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guitarman001

House Prices/sale Up 10% In Edinburgh?

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Hey,

Now I know this is total b*ll*cks, but a friend of mine who is adamant on making money on property in the future first said last night that prices in Edinburgh have always risen. Pfft. He also said that one paper reported either a rise in prices or sales (I take it to be sales) having increased in Edinburgh by 10% in the last month or two. I think this is total codswollop and told him as such. He seemed infuriated that I suggest the papers could be lying - I despair. Can anybody think of where this story may have been published or was he really talking rubbish?

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Hey,

Now I know this is total b*ll*cks, but a friend of mine who is adamant on making money on property in the future first said last night that prices in Edinburgh have always risen. Pfft. He also said that one paper reported either a rise in prices or sales (I take it to be sales) having increased in Edinburgh by 10% in the last month or two. I think this is total codswollop and told him as such. He seemed infuriated that I suggest the papers could be lying - I despair. Can anybody think of where this story may have been published or was he really talking rubbish?

I dont know but I was recently shot down in flames by a group of friends who had all been reading something in the papers about house prices in Edinburgh 'recovering' and now was the best time to buy 'before it was too late'.

They would not accept that the papers would be lying to them, or the fact that only three houses and a garage have been sold across the city recently could possibly of had an effect in making the average price figues complete garbage.

The mindset amongst just about everyone I know (apart form one guy who works at one of the big banks) is that prices can only ever go up and what we have now is a minor blip.

When I point out issues about salary multiples or the type of salary that is now requred to buy a shithole in Gorgie they just say things like ' that is the way it is, get used to it' they have fallen for the lie about low interest rates too. They dont seem to grasp that when they go up (as they have to) there is going to be carnage amongst those who have overstretched. But of course our pall Gordon is 'not going to let that happen'.

The propaganda wins every time. Most of my friends are highly educated in good jobs, the fact that few of them can afford to buy even a flat in Gorgie seems to have passed them by.

Edited for spelling

Edited by lulu

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Same situation here. Guy I was talking about is to be a civil engineer soon. They buy everything they read - they even think America caused all of the problems, and say that things are the way they are, you just have to go along with things and buy. Get the rod out your a*se and all that.

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Hey,

Can anybody think of where this story may have been published or was he really talking rubbish?

Hi,

indeed there was a report by Registers of Scotland reporting a 10.4% price increase in Edinburgh.

That report compared the 28-day period from 17/05/09-13/06/2009 to the previous 28-day period 19/04/09-16/05/09.

I cannot find this report on their web site, so I attach it:

130609_28day.pdf

However the later reports do indicate that that was a statistical bleep.

For example, a similar report for the latest 28 day periods

(i.e. only two weeks later, for 31/05/09-27/06/09 relatively to 03/05/09-30/05/09)

shows only 5.1% increase:

http://www.ros.gov.uk/public/news/press_re...flash/28day.pdf

Cheers :)

130609_28day.pdf

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Statistical blip or not, I think may areas of Edinburgh will stabilise, and show some capital growth next year. Just supply and demand I am (not) afraid. Very few new homes being built inn the centre, huge demand, thus relatively stable prices and a good outlook.

We are not though the woods yet, but expect growth in future, not a fall.

Edited by viewsonic

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Hey,

Now I know this is total b*ll*cks, but a friend of mine who is adamant on making money on property in the future first said last night that prices in Edinburgh have always risen. Pfft. He also said that one paper reported either a rise in prices or sales (I take it to be sales) having increased in Edinburgh by 10% in the last month or two. I think this is total codswollop and told him as such. He seemed infuriated that I suggest the papers could be lying - I despair. Can anybody think of where this story may have been published or was he really talking rubbish?

Up 10% from what level? I suspect a very small number compared to the same period last year or two years ago.

That's a bit like saying it's much better you are now only 6ft under water rather than 12ft - the point remains, you are still drowning. The bulls here would no doubt prefer to say that's a 50% improvement in position with renewed optimism about the likelihood of breathing again.

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I agree with most on this thread - except for Hamish #2 of course. ;)

Many otherwise intelligent.smart and reasoned peopled become bumbling braind dead idiots when it comes onto the subject of property. I put this down to over 10 years of constant brainwashing. This is actually brainwashing IMO. Over ten years of every story/show/report to do with property repeating the mantra over and over again. High property prices = good.

This has to have an effect on many people.

Most people who buy a place are already planning on moving up to a larger/nicer area house within the next 5-10 years.

For these people, and these are the majority, rapidly rising house prices are the worst possible thing that could happen. However they could not be happier about it. They have been brainwashed. Pure and simple. I use a simple example of a 50k flat to prove this. It takes about 1 minute to blow all the shit they have been conned with out of the water completely.

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I agree with most on this thread - except for Hamish #2 of course. ;)

Many otherwise intelligent.smart and reasoned peopled become bumbling braind dead idiots when it comes onto the subject of property. I put this down to over 10 years of constant brainwashing. This is actually brainwashing IMO. Over ten years of every story/show/report to do with property repeating the mantra over and over again. High property prices = good.

This has to have an effect on many people.

Most people who buy a place are already planning on moving up to a larger/nicer area house within the next 5-10 years.

For these people, and these are the majority, rapidly rising house prices are the worst possible thing that could happen. However they could not be happier about it. They have been brainwashed. Pure and simple. I use a simple example of a 50k flat to prove this. It takes about 1 minute to blow all the shit they have been conned with out of the water completely.

I don't want to disagree with the general sentiment of the thread.

On that point in bold its important to realise that people moving into larger houses as they start/increase the size of thier family has been normal for many decades. I first bought some 35 years ago (at the then appropriate multiplier of salary). As the kids came along and my salary increased I twice moved to a larger house. Subsequent to a divorce I've repeated part of this cycle as salary permitted - careful to avoid taking on debt as huge multiples of income.

It all depends on the career. If its one where people reach their earnings peak at 30/35 then obviously its less easy to regularly upsize. If the career is one that develops over a longer time span then they can.

Repeated upsizing was less usual 60+ years ago, in part because there was less job mobility and in part because it was possible to achieve a good family sized house with fewer turns of the cycle. (At least it was in Edinburgh. My parents moved from renting their first small flat to buying the lifetime family home shortly after I was born. )

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I don't want to disagree with the general sentiment of the thread.

On that point in bold its important to realise that people moving into larger houses as they start/increase the size of thier family has been normal for many decades. I first bought some 35 years ago (at the then appropriate multiplier of salary). As the kids came along and my salary increased I twice moved to a larger house. Subsequent to a divorce I've repeated part of this cycle as salary permitted - careful to avoid taking on debt as huge multiples of income.

It all depends on the career. If its one where people reach their earnings peak at 30/35 then obviously its less easy to regularly upsize. If the career is one that develops over a longer time span then they can.

Repeated upsizing was less usual 60+ years ago, in part because there was less job mobility and in part because it was possible to achieve a good family sized house with fewer turns of the cycle. (At least it was in Edinburgh. My parents moved from renting their first small flat to buying the lifetime family home shortly after I was born. )

It certainly has been normal for a long time. Yet people still think that rising prices help them move up to a larger place. The complete opposite is true - unless I have missed something. It is insane.

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It certainly has been normal for a long time. Yet people still think that rising prices help them move up to a larger place. The complete opposite is true - unless I have missed something. It is insane.

You're correct, it doesn't help them. Some perceive a gain so come back for more. Others have the normal motiviations and have no option but to put up with the down side of it.

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You're correct, it doesn't help them. Some perceive a gain so come back for more. Others have the normal motiviations and have no option but to put up with the down side of it.

I have pointed out this 'flaw' in people being desperate for rising prices to people before. It is usually met with either complete disbelief (no that's not right) or hostility against me for pointing it out (presumably for showing them up to be a bit think).

The most anger I got was from a guy who bought a new(ish) build flat in Dalry at probably near peak last year. He was dismayed about how it could possibly be worth less than he paid for it - it was already as he told me he actively checked the prices of others in the block that were on the market.

I had to point out to him that it was only worth what someone was able to pay for it, his opinion on what it was worth was largely irrelevent, and the best thing he could do was to stop torturing himself by constantly checking its percieved value. That unsurprisingly did not go down very well and he got so puffed up and cocky about it (how wrong I was!?) we had to end the conversation :) Not seen him since, I would be interested to see how much his dump in Dalry has been valued at now :)

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I have pointed out this 'flaw' in people being desperate for rising prices to people before. It is usually met with either complete disbelief (no that's not right) or hostility against me for pointing it out (presumably for showing them up to be a bit think).

The most anger I got was from a guy who bought a new(ish) build flat in Dalry at probably near peak last year. He was dismayed about how it could possibly be worth less than he paid for it - it was already as he told me he actively checked the prices of others in the block that were on the market.

I had to point out to him that it was only worth what someone was able to pay for it, his opinion on what it was worth was largely irrelevent, and the best thing he could do was to stop torturing himself by constantly checking its percieved value. That unsurprisingly did not go down very well and he got so puffed up and cocky about it (how wrong I was!?) we had to end the conversation :) Not seen him since, I would be interested to see how much his dump in Dalry has been valued at now :)

Dalry/Gorgie is down about 15-20% from peak pretty much across the board.

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I have pointed out this 'flaw' in people being desperate for rising prices to people before. It is usually met with either complete disbelief (no that's not right) or hostility against me for pointing it out (presumably for showing them up to be a bit think).

The most anger I got was from a guy who bought a new(ish) build flat in Dalry at probably near peak last year. He was dismayed about how it could possibly be worth less than he paid for it - it was already as he told me he actively checked the prices of others in the block that were on the market.

I had to point out to him that it was only worth what someone was able to pay for it, his opinion on what it was worth was largely irrelevent, and the best thing he could do was to stop torturing himself by constantly checking its percieved value. That unsurprisingly did not go down very well and he got so puffed up and cocky about it (how wrong I was!?) we had to end the conversation :) Not seen him since, I would be interested to see how much his dump in Dalry has been valued at now :)

That is one of the problems with a block.

I think its natural curiosity to occasionally glance as you pass by an EA's window. Do that myself every couple of years. With a house its nigh on impossible to get any genuine comparison, so the truth only comes when its time to part with real money. A block, particularly a high turnover block, makes active monitoring realistic. As you say, that is not helpful if people are not thinking the right way about somewhere to live.

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curious, thanks for that!!

Regards my mate who wants to make money out of property. The best I can hope for is he makes a decent loss and realises the error of his ways - if he actually made anything I'd never hear the end of it.

ccc, I agree.... complete brainwashing.

One of the problems is that everybody is always 'looking to the positive' - nobody wants to be a grump or face cold truths. Because I see things for what they are I'm told I'm a boring fart who should cough up for a better quality of life.

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It certainly has been normal for a long time. Yet people still think that rising prices help them move up to a larger place. The complete opposite is true - unless I have missed something. It is insane.

Bob is married, late 20s and wants to buy a house and wants to have kids. He can get a 95% mortgage and he has 5K saved so the most he can buy is a flat for 100K. He buys the biggest he can afford and starts to pay down the mortgage as he hits what should be prime earning years for him. Over the next 5 years he manages to save another 10K.

Say over 5 years hpi works out at about +50% then he can now sell his house for 150K. Sadly the house he would have loved 5 years ago which cost 200K then now costs 300K. If he sells his house for 150K he has 55K in equity plus his 10K saved which means that he can now put down a 60K (20%) deposit on this new 300K house. Sure he now owes 240K rather than 95K but of course he figures that he now has 60K of 'real' money and can sell his house for more than 300K whenever he wants to.

That's why people think hpi helps them.

If there as no hpi then HPnone Bob simply has to wait until he has 10K in the bank before he can manage the 5% deposit on the 200K house. That is undoubtedly easier but then HPI Bob can cross over dimensions and say "hey my house is now worth 310K and I only owe 240K so I have 70K saved up, how about you?" HPnone Bob says "I put a 10K down and took out 190K mortgage and my house is still worth 200K and I have 5K in the bank."

That's why people think that hpi makes them rich. HPI Bob appears to have 70K in assets (i.e. his equity) and is only 50K more in debts than HPnone Bob which makes it look like HPI Bob is 20K better off. Even better, if HPI Bob and HPnone Bob both had to sell their houses then HPI Bob ends up with about 70K in cash and HPnone Bob ends up with about 15K in cash.*

Of course people don't bother wondering who will buy their house, or don't calculate that smaller debts allows them to save more, or where they will live afterwards and so on. They look at the scores on the doors. I don't know anyone in my everyday life who doesn't think like that and even when they get it wrong they don't think it was the system that's wrong it was either just 'bad luck' or, currently, 'greedy bankers.'

One of my specialist subjects is belief systems and trying to understand why people think the way they do. Most people are empiricists and put very high value in personal experience and experience of those near them. Crashes by their nature hurt far more people than they help so crashes are experienced as bad things. Stable prices are unremarkable therefore tend not to be experienced. Booms are full of people reporting either actual sales and big profits or believing they are sitting on big profits so booms are experienced as positive things.

There's nothing "insane" about this reasoning. It's wrong: but "common sense" nearly always is once big numbers become involved.

*Just to continue. 5 years later HPI Bob wants to downsize back to his original flat after another 50% bout of HPI. His house is now worth 450K while his original flat is now worth 225K. He sells his house and ends up with about 220K in equity so he can pretty much buy his original flat outright. HPnone Bob also decides he doesn't need a house so trades down to a 100k flat from his 200k house. He has about 15K equity in it from deposit and paying off capital and has managed to save about 10K so he only needs a mortgage of 75K.

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^^^^ Excellent post!

As for Edinburgh .... in the last 2 months I've bid on two 3 bed semi detached houses. (Although I'm very bearish on property and Edinburgh's prospects in the coming years, personal circumstances dictate). One of these was o/o £315k and the other o/o £350k. We bid only a few £k over the asking on each and were outbid by 27k on one and > 30k on the other! Both houses needed significant amounts of work done and I think each "winning" bidder has overpaid massively. One only had 3 notes of interest.

goes to show though that folk in Edinburgh still think nothing wrong with paying 10x the average salary on an decent house; despite all that has happened in the last 2 years. I think its an issue of the lack of supply of these types of houses on the market driving the still small number of bidders into a bit of a frenzy.

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Just supply and demand I am (not) afraid. Very few new homes being built inn the centre, huge demand, thus relatively stable prices and a good outlook.

Aah the pent-up demand! Who gives a flying goat's fart if nothing is being built. Have you seen the pent-up supply languishing with the reluctant landlords* on Citylets et al?

*Correction: Owners of vacant properties wishing to be reluctant landlords.

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Bob is married, late 20s and wants to buy a house and wants to have kids. He can get a 95% mortgage and he has 5K saved so the most he can buy is a flat for 100K. He buys the biggest he can afford and starts to pay down the mortgage as he hits what should be prime earning years for him. Over the next 5 years he manages to save another 10K.

Say over 5 years hpi works out at about +50% then he can now sell his house for 150K. Sadly the house he would have loved 5 years ago which cost 200K then now costs 300K. If he sells his house for 150K he has 55K in equity plus his 10K saved which means that he can now put down a 60K (20%) deposit on this new 300K house. Sure he now owes 240K rather than 95K but of course he figures that he now has 60K of 'real' money and can sell his house for more than 300K whenever he wants to.

That's why people think hpi helps them.

If there as no hpi then HPnone Bob simply has to wait until he has 10K in the bank before he can manage the 5% deposit on the 200K house. That is undoubtedly easier but then HPI Bob can cross over dimensions and say "hey my house is now worth 310K and I only owe 240K so I have 70K saved up, how about you?" HPnone Bob says "I put a 10K down and took out 190K mortgage and my house is still worth 200K and I have 5K in the bank."

That's why people think that hpi makes them rich. HPI Bob appears to have 70K in assets (i.e. his equity) and is only 50K more in debts than HPnone Bob which makes it look like HPI Bob is 20K better off. Even better, if HPI Bob and HPnone Bob both had to sell their houses then HPI Bob ends up with about 70K in cash and HPnone Bob ends up with about 15K in cash.*

Of course people don't bother wondering who will buy their house, or don't calculate that smaller debts allows them to save more, or where they will live afterwards and so on. They look at the scores on the doors. I don't know anyone in my everyday life who doesn't think like that and even when they get it wrong they don't think it was the system that's wrong it was either just 'bad luck' or, currently, 'greedy bankers.'

One of my specialist subjects is belief systems and trying to understand why people think the way they do. Most people are empiricists and put very high value in personal experience and experience of those near them. Crashes by their nature hurt far more people than they help so crashes are experienced as bad things. Stable prices are unremarkable therefore tend not to be experienced. Booms are full of people reporting either actual sales and big profits or believing they are sitting on big profits so booms are experienced as positive things.

There's nothing "insane" about this reasoning. It's wrong: but "common sense" nearly always is once big numbers become involved.

*Just to continue. 5 years later HPI Bob wants to downsize back to his original flat after another 50% bout of HPI. His house is now worth 450K while his original flat is now worth 225K. He sells his house and ends up with about 220K in equity so he can pretty much buy his original flat outright. HPnone Bob also decides he doesn't need a house so trades down to a 100k flat from his 200k house. He has about 15K equity in it from deposit and paying off capital and has managed to save about 10K so he only needs a mortgage of 75K.

Good for those moving down. Bad for those moving up. I imagine the second group outnumbers the first by a massive amount. Afterall how many times will a person 'downsize' ? Once in their entire life. how many times will a person 'upsize' ? On average probably 3-4 times.

I see what you are saying. I know why people like to think HPI helps them. Most cannot for the life of them comprehend having 100k sitting in the bank. However massive HPI creates this illusion/possibility. I totally see why people are blinded by it. I still think it is insane thinking. I can understand people want the house they live in to be worth more. However this is more than cancelled out by the fact they have to pay for it - plus interest.

Edited by ccc

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^^^^ Excellent post!

As for Edinburgh .... in the last 2 months I've bid on two 3 bed semi detached houses. (Although I'm very bearish on property and Edinburgh's prospects in the coming years, personal circumstances dictate). One of these was o/o £315k and the other o/o £350k. We bid only a few £k over the asking on each and were outbid by 27k on one and > 30k on the other! Both houses needed significant amounts of work done and I think each "winning" bidder has overpaid massively. One only had 3 notes of interest.

goes to show though that folk in Edinburgh still think nothing wrong with paying 10x the average salary on an decent house; despite all that has happened in the last 2 years. I think its an issue of the lack of supply of these types of houses on the market driving the still small number of bidders into a bit of a frenzy.

I think the large sums of money 'earned' in Edinburgh over the past 10 years is being slowly sucked away by those thinking they have 'bagged a bargain'.

Maybe it will turn out they are right. I serioulsy doubt it. Over 400k for a 3 bed semi in Edinburgh ? That is insane. Even in a nice area.

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They say sales are up.... from today's Edin Eve News;

City home sales show a rise

Only 6 comments so far.... wade in, folks.

I used to post on there but soon realised how pointless it was. People are brainwashed and just do not want to hear the truth. At least 'The Landlord' as stopped posting too - his mum has probably pawned his computer. He used to post nothing other than something along the lines of ' in x (not many) years time the price of a one bedroom flat in Gorgie will be £200,000' no point arguing with people like that.

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Yes these figures tie in with what i called 3 months ago the prices are on the up again, they hit there crash price at the beginning of this year with the 12 to 15 percent drop from peak.

Prices after the last 4 months of rises will see us back up to near peak bubble prices by spring next year, by the time of the election 2007 prices will be surpassed.

For those who have waited, sorry folks you have missed the property train, it has left the station, but dont worry rents are down at the moment, so make sure you got a long lease, because the suppñy and demand issue will hike the old rents over the next 2 years, as landlords squeeze them back up again.

Those who bagged a 5 year fixed rate low interest deal, and bought a property 15% down in price, well done you got it made, those who missed the train keep on a saving up your deposit, the next crash will surely come, by 2024 i predict another crash. :lol:

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