Waitingforthesun

Yes, I have become a real-estate-bubble Website addict

First, I think Bears should treat Bulls' points of views with more respect; if there were only Bears on HPC, this website would be useless because there would be no debate. Moreover, Bears should admit that Bulls have been proved to be right so far by the unexpected strengh of the UK housing market. Second, there is something you are maybe not realising: there is a very strong labour market in the UK. That's why so many "immigrants" are coming, because UK economy is creating jobs and there is a shortage of workers. In Poland, in France, there is high unemployment. Immigrants do not choose to go to UK - it's a nice country, but usually people prefer to stay in the contry where they were born, close to their family. So being in a country is a chance for all of you. In France, very few people would dare changing job or claim for a wage rise because it's so hard to find a job. In UK, I am astonish when I hear people saying "if I am feed up with my current job/my boss not raise my wage/give me more responsability, I"ll just change" I would prefer economy, money and jobs to be more equaly wispread across Europe, but it is not the case (maybe in the long term, trends will equalise). I was thinking there would be a HPC in 2005-2006. But when I look for a new job in France, I was approached by a recruiting company working for the City: in few weeks, it could arrange me many interviews for many banks with very good salary - something you would never see in Paris. I told me: with such a booming economy, how could there be a crash ? There has been a slow down due do rate hikes in 2004 and fear due to 1992 memories, but then the market went up again. I think UK need to build more housing. UK build only 200.000 housing units per year... it's ridiculous ! In France, we are building 400.000 and in Spain they build 800.000 Problem is that all UK economic system is based on HPI and there is an artificial shortage of building land. I heard 90% of land in UK belong to the Lords... don't you think it's time to do your revolution ? (but please be less rude than Frenchmen, do not cut the head of your Queen, she is a nice lady)

I think you should not blame the other the "mistake" you did Nobody knows the future for sure, so ultimately you have to take your decision and take your responsability If you buy and price crashes, don't blame Realtors If you don't buy and price goes up, don't blame Moneyweek columnists I don't think you need "courage" to buy a house, especially today, all you need to do is do what everybody else do, sign 2 pieces of paper (purchase contract, mortgage contract) and then it's done I think you need more courage NOT to buy today, when everybody tells you "buy now or you will miss the boat" Anyway, I don't know where you live, but statistics do not show 35% increase since 2004 The FED cut rate in 2001 and 2002, when the Dow was falling and the Nasdaq collapsing. The peak was in March 2000. The stock markets rebound in 2004, afer Ow losing 1/3 of its value and Nasdaq was divided by 5 (there were very good bargains at that time, but nobody - including me - was interested in buying stocks anymore) The new house sale up 4% in August comes from a correction of the previous July indicator, which finally ended worse than when it was published (stats are corrected very often in the US because they are published early, before all the date are checked). That was the markets are still pricing a real estate market slowdown I don't think commercial real estate will save the market if US are headed for a recession, or even a softlanding. People will do less shopping, companies will outsource more... But I agree the UK market rebound after August 2005 cut was unexpected and put some doubt on the HPC case - so I would understand if you choose to buy now. Personnaly, I prefer to wait and see, but it is my bet and I will face the consequences (I hope I am doing the right choice - time will tell)

Was it not exactly the same situation in UK in 2004 ? However, a single rate cut succeed to change opinion, and to make BTL and other speculators that it was time to buy again ! All these articles I am reading about US are cheering me of course, but I remember I read exactly the same stuff on HPC.com during 2005 (articles about new built glut, order cancellation, breaking chain, "why won't it sell", "worst house prixe fall over a decade" etc...) What do you think Benmarke is going to do when the official statistic, of Federal Housing Office (which is a moving average I guesse, since it recorded a 10% yoy increase when NAR say there has been a 1,7% drop aug 2006 vs aug 2005) is going to go into the red, as Halifax and Nationwide were heading in August 2005 ? He will cut ... and Chinese will support the dollar from falling (only Euro will go up, maybe preventing ECB from raising rates enough to create a European HPC) I have been a bear since many years, and I still think house prices can fall (so I disagree with bulls who thinks house price can only go up or flat), however UK (and Netherlands) has shown us that after a sharp increase, there is not a 100% probability that they will crash. Only if the US market start really to fall, setting mass panic selling, then it will be to late for FED & alike to rescue the real estate markets But it is too early - and all the financial and real estate speculators, bankers, traders, investors, economists, EA and Co... still believe in the FED (and BoJ...) put ("central banks are going to save us by flooding the markets with liquidity... which has to find a place to get invested somewhere)

I see that like most speculators you believe in the so-called "Greenspan put" (FED will lower rate at any problem and flood the markets with liquidity to keep bubbles inflating" and the US is simply "too big to fail". Of course Benmarke knows what he is doing, and he may cut rate very aggressively like Greenspan did in 2001-2002 But last time, US dollar was a strong currency, the US budget was in surplus, US T-bonds were hold by Japanese... Of course a recession in US would hurt China and the rest of Asia, but theu know the dollar will fall one day, the longer the worse And Chinese have their own political agenda, and will compete with US for oil USA has no industry anymore, if they try protectionism, China will just dump T-bonds, you are dreaming if you think a fall in US dollar will be a charming walk and local US economy will flourishing If FED cuts rates, it may bounce the market, but because of falling dollar and increasing inflation, the tightening will be harder in the future (remember what Volker has to do?) By the way, cutting rate to 1% did not prevent the stock market bubble to explode

This is exactly what I am afraid of The only chance would be that it leads to a dollar collapse In that case, our faith is in the hands of the Chinese... not very reassuring

I am also a real-estate-bubble-forum-addict Even worse, I am addicted to 2 web sites: HPC and a French website (www.lesechos.fr) I read HPC almost every (working) day, and I post on Les Echos almost every (working) day, The only times (for the last two years!) I could stop surfing were when I had really important things to do - the birth of my first child - when I searched for a new job A few years, I was really convinced there would be an HPC, and when the housing market started to go south in 2004 S2 and 2005 S1, I really though - " this is it ! " Now, I am very confused and I do nit know what to believe I could have bought a few years ago if I had accepted to take a big loan and to lower my living expectation (buy in a distant suburbs), but I refused... now it would be much more difficult, I am nearly outpricied by the market (even if my deposit invested in stocks and savings accounts is growing) HPC news are coming from the States, and are slowly appearing in continental Europe But instead of being happy, I am really afraid it could be the "Bull final proof": house price never go down When market is growing like hell, you can always pretend there is a bubble and there will be a crash But when it stagnates a few months... and then take off again, you are really pissed off I know I should think to something else, but now I have a familly, in 1 or 2 years my wife will want a 2nd child, and our rented-flat would be too small. She agreed to wait, but around us more and more friends are buying (even her younger sister!) My worst nightmare would be a "dutch-style plateau" situation I hope I'll get some hints in the next months that the bear scenario can be valid Otherwise, I know if house price do not decrease, I will finish crasy... a lunatic in a hospital

What do you mean by a nominal fall > 10 % over the next 3 years ? > 10% each year (ie nominal drop of 30%) or over the three years (ie drop of 3-4% each year) ?

WILL BE (according to the commercials) or ARE (in reality) ???

I also read that in Australia there are a lot of taxes advantages in you invest in BTL Income tax rate is high (near 40%) but you can deduct interest you pay your BTL mortgage, so negative CF can become a positive CF after tax shield is impacted Fortunately, I am sure Gordon Brown would never create new tax advantage for investing in BTL

OK, but why did not it happen in Sydney, where there are so many BTL with negative CF (I remember reading in an article that rental yield fell to a low 2,5% compared to interest rate at 6%... ouch!). Prices have been falling 5% yoy for the last 3 years ... but -15% from peak did not really destroyed the previous increases in price 100%+... It seems BTL did not panick flooding the market with their portfolio, but that they stubornly stick to their selling price and hold their properties, waiting for the market to turn up in a few years. So far, we did not see a crash like for stocks (real estate is far less liquid, transparent, and leverage sellers cannot afford to sell at loss - until the bank foreclose them and force them to do so)

What is true is that the market cycle has been much longer than the other ones before (as shown in studies published by OECD and IMF). Since last time the price boom was followed by a bust, many people think that the current boom will finish the same way: by a crash. But all the warnings were proved wrong because they were too early, and the crash argument has lost some of its credibility towards the public. Especially when the market turned-up again after August 2005. But you the story of the child who was always making jokes crying fo the coming wolf to frighten the people of his village. After a few times, nobody believed him. And when the wolf REALLY cames... Cucko, if you bought a home just to live in, which is affortable to you and that fits to your needs, you were probably right. But if you did it just because "you did not want to miss the boat" it just sounds like the same bullish story to me

Up, indeed, but if repo in 2006 at 18,000 approx same level as 2001, it's much higher than 2004 in percentage (more than double) but by amount, it is still low compared to historical average ...

Thanks, in fact I wanted an estimate of how much is deducted from a gross salary for taxes and social contribution to get a net salary - so it's approx 30 % less