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Trampa501

Have We Got It Wrong Regarding Hpc?

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Okay, so there's been a correction, but house prices seem fairly stable (even rising) in a lot of areas, and the claim in many countries is that the recession is over. Is that it? Are house prices going to stay historically high? Will we have to adjust to 40 year mortgages, higher taxes etc etc ?

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Okay, so there's been a correction, but house prices seem fairly stable (even rising) in a lot of areas, and the claim in many countries is that the recession is over. Is that it? Are house prices going to stay historically high? Will we have to adjust to 40 year mortgages, higher taxes etc etc ?

2 things. GE next year have to keep the housing market alive as voters won't be happy.

second banks need house prices not to crash otherwise their balance sheets go out the window

so anything will be done to acieve this

simples

Edited by mrlargeredpants

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Okay, so there's been a correction, but house prices seem fairly stable (even rising) in a lot of areas, and the claim in many countries is that the recession is over. Is that it? Are house prices going to stay historically high? Will we have to adjust to 40 year mortgages, higher taxes etc etc ?

The average house round here is 150k, and the average wage is 25k. Base rate is 0.5% and the BoE is printing money.

The only way that this is sustainable is if the BoE continues printing money for the next 25 years and keeps the base rate below 1%.

Guess how much a litre of petrol will cost then.

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The govt will borrow and spend about 20% of GDP this year.

No-one wants to lend them the money, so they've had to get the BoE to print it.

Recovery is based on this alone.

Can't go on for much longer. Huge falls to come

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Okay, so there's been a correction, but house prices seem fairly stable (even rising) in a lot of areas, and the claim in many countries is that the recession is over. Is that it? Are house prices going to stay historically high? Will we have to adjust to 40 year mortgages, higher taxes etc etc ?

"Is that it " - Well thats the worst of it

"Are house prices going to stay historically high? " if you think they are high now then yes

"Will we have to adjust to 40 year mortgages, higher taxes etc etc ?" higher taxes yes. 40 year mortgages most likely.

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"Is that it " - Well thats the worst of it

"Are house prices going to stay historically high? " if you think they are high now then yes

"Will we have to adjust to 40 year mortgages, higher taxes etc etc ?" higher taxes yes. 40 year mortgages most likely.

I thought you were in banking. clearly ignorance is still rife in the game.

banks are busted. only tax payers are keeping them afloat...and thats SYSTEMICALLY afloat.

asset prices will fall to meet the available finance.

and I mean real prices not nominal. and I dont see real wages rising at all, they seem to be falling.

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The govt will borrow and spend about 20% of GDP this year.

No-one wants to lend them the money, so they've had to get the BoE to print it.

Recovery is based on this alone.

Can't go on for much longer. Huge falls to come

why cant it go on for much longer?

What stops them just continueing to print money?

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why cant it go on for much longer?

What stops them just continueing to print money?

because GDP isnt money.

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I do wonder myself.

Two properties have sold in my street this year, on aggregate at no significant drop from peak. And at about 10x what I would estimate to be the average salary for my street, based on known occupations: Clearly an unsustainable multiple, especially with the economy and banking system the way it is.

So, at the moment, here I am thinking there is something still very rotten in the state of the UK housing market, but also that there is no evidence of ANY (not even from 2007 prices) HPC round here.

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I thought you were in banking. clearly ignorance is still rife in the game.

banks are busted. only tax payers are keeping them afloat...and thats SYSTEMICALLY afloat.

asset prices will fall to meet the available finance.

and I mean real prices not nominal. and I dont see real wages rising at all, they seem to be falling.

"banks are busted" not exactly true is it. Doesn't feel busted here.

"and I dont see real wages rising at all, they seem to be falling." depends where you are and sector i guess. Finance sector wages themsleves never really stopped rising that i could see. Bonus got deferred to keep out the press but neve actually stopped. The major redundences happened over a year ago. Most the banks have huge headcount to fill now. Don't expect any price drops in London.

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"banks are busted" not exactly true is it. Doesn't feel busted here.

"and I dont see real wages rising at all, they seem to be falling." depends where you are and sector i guess. Finance sector wages themsleves never really stopped rising that i could see. Bonus got deferred to keep out the press but neve actually stopped. The major redundences happened over a year ago. Most the banks have huge headcount to fill now. Don't expect any price drops in London.

Finance sector wages themsleves never really stopped rising that i could see.

Only a handful of sectors can say this, for the majority no.

Most the banks have huge headcount to fill now.

What rubbish, recruitment has restarted. I hired someone last week but most of my friends who lost their jobs last year are still looking or have taken part-time work.

Don't expect any price drops in London.

Strange, drops still happening in Kensington, Chelsea and Fulham and those are just the areas I know a lot about. Some areas near good schools are stable… because the bankers can no longer afford the private school fees. Not what I'd call a recovery.

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"banks are busted" not exactly true is it. Doesn't feel busted here.

"and I dont see real wages rising at all, they seem to be falling." depends where you are and sector i guess. Finance sector wages themsleves never really stopped rising that i could see. Bonus got deferred to keep out the press but neve actually stopped. The major redundences happened over a year ago. Most the banks have huge headcount to fill now. Don't expect any price drops in London.

Perception and reality rarely coincide. It is true that banks are hiring and at higher salaries (I have just been given an offer I cannot refuse to return to the sector after taking leaving in Jul 2008, and I never intended to go back). However, I am under no illusion that the bank I am joining is solvent, should its balance sheet ever be marked-to-market. I would go as far as to say that these particular numpties never saw it coming in 2007 and were surprised that I had sold my house in Mar 2007 (completed Jul 2007); a small minority of them now realise that gov printing <> GDP and are making hay, but the large majority are of the "good times are back" mindset. I am sure that the public at some point will get their pitchforks out. When? who knows? Maybe the next bank bailout in 6m or so.....

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"banks are busted" not exactly true is it. Doesn't feel busted here.

"and I dont see real wages rising at all, they seem to be falling." depends where you are and sector i guess. Finance sector wages themsleves never really stopped rising that i could see. Bonus got deferred to keep out the press but neve actually stopped. The major redundences happened over a year ago. Most the banks have huge headcount to fill now. Don't expect any price drops in London.

thanks for the anecdotal.

course you dont feel busted...banks are having £175bn in QE injected to stop the rot in their balance sheets, they have taken known and unknown and secret billions more in haircut loans on bad and valueless assets. They have taken taxpayer guarantees to shore up confidence that they wont all collapse at 11AM today.

as I say, banks are just filled with people who havent a clue....without the real world production , there is NO banking...and its attitudes displayed about how good it is and bonuses are UP or deferred that riles people and will be the downfall of the bankers.

EDIT SPelling

Edited by Bloo Loo

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Guest pioneer31
why cant it go on for much longer?

What stops them just continueing to print money?

Ask yourself why they don't just pint money instead of taxing people...

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Guest pioneer31
Okay, so there's been a correction, but house prices seem fairly stable (even rising) in a lot of areas, and the claim in many countries is that the recession is over. Is that it? Are house prices going to stay historically high? Will we have to adjust to 40 year mortgages, higher taxes etc etc ?

They are jumping the gun a bit. one quarter of miniscule growth and they being partying.

QE is spinning this whole episode out until the election...you just watch.

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Ohhh goody gumdrops, all is rosy again in the finance sector, thanks to 175 billion injection of printed money. Thank god everything is alright again!

Except I work up north in manufacturing. I think the bankers have some seriously nasty surprises to come and they are too busy tossing each other off and lauding their wholly unjustified self importance to see it coming. It will be happy days when that time arrives :rolleyes:

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Okay, so there's been a correction, but house prices seem fairly stable (even rising) in a lot of areas, and the claim in many countries is that the recession is over. Is that it? Are house prices going to stay historically high? Will we have to adjust to 40 year mortgages, higher taxes etc etc ?

I suspect that is the case.

Many point to QE as a convenient explanation, but this was only introduced in March. By then many of the leading HPI indicators had already turned positive.

There's not much chance of HPI racing away again, but the crash looks to be all but over.

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QE is spinning this whole episode out until the election...you just watch.

ha

I love this site - so the government is able to control the economic cycle? I thought that you guys didn't believe that?

And once again I notice that the mystic meg's are predicting the 'real crash' at some far away point.

Just a quick question:

UK population reached 61.4 million by 2008 and has been growing by more than 400,000 a year.

Our numbers have grown by more than a fifth since 1950 - in less than a lifetime, in one of the most densely populated countries in the world. At the recent growth rate of 0.6% a year, population would reach 100 million before the end of this century, passing 200 million soon after 2200.

The most recent projections exceeded the previous four: on 23 October 2007 2006-based population projections released by the Office for National Statistics (ONS) showed expected population growth of nearly 17 million (more than two Londons) to 77.2 million in 2050

http://www.optimumpopulation.org/opt.more.ukpoptable.html

Given the above and the massively restrictive planning laws in the UK do you feel that it is likely that the price of houses will:

a) Fall

B) Rise?

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I suspect that is the case.

Many point to QE as a convenient explanation, but this was only introduced in March. By then many of the leading HPI indicators had already turned positive.

There's not much chance of HPI racing away again, but the crash looks to be all but over.

I see your first post was in 1930.

nice to see a bit of consistency

welcome.

by the way, QE has nothing to do with house prices...just banking solvency.

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