Number79 Posted March 22, 2009 Share Posted March 22, 2009 it is hard for people to imagine 90% off peak prices. As has been pointed out for prices to fall that far would mean that the uk is in serious trouble. What is being missed is that if prices fell 90% then the cost of houses would be largely irrelevant to the vast majority of the hungry population. For prices to fall that far would mean a collapse of the uk, a crash in sterling, foreigners refusing to buy our bonds, war, the imf, etc etc. 90% off doesn't sound that plausible because people are thinking in terms of a house valued at £250k being worth £25k, but is everyone so sure that we couldn't go icelandic or worse still? Quote Link to comment Share on other sites More sharing options...
renterbob Posted March 22, 2009 Author Share Posted March 22, 2009 it is hard for people to imagine 90% off peak prices. As has been pointed out for prices to fall that far would mean that the uk is in serious trouble. What is being missed is that if prices fell 90% then the cost of houses would be largely irrelevant to the vast majority of the hungry population.For prices to fall that far would mean a collapse of the uk, a crash in sterling, foreigners refusing to buy our bonds, war, the imf, etc etc. 90% off doesn't sound that plausible because people are thinking in terms of a house valued at £250k being worth £25k, but is everyone so sure that we couldn't go icelandic or worse still? Agreed, but Japan is 80% off peak, so we're gonna break their record. BTW I don't agree with your need for war etc to attain a 90% crash. Japan hasn't been to war..... Quote Link to comment Share on other sites More sharing options...
jonb Posted March 22, 2009 Share Posted March 22, 2009 I will agree one thing that is 90%. It's the lunatics that post on here. Not all I hasten to add. Some are nice well informed people with clever views but they are in the 10% minority. If houses go down 90% that means the houses currently at £60,000 ooop north will be 6 grand. I might buy one for a laugh with next months wages. I'll be able to have a day up London, buy a Saville row suit, eat at Gordon Ramseys and shag a prozzy for under a ton. Bring it on. The houses up north that are currently going for £60000, generally 1 bed city centre flats, are already down from a peak of about £240,000 or so. So a 90% drop would imply that they are going to fall to £24,000. This is possible if they are occupied by people on call centre wages, and they are factoring high service charges into their valuations - not a totally ridiculous proposition. But I don't think that will be the average situation. An average fall of 90% implies that some will fall by more than 90% and other will fall by less than that. I don't think the Land Registry or Nationwide indices will fall to £18,604. I expect them to settle at around the £84,000, but they will overshoot that point on the way down. If it overshoots as much as last time, then it will go to around £60,000. It is very possible that it will be worse this time, but I would have thought £36,000 - an 80% drop, is a pretty reasonable support level. Quote Link to comment Share on other sites More sharing options...
daniel stallion Posted March 22, 2009 Share Posted March 22, 2009 Agreed, but Japan is 80% off peak, so we're gonna break their record. Really? Japan has seen nominal price drops of 80% on average? Not some areas of Tokyo but Japan? I wasn't aware of this. Could you provide your source? BTW - if nominal prices even get close to a 90% drop I know at least 50 people*, personally, that would start asset grabbing - and they would be using weapons, not money, to do it. So if you are planning on buying what was a million quid mansion for 100k be prepared to move out very soon after you have moved in. *these are relatively placid people too, so goodness knows what the less balanced folk might get up to. Quote Link to comment Share on other sites More sharing options...
johnny5thumbs Posted March 22, 2009 Share Posted March 22, 2009 .... Descent houses are still selling ... Freudian slip ? Quote Link to comment Share on other sites More sharing options...
Number79 Posted March 22, 2009 Share Posted March 22, 2009 Agreed, but Japan is 80% off peak, so we're gonna break their record.BTW I don't agree with your need for war etc to attain a 90% crash. Japan hasn't been to war..... war was only one possibility in the mix, imho also not that inprobable within the next decade. Quote Link to comment Share on other sites More sharing options...
Saberu Posted March 22, 2009 Share Posted March 22, 2009 A nominal 90% would signify an end of the world scenario. I think a more likely fall is 80% in real terms between currency and price falls. Sterling has already fallen 30% and house prices have fallen around 10% on average and the HPC has barely begun. I believe currency falls take a while to move into importation prices but definitely expect a lot of shelf inflation over the next 12 months which will affect sentiment greatly and may tip it into the proper crash territory where people would never touch property again etc. Quote Link to comment Share on other sites More sharing options...
Venger Posted March 22, 2009 Share Posted March 22, 2009 BTW - if nominal prices even get close to a 90% drop I know at least 50 people*, personally, that would start asset grabbing - and they would be using weapons, not money, to do it. So if you are planning on buying what was a million quid mansion for 100k be prepared to move out very soon after you have moved in.*these are relatively placid people too, so goodness knows what the less balanced folk might get up to. Could happen, but I'd hope we are programmed to know the breakdown of law and order and total collapse of society might leave us open to even darker external threats. Not just terror threats but full-scale invasion by a power with very unfriendly intent. In the good times we can afford a very measured punishment response to crime. Perhaps that would change. In other societies they have many ways to keep order within society. Like you get your chopped off for theft, or maybe here a return to taking your head and putting it on a spike as a warning to others. More police and maybe the army, incentivised by the state to do their jobs with some of the liquidated assets from failed speculators, especially from BTL merchants, redistributing assets. An 60%-90% property crash wouldn't bother my parents, value wise, or many other people I know, provided the main basic things they need to live or are affordable and available such as food and heating. Society pulling together to get through it and not giving in to your criminal lot. Quote Link to comment Share on other sites More sharing options...
Potwalloper Posted March 22, 2009 Share Posted March 22, 2009 It's sad but what you are all failing to see is that the rich are getting richer on the back of this downturn not you. I thought we were all rich. Aren't you then Sibbers? Quote Link to comment Share on other sites More sharing options...
renterbob Posted March 22, 2009 Author Share Posted March 22, 2009 A nominal 90% would signify an end of the world scenario. I think a more likely fall is 80% in real terms between currency and price falls. Sterling has already fallen 30% and house prices have fallen around 10% on average and the HPC has barely begun. I believe currency falls take a while to move into importation prices but definitely expect a lot of shelf inflation over the next 12 months which will affect sentiment greatly and may tip it into the proper crash territory where people would never touch property again etc. you mean almost 20% falls, surely... It could be renamed to the 80-90% club, and judging by some of the comments here, membership would increase by 100000% How far we've come in a small time. Quote Link to comment Share on other sites More sharing options...
renterbob Posted March 22, 2009 Author Share Posted March 22, 2009 It was in 2001 that I thought prices were getting too high and outside fundamentals. Yes, if there was a crash then, none of this would have happened. But politcians needed votes. Quote Link to comment Share on other sites More sharing options...
renterbob Posted March 22, 2009 Author Share Posted March 22, 2009 Sibbers, unfortunately I am not extreme enough for the 90pc club. But I do have to disagree with your optimism that house that were on for £200k might just fall to £175k. I have about 1100 examples of houses that £200k going now for £160k in my property bee tool. The market has droped 20-25% already in terms of achieved prices and we still have someway to go.My original estimate for the crash was 45% (only half way to the 90pc club), but I am now getting overtaken by the pundits calling 55% etc. Quite scary really. Personally I believe 50% will be a tipping point, if the falls breach this level, then we are in big trouble as it will be like a damn failing. At that point we will enter a 10-20 year downward spiral, and perhaps like parts of Japan some prices could fall 90%. I personally don't think that will be allowed to happen as it is just about money in the system and money can be counjured up and given away as Injin often warns, but whilst the Government still believes it has to be seen to be taking reasoned and sensible action we won't go for a massive printing run - this will change if house prices fall 50% as by then we'll have 5 million unemployed. Spot on. Quote Link to comment Share on other sites More sharing options...
Rare Bear Posted March 23, 2009 Share Posted March 23, 2009 it is hard for people to imagine 90% off peak prices. As has been pointed out for prices to fall that far would mean that the uk is in serious trouble. What is being missed is that if prices fell 90% then the cost of houses would be largely irrelevant to the vast majority of the hungry population.For prices to fall that far would mean a collapse of the uk, a crash in sterling, foreigners refusing to buy our bonds, war, the imf, etc etc. 90% off doesn't sound that plausible because people are thinking in terms of a house valued at £250k being worth £25k, but is everyone so sure that we couldn't go icelandic or worse still? When Johny Foreigner refuses to buy our bonds interest rate go back up. Think of mortgage rates of 10%+. Quote Link to comment Share on other sites More sharing options...
renterbob Posted March 23, 2009 Author Share Posted March 23, 2009 When Johny Foreigner refuses to buy our bonds interest rate go back up. Think of mortgage rates of 10%+. He'll let us down. Quote Link to comment Share on other sites More sharing options...
renterbob Posted March 23, 2009 Author Share Posted March 23, 2009 90% is possible,80% likely.which camp am I in? The ******* loony camp! Welcome. Quote Link to comment Share on other sites More sharing options...
ʎqɐqɹǝʞɐɥs Posted July 5, 2009 Share Posted July 5, 2009 Looks like the HPC 90%er Club has now officially closed due to poor demand. Quote Link to comment Share on other sites More sharing options...
Neil B Posted July 5, 2009 Share Posted July 5, 2009 suppose there needs to be a figure for worst case scenario90% to me would be after currency reset, massive tax increases, 20% + unemployment, martial law, war etc I expect 2001 prices with 3x salary mortgages. you just need to ask why is UK so wealthy now and what can sustain that wealth in the future. I agree with 2001 prices - I think this is realistic. I'd argue about the UK being 'wealthy' though - have you seen how much debt we are in? Quote Link to comment Share on other sites More sharing options...
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