 months ftbers now account for 8% of purchases against a long term average of 30%. without ftbers the chains cannot be completed. investors account for 50% of new house sales according to a national developer. as the investors realise this is a bad place to put their money they will withdraw causing more pain for developers. as investors of load bad investments then they will help drive prices down further when i was young we used to play pass the parcel. when the music stopped playing if you had the parcel you were out. well, the orchestra stopped playing a while ago but some people havent noticed yet. the vis will try and talk the game up . on what do they base their predictions for any price increases next year?. they presumbaly think there are still enough suckers out there to con into taking life damaging levels of debt.
  16. 1 uk house prices drop 10%-15% in year 2 irs drop to 4% by year end 3 unemployment continues to rise 4 blair still pm 5 oil prices stabilise by mid year at $40-$50 per barrel 6 chealsea win the treble ( not my team by the way, but they look unbeatable) 7 tories consistently lead labour in the polls 8 john prescott finally passes the 11 plus, only to find out that there are no more grammar schools left.
  17. my contacts in the american brick industry are all absolutely pulled out. this is the busiest they have been for decades
  18. construction is mixed. goverenment work(pfi etc) is going along just fine. new housing is down about 20% on recent years. extensions etc still seem to be holding up. i think it is becase people still believe they are investing their cash wisely in assets that are at worst not dropping in value. this is exactly the same as the last crash( 1989-1992) all of my contacts in building materials supplies expect 2006 to be as tough as 2005- plus they have all got huge hikes in energey prices to absorb
  19. defintley not me-or even in the previous 2 elections. however, they won very clear majorities and so democracy dictates that we should all accept their right to govern. their chickens are coming home to roost. i have been amazed at how they have held the discipline together so well and for so long. much as i despise blair he is a formidable politician. finally i reflect on the maxim-you can fool some of the people all of the time and all of the people some of the time. you cant fool all of the people all of the time
  20. some intersting data today form rightmove, odpm nad berkeley homes( see another thread) there is clearly a drop and if you look at odpm tables you can see that london, and southeast prices have been static since c july 2004( 18months) the north has been rising but is slowing fast. this is the same as in the last hpc, with the home counties leading the market by a couple of years. interesting comment from berkeley homes that in 2005 , 50% of their sales were to investors. what happens when the market is seen as a poor place to invest?? i dont think we will see a fast crash, just a steady pull back with increasing reductions from these absurd prices.
  21. blue collar well you can study at night school etc. my experience is that 95% of the people work on commonsense and thats all you need to know. the problem is that the last 5% have created the bubble. 2.5 % are the rip off merchants who have hyped property up ( this includes new labour etc) the other 2.5 % are the suckers. just go back to basics( common sense) and realise that you should only borrow what you can afford to pay( debt and interest) i would like to think that the people on this site rely on obviously high iqs. and financial training but the truth is they have seen through the spin and have thought through this great scam the don
  22. you could say the same about the welsh speakers who invade chester a couple of days a week speaking in their native language and buying cheap goods!! only joking- as i am welsh the don
  23. many manufacturers in the ceramics sector( clay bricks, tiles) used to be on 12 /24 month forward contracts. however, when they ran out many were not prepared to lock in to deals at what seemed at the time were rip off prices. they adopted a strategy to sit and wait by buying on a weekly. monthly basis. obviously they have caught a cold due to the speculative steep increases.
  24. not related exactly but..... i needed to organise some transport for roof tiles for the first time in ages in the last week. absolute shock! despite all the fuel increases the price quoted was 60% of the rate i last paid about 8 months ago!! obviously needing work also, i have recently shipped some machinery to the usa ( not my normal business) the shipper rang this week asking if there was any thing else to go. clearly short of work.
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