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Boom'n'Bust

House Prices Set For Soft Landing And Stagnation

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"Affordability is returning to the market after the excess of 2003 and 2004. But there still remains a need for house price inflation to remain roughly stagnant for a few more years, restoring value as earnings grow faster than house prices."

Utter hogwash!! If prices are to stay level they would have to do so for more than a few years!!

What planet are these people on???

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If this is the definition of a crash:

The majority of economists defined a crash as a sharp drop in prices of between 10 and 20 percent within a year.

then it is not a big deal to guess it will not happen (I'm not saying it can't /won't but the odds against a 10%+ nominal terms fall over the next 12 months must be fairly good).

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I agree, but like most people I would be quite happy with a 9% nominal drop per year (with 5% inflation, say) for the next decade, and no "crash". :D

then what does this mean......?

on top of a number of inidividual reductions I've seen of £325k down to £300k and a £349 down to £310, a small estage agent near me puts and A4 page in their window and if the price drops sticks a bit of paper over the old price [not very professional I hear you say!] but the upshot is that out of some 50 odd propeties on view around 33% have been reduced in price!!

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Who is Bruno (honestly?)

I say 90% because property is about 2 to 3 times overvalued, and I reckon it will be about 2 to 3 times undervalued, after the third or fourth false dawn that turns into another decline in about five to ten years time.

Bruno was a popular HPC forum user who predicted some monster of disasters during the crash. He's got a website somewhere that predicts the "DOOMSDAY OF A HPC", although I can't find the link. So I guess your being compared to him, :lol::P

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>LONDON (Reuters) - House prices will rise by just over one percent in 2005 after years of double-digit growth but the risk of a crash has eased, according to a Reuters poll of 24 economists<

Ah 24 economists, and who would they be exactly ?.....Chief economist for the Nationwide Building Society.......Chief Economist for the Halifax...I'm always sceptical where an article lacks detail......remember New labours pledge.....No Tax rises hahahahaha only suckers believed that one......millions up on millions of them as it happened. :rolleyes:

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I don't know why people persist with the 'Soft Landing' scenario.

Asset bubbles do not enjoy soft landings.

Asset bubbles in liquid markets like art and stocks and crash in minutes.

Property enjoys a relatively soft crash because it is not a liquid market. And, of course, the primary reason to buy a house is not (necessarily) to make money.

When the primary reason to buy a house is making money (and for all BTLetters this was the reason), a crash could be more dramatic despite the lack of liquidity.

When the message settles firmly home that prices are going DOWN, there will be a stampede to get to the BTL exit.

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Who is Bruno (honestly?)

I say 90% because property is about 2 to 3 times overvalued, and I reckon it will be about 2 to 3 times undervalued, after the third or fourth false dawn that turns into another decline in about five to ten years time.

Looking back at previous crashes, I don't think things correct downwards that much. They may inflate alot, but they don't seem fall back to where they started.

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All I can say is that the long term average of price to salary is about 3.5.  That means it has spent half the time under 3.5.

Even that oft-quoted average was raised recently from 3 to 3.5. That's largely to do with the length of recorded history, and the latest bubble.

Recently the ratio has never gone under 3ish.  But after a major depression houses are paid for in cash - no credit is available.  How much cash could your closest competitor pay for a house?  That's what they will cost.

More catastrophe than crash, then.

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Personally I think prices will correct by about 150%. House owners will be paying HPC members large amounts of money to take their houses. However since the whole currency/banking system will have also collapsed ( I think this happened in Rome BC 200) HPC members will only take payment in gold sovereigns.

The problem is that all the gold sovereigns will have already have been bought and buried in the gardens of HPC members. So home owners will offer sexual favours/body parts to HPC members in exchange for them to take their houses off their hands.

Honestly this will happen. I could draw a graph of my shoe size over time and plot it against the number of flowers in my garden and that will prove it :huh:

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I don't know why people persist with the 'Soft Landing' scenario.

Asset bubbles do not enjoy soft landings.

Asset bubbles in liquid markets like art and stocks and crash in minutes.

Property enjoys a relatively soft crash because it is not a liquid market. And, of course, the primary reason to buy a house is not (necessarily) to make money.

When the primary reason to buy a house is making money (and for all BTLetters this was the reason), a crash could be more dramatic despite the lack of liquidity.

When the message settles firmly home that prices are going DOWN, there will be a stampede to get to the BTL exit.

Spot on!

VP

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  • 339 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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