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House Price Crash Forum


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Everything posted by nhyujm6

  1. yes, but what is happiness to you Zaranna?? Those THINGS that we surrond ourselves wont make you any happier. They will start owning you. Keep life simple, and enjoy the little things.
  2. Yes, and the conditions here are: People work Earn a salary Buy a house Get a mortgage Pay the mortgage Thats as simple as it gets. All im doing here is comparing property price to income. You can talk BS about how cheaper it is to live in NZ, carry trade mumbo jumbo, but the bottom line is this; THE COST TO SERVICE A MORTGAGE IN NZ IS MUCH HIGHER THAN THE UK BECAUSE IR'S ARE HIGHER AND THE PRICE/EARNINGS MULTIPLE IS HIGHER THAN THE UK, BUT PRICES ARNT CRASHING. Make you think back to that Daily Mail article of a few days back that said IR's need to hit 8% to cause prices to go into reverse??????
  3. "US rates went up to 5.5% and they have the mother of all crashes on their hands already." Mother of all crashes. You cant be serious can you?
  4. As expected, no one gave me a well thought out answer. NZ interest rates are at 7.5% http://www.rbnz.govt.nz/news/2007/2960402.html Average salary in NZ is nz$ 610 per week, or in GBP terms, only Stg 10420 per year http://www.stats.govt.nz/products-and-serv...n06qtr-hotp.htm Median House prices in NZ stands at NZ $327000, or Stg 116540 http://news.emigratenz.org/category/real-estate/ So the price/income ratio (measure of affordability) for NZ is 11.18 The price/income ratio for UK is 8.62 (average income = 21456, average house price = 184924; maybe slightly higher now) So house prices relative to income in NZ are more over extended compared to UK, but the fact remains, IR's are at 7.5%, nZ has a higher HP/income multuple and there is no crash. Thats telling
  5. Everyone is debunking it, because they dont know what they are talking about. In some European coiuntries, for example Cyprus, you can take out a loan of your choice in any major currency you choose. If you had taken out a mortgage in Japanese Yen, you would have payed the market rate + Libor. So until very recently you would have only been paying 2.3% interest. Further, if you had taken your loan in 2003 when the yen/GBP cross was at 184 yen to the pound you would have donw very well, since now its at 220 to the pound. Which means you would have been paying net a negative interest rate, since the gain on FX is greater than the 2.3% interest. Even now at 0.5% base rate, we are only talking 2.8%. Taking FX out of the equation all together, 2.3% interest is better than anything other currency choice. So my advice to you; make Hay while the sun shines. try putting some money into some commodity ETF's that buy/sell wheat, corn, gold, oil and other commodities. Look at the bigger picture e.g. what is happening in bioethanol in North America pressurising wheat/other commodites. Asian currencies look undervalued vs the dollar. Good luck
  6. nobody wants a used apartment. Its not clean.
  7. Why do bears think a housing market crash will happen if IR's go up, when in New Zealand Interest Rates are now at 7.5%, but there is no crash there yet? Answers like "Its just around the corner" or "its got something to do with the carry trade" dont count.
  8. Its not fair. Houses are too expensive Its Tony Blairs fault No wait, its Gordons fault Its old people, no wait its sheeple Prices havnt crashed because of immigration and fudged data on inflation No, its the carry trade, whatever that is Its my wifes fault, shes getting broody The Chavs have something to do with it Why should they get houses when we cant one? Its the medias fault. The torygraph. The express. Its them. The FTSE is down 2 points. Thats gotta mean something A cousin of a friends estate agent just went to Burkina Faso and said his grandfather said prices were crashing there Interest only mortgages are crazy but premium bonds are great arnt they Its a conspiracy The government wants to control us with huge mortgages Well, not me. Thats why im Im selling to rent No wait, Im renting to buy But its cant be long now. Interest rates are 7.5% in New Zealand now. But house prices havnt crashed there yet. I went down to a shop the other day and a milk was cheaper But bread cost more. Thats gotta mean something. The crash is just around the corner.
  9. So thats exactly how many public sector employees who wont be voting labour next election?
  10. "I just want a home" -Thats what i dont understand. There are lots of STR's here and people waiting on the sidelines to buy a home; they want house prices to go down, but they are like those who own a house: they beleive home ownership is where its at. These are the people who post good arguments why renting is a better option. Cheap etc. Heres a secret; OWNING A HOME PROBABLY WONT MAKE YOU HAPPIER It might make you feel more secure, smug, greedy, but if you think REAL happiness comes in the form of bricks, wood, tiles, laminate, kitchens etc then its probably too late for you. Heres another secret; OWNING A HOME PROBABLY WONT MAKE YOU RICH Oh, yea, you maybe satisfied with yourself once youve paid off your mortgage after 20 years of hard work. But after all the repainting, retiling, new kitchens, new TVs, new gardens, new paintings etc + interest on mortgage - inflation you may barely have your head above water. Oh yea, but what about all that equity in your house? sheesh..what if you had spent as much time as you do reading these messages learn the stock market, put the equivalent sum into stocks, earning on average 20% a year, compounded for 20 years?!!! The difference is huge. -- In other countries, likethe Netherlands, 50% of people own a property, and the other 50% dont. Yet, I spend a lot of my time there for work, and you can see, on the whole they are a happy bunch. Why is the UK obsessed with property? Im telling you, if you spend too much time obsessing about the housing market (if you want it do go up or down), its unhealthy. Wake up.
  11. Very Very Simple Question; If the ratio of 1st time buyers in the market is at or near an all time low, then who is buying all the houses the 1st time buyers should be buying (but are not)? And how? Cheers
  12. yep thats great homework you are doing. can you tell me how much google shares will be worth in September 2010, and who will win the grand national? seriously, posts like this are a waste of time!!!!!!!!!!!!!!!!
  13. "It gets them "on the ladder" and, 3 -5 years ago was the easiest and cheapest way of servicing mortgage debt until your security increased in value. If you're just starting out, what's the point of paying back capital and interest to your lender when it's going to take between 6 and 8 years before you actually start eating into the capital ? Why spend that time making higher repayments and then, when you sell your first house after 7 years or whatever to move up, take out ANOTHER 25 year mortgage. Sounds to me as though the 30 year IO mortgage that everyone is slating so much isn't that much worse than taking out a succession of repayment mortgages which'll see you making mortgage payments for 40 years anyway assuming you'll move three or four times." -Is this really the way some people want to live their life and run their finances? Is this happiness for them?
  14. I dont agree. Money is being made in ALL kinds of markets ALL the time. Its joe average on the street who enters a market at or near its peak (once they have heard all the publicity about it), but dont really know that much about what they are investing in, that typically loose out. If you are young and you want to make a REAL difference financially, the stock market is where you should be. Spend a a year first honing your skills. Have a plan and stick to it. Make hay while the sun shines. Good Luck
  15. Ok, so what im going to say is controversial, but who cares. I read this site a lot, and notice there are a lot of apparently die hard bears out there with their money parked in ISA's or premium bonds, or some iceland bank savings account waiting for the crash to happen. The reasoning must be, once the crash has happened, Bears will come in and buy properties at rock bottom prices from "sheeple" who bought during the bubble (because thats what we are in right now, a bubble). Thats the strategy. The only problem is 1. Nothing is certain. 2. A crash may happen, but it could be a long drawn out afair, with prices dropping over the next 10-15 years. 3. The Bears are missing the boat on other wealth building opportunities; like the title, they are caught in the headlights waiting for something to happen that most likely wont happen the way they expect it. In the meantime they could have (random examples from colleagues experiences) - Bought an unknown telecom stock after the Worldcom debacle when all telecom stocks were "radioactive". 3 years on, and the stock is up 800%. - Bought a property in a part of Europe where the bank allows mortgages in foregn currency. Chose a Japanese mortgage at 2.3% (bank took 2.3% as its cut, Jp IR was zero) and then Yen devalued 30% over the following 3 years. Became a very cheap mortgage. Many more examples out there of people doing well out of putting their money to work. You cant poke fun at that. My advice is become more proactive and stop waiting for a crash while your money is being deflated in the bank!
  16. oh yea, and hording your cash in an ISA waiting for the crash to happen isnt a great investment strategy.
  17. if you dont like the idea of your money being eroded by M4 money supply growth of 14% pa, then invest in shares. Over the long term they will always give you better returns. With a little bit of self education, it could be life changing.
  18. A colleague of mine told me about this last week; There was a manufacturing company in eastern Scotland, where productivity was low for sometime. The management of the parent company, based in America, visited the site to see what they could do to boost productivity. After having lunch with the employees they were struck by how old and decrepid the staff canteen looked. Hoping modernising the canteen would raise the morale of the employees and boost productivity, they totally revamped the area, with modern furniture, plates, coffe machines, cutlery etc. A couple of weeks after the canteen revamp, management were informed by unions that the staff were going on strike because their new cups and plates in the canteen were smaller than the old ones. Staff and unions agreed it was a cunning ploy on behalf of mnanagement to cut costs. A year later, the plant was shut down, and production moved to China.
  19. Rising pay deals? According to labor market researchers, Income Data Services (IDS), there are signs that pay deals are moving higher, responding to higher prevailing inflation. IDS pointed to higher deals (of over 4%) in the car and utility industries in the three months to November, although the median deal remained at the 3% mark it has been for some months. The deals covered would have been few in number with the bulkof major pay negotiations due in the new year, something that the BoE has been very vocal about. Higher shop price inflation. According to the BRC, shop price inflation accelerated to 1.81% Y/Y in November, from 1.52% in the previous month. TheNovember rise is the largest in 2½ years. The data have a poor correlation to official CPI data.
  20. As we travel around a virtuous, profitable, and satisfying circle of consumption, consider this; When interest rates rise by one full percentage point, it saps about 10 percent of buying power. BUT houses prices are still going up. SO where is all that new "purchasing power" coming from? After 5 years of soaring property prices, people can still afford to buy more expensive houses. Gotta love the era of cheap money
  21. "I am an intelligent, educated woman, and yet I have let myself fall into a sea of debt. Together my partner and I have a joint income of around £60,000, and yet we can't manage." -Dont kid yourself honey, you cant be that intelligent if you feature in an article about debt horror stories. "The trouble is that we live in a culture which encourages debt. Everyone throws money at you - the bank, credit cards, store cards. " - Thats right, shift the blame to someone else. "Being in debt is a very expensive business, and it's awful to think that I am likely to owe money for the rest of my life". - yes, thats right, debt is the slavery of the free. This article is entertaining; "But we decided to buy a flat together - goodness knows how we got the mortgage, but we managed to persuade the building society to give us a 125% mortgage against the value of the property. We borrowed £97,000 in total, over and above my existing credit card debts, because we said we needed to spend so much money on renovations. I used some off the money to keep my creditors at bay, but there was no way we could pay the mortgage, do the repairs on the flat and pay off our debts. Things came to a head earlier this year when I sat down and worked out exactly how much we owed. I just put my head in my hands and cried. We had to do something - everyone was baying for cash. I went to see a debt agency, Thomas Charles, and they have arranged for me to pay off my creditors using what are called IVAs - Individual Voluntary Arrangements. I couldn't pay anything near the debt I owe, but I am paying £650 a month, which they have accepted. It is an awful situation. We had to sell the flat after just two years - which had negative equity, thanks to the huge mortgage - and we're now renting a tiny one-bedroom flat. "
  22. homebuyer at work: "you should buy the most expensive house you can get your hands on, because a 10% gain on a 300K house is more than on a 200K house".
  23. Folks, its an interesting time. This week we have seen a few peices in the media admiting that HPI is fueled by speculation; belief that theres no time to loose because prices always go up and if you wait any longer you will miss out. This of course is the definition of the bubble. Weve also had some commentators say that a correction must come, but exactly when in the future is hard to pin-point. Heres what happens next; 1.The bubble will burst from the bottom of the market, as ultra-low interest rates, combined with creative financing by banks and building societies, enabled people who otherwise wouldn't have qualified for mortgages to purchase homes. The BOE has decided to raise rates from near historic levels, and lots of low-end buyers will find their monthly payments ratcheting higher, thus forcing many to sell. At the same time, with higher IR's, others soon find that they can't afford the house of their dreams and back away altogether. 2. As a consequence, demand drops while supplies rise, leading to a rare, but palpable, decline in selling prices. Because sentiment isnt totally negative, people buy on dips. People buy on dips. 3. Eventually lower prices stick and the balance of power began to shift from sellers to buyers. Buyers, though, could care less about the outlook for interest rates: They smell blood. 4.Prospective homebuyers will become increasingly reluctant to make an offer, figuring that if they wait a week or two, prices will go lower. All those unsold homes out there will be proof of the pudding -- they're making sellers anxious while buyers simply bide their time. 5. Against this backdrop, the supply of unsold homes will show no signs of being worked down. 6. Even if rates stay the same (they will go higher, see below), the damage has been done. Once psychology turns, it takes a long time to reverse. 7. Its a buyer's market -- and the sooner they recognize it, the better off sellers will be. 8. Speculative money will exit the residential market, but easy money is everywhere, and will end up in other markets: In particlular, speculation in commodities, driven by real demand from China will give rise rise to long-term inflationary effects. 9. The US economy will slow because of the housing market, and the UK will follow. The dollar is on the ropes ... it's in really, really big trouble. A breakdown of the dollar should drive up the price of everything from gold to funds holding foreign bonds. The world economies will slow, but yet credit is TOO CHEAP. Central banks are beginning to realise this. In the UK IR's are 2-3% less than what they should be Easy money is everywhere. What's going on? Leveraged buyout firms have spent $600 billion in takeovers so far this year. That's two and a half times the $241 billion in deals last year. The problem is that firms are buying because they have money burning holes in their pockets, not because the fundamentals of the economy are dramatically improving. There's a huge amount of liquidity because of debt financing. Money needs someplace to go. First there was easy money in tech stocks, and that bubble burst. Then there was (and still is) easy money in residential property Now, it's commercial properties. Will we ever get a break from this constant stream of easy money-fueled bubbles? The bond market thinks there's almost a 40% chance of a recession in the US next year. Despite all these developments, speculative investors don't seem afraid of anything. The "sun" of excess liquidity is shining on practically every asset out there - stocks, bonds, commercial real estate, you name it. But this won't last forever. It never does. There will come a time, possibly very soon, when risk explodes back onto the front pages. And when that happens, thosed who have huge mortgages will hurt for a long time. The "soft landing" cr_p the real estate industry keeps talking about wont happen. Supply and demand arguments are irrelevant when greed turns to fear. Good luck all.
  24. "Last week I found my daughter weeping in the kitchen. This isn’t that unusual — she is 15 — but the cause of her distress wasn’t boys or exams or pimples but, “Mummy I don’t think I will ever get on the property ladder.” good thing I had chunky carrot soup for dinner, otherwise the vomit would have been more difficult to clean from the keyboard
  25. "The government's failure to effectively address the housing crisis at a time of economic stability and prosperity can only be described as a crime against society. If an adequately housed population is an indicator of a healthy economy, then this government's stewardship leaves a great deal to be desired." The crime is in the hands of joe middle class. They re-voted these clowns back in because they were quite happy thanks very much for their houses going up in price. They feel richer. yay for them. The government knows it, and UK citizen happily feeds on the governments property pill. Couples are too busy now to see each other or their kids, because they paid a ridiculous price for their property and their mortgage is so enormous they both have to work just to make ends meet. Tony Blair says low interest rates are a good thing. Everyone beleives him. This, ladies and gentlemen, is social engineering at its best. The slavery of the free.
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