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Will House Prices Ever Be This High Again ?

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I am beginning to think that we might not possibly even see houses get as high as they did last summer ever again.Demographically there are probaly going to be fewer of us than there ever has been before because of lower birth rates due to inability to take the risk associated with bringing a child up.Once the baby-boomers start to decrease in number then there really are going to be big population shifts.When we go through the recession that I think is inevitable then the prospects for immigrants are not going to be as rosy so there is less oppportunity and incentive to work here.I dont think that anyone is in denial about the mickey mouse economy that has been driven by high levels of debt and the out of control levels of house price inflation that we have seen under labour.

Oversupply due to stupidly optimistic levels of building is just going to aggrevate the situation even further.Once we get year negative on year figures for the housing market streaming into the papers properly and the downturn gets even more pronounced then the property market could possibly turn south in an even bigger way than has ever been seen before.If the government does its best to slow it down we are still going to have falls but over an even bigger time scale than expected.Once it dawns on people that the low inflation environment is never going to allow wages to catch up with property in any given terms like high inflation did in the past we will probably be looking at a downturn much more severe than any of us expected.

I think that the negative equity stories that were rampant in the early nineties are going to be a drop in the ocean in comparison to what is coming our way this time............................

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I am beginning to think that we might not possibly even see houses get as high as they did last summer ever again.

Unless you have some kind of methodology for forecasting what house prices will be like in, let us say, 100,000 years' time, I'd be cautious about throwing round words like "ever again". You might want to stick with "in our lifetime", or some other slightly shorter term horizon.

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Your too early with that statement... when the masses start saying that then its the time to buy... and yes house prices will recover and yes they will boom again. Its not differnt this time only bigger.

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Unless you have some kind of methodology for forecasting what house prices will be like in, let us say, 100,000 years' time, I'd be cautious about throwing round words like "ever again".

How very true such a statement might come back to haunt you....... to be serious for one minute Zorn.....are you taking the p*ss :D

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I am beginning to think that we might not possibly even see houses get as high as they did last summer ever again.Demographically there are probaly going to be fewer of us than there ever has been before because of lower birth rates due to inability to take the risk associated with bringing a child up.Once the baby-boomers  start to decrease in number then there really are going to be big population shifts.When we go through the recession that I think is inevitable then the prospects for immigrants are not going to be as rosy so there is less oppportunity and incentive to work here.I dont think that anyone is in denial about the mickey mouse economy that has been driven by high levels of debt and the out of control levels of house price inflation that we have seen under labour.

Oversupply due to stupidly optimistic levels of building is just going to aggrevate the situation even further.Once we get year negative on year figures for the housing market streaming into the papers properly and the downturn gets even more pronounced then the property market could possibly turn south in an even bigger way than has ever been seen before.If the government does its best to slow it down we are still going to have falls but over an even bigger time scale than expected.Once it dawns on people that the low inflation environment is never going to allow wages to catch up with property in any given terms like high inflation did in the past we will probably be looking at a downturn much more severe than any of us expected.

I think that the negative equity stories that were rampant in the early nineties are going to be a drop in the ocean in comparison to what is coming our way this time............................

I agree with everything you say. We have a fake economy that is fuelled by buy today, pay, er, sometime much later. The next few years will see an acceleration of what we've seen over the last year or so - people waking up to reality. The thing is, the world economy isn't standing still: China, India and Eastern Europe will have a huge effect over the next few decades. If Briton's do nothing more than continue to stab themselves in the back with ever spiralling debt, then we are going to be in big trouble. My own industry, one of many, has seen a massive degree of outsourcing already; those jobs aren't going to be coming back. And when you cost-base is centered on a typical worker trying to finance a £150-300k mortgage, your not ever going to be competitive. The next 5-10 years will be interesting indeed. The party is over.

Nomadd

Edited by Nomadd

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You might want to stick with "in our lifetime", or some other slightly shorter term horizon.

I think that's probably what Nomadd meant anyway, but I think there's a point here. I have said this before on this forum, but thought I might repeat it here.

Basically, one way you could look at what's happened to the UK property market is that basically it has effectively been a 35 year bull-market (with a 6 year bearish period in the early 90s).

You could certainly describe it like that if you look at a graph of nominal prices between 1970 and today, and also in the sense that people's expectation on property is that it always rises, period.

If you take the view that all of this bull run has been almost an entirely baby-boomer led phenomenon, then the house price outlook for the NEXT 35 years looks a lot less certain !

Once the baby boomers start disapearing and leave their massively over-inddebted children in their wake, then how can house prices ever be the same at least for the next generation ?

Answer is surely they can't.

Perhaps in 15-20 years we're looking at house prices more or less the same as what they are now.... if that's the case then that makes the "property as my pension" crowd of today not looking good.

But, I would finish by saying that who knows what will happen this far ahead - the next few years is going to be very interesting to see which of the hyper-inflation vs deflation vs stagflation scenarios play out.

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.Demographically there are probaly going to be fewer of us than there ever has been before because of lower birth rates due

The UK has a growing population. It grew by 281,200 people in the year to mid-2004, and the average growth per year has been 0.4 per cent since mid-2001. The UK population increased by 7.0 per cent since 1971, from 55.9 million. Growth has been faster in more recent years. Between mid-1991 and mid-2003 the population grew by an annual rate of 0.3 per cent.

In every year since 1901, with the exception of 1976, there have been more births than deaths in the UK and the population has grown due to natural change. Until the mid-1990s, this natural increase was the main driver of population growth. Since the late 1990s, although there has still been natural increase, net international migration into the UK from abroad has been an increasingly important factor in population change.

from statistics.gov.uk

Edited by ILikeBigBoobs

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The UK has a growing population. It grew by 281,200 people in the year to mid-2004, and the average growth per year has been 0.4 per cent since mid-2001. The UK population increased by 7.0 per cent since 1971, from 55.9 million. Growth has been faster in more recent years. Between mid-1991 and mid-2003 the population grew by an annual rate of 0.3 per cent.

In every year since 1901, with the exception of 1976, there have been more births than deaths in the UK and the population has grown due to natural change. Until the mid-1990s, this natural increase was the main driver of population growth. Since the late 1990s, although there has still been natural increase, net international migration into the UK from abroad has been an increasingly important factor in population change.

from statistics.gov.uk

I dont trust government statistics and am very sceptical about the numbers quoted on that site.But not withstanding what you mentioned in your post I was originally talking about the next ten to twenty years so the relevance of your past data may well seem rosy by comparison to what may still come to pass.We are talking about about a much more slimmed down number of people that fall into the category of 'working age'.Also a much less welcoming and easily accesible prospect of working in the jobs market.

The extent to which the jobs market has been propped up by the housing market is still to be seen.As builders scale down their developments and places like B&Q start to thin down their work force we are seeing just what a difference the present situation is having.We seem to have an economy that needs to have a runaway housing market and rampant credit card spending in order to progress.We have hardly any manufacturing base to fall back on and have never been so dependant on importing so much of the stuff we consume.So far this situation has been balanced out but the value of sterling will be seriously under attack soon.Aggresive interest rate hikes from america,the effect of hurricane katrina on the oil reserves,and other lucrative eastern economies could well turn the tables on us very soon................

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The UK has a growing population. It grew by 281,200 people in the year to mid-2004, and the average growth per year has been 0.4 per cent since mid-2001. The UK population increased by 7.0 per cent since 1971, from 55.9 million. Growth has been faster in more recent years. Between mid-1991 and mid-2003 the population grew by an annual rate of 0.3 per cent.

In every year since 1901, with the exception of 1976, there have been more births than deaths in the UK and the population has grown due to natural change. Until the mid-1990s, this natural increase was the main driver of population growth. Since the late 1990s, although there has still been natural increase, net international migration into the UK from abroad has been an increasingly important factor in population change.

from statistics.gov.uk

But everyone is saying that the current younger generations are going to be first to die before their parents. Poor very diet, not enough fruit/veg, no exercise - an NHS timebomb :blink:

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The UK has a growing population. It grew by 281,200 people in the year to mid-2004, and the average growth per year has been 0.4 per cent since mid-2001. The UK population increased by 7.0 per cent since 1971, from 55.9 million. Growth has been faster in more recent years. Between mid-1991 and mid-2003 the population grew by an annual rate of 0.3 per cent.

I don't dispute it but the demographics are also different.By that I mean the number of single occupied domiciles has rocketed.

once people learn that singledom has added risk(if you get laid off then you have a BIG problem),in a way that cohabitation didn't,you might find peole start to revert back to co-habiting as a means of limiting cost and risk.

....in which case the recent batch of 1/2bd newbuilds are bollocksed.the next cycle may well see folks going back to flatshare in 3/4 bed etsablishments....precisely the ones the oldies may try and downsize from......that would be neutral,aside from the massive supply of 1/2bd that have just been built.

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There's a huge advantage in having seen all this before. People were asking exactly this question in 1989 and, for six or seven years, it appeared the answer was in the negative. But once the rise had started, it appreared to be unstoppable. The property market is cyclical, it will recover at some point and, once it's started rising, prices will increase just like they did this time. There's always a new generation coming along who don't remember "last time".

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How very true such a statement might come back to haunt you....... to be serious for one minute Zorn.....are you taking the p*ss  :D

My point is that the original claim is clearly complete rubbish. Using such an extreme time interval as 100,000 years was simply done for the sake of effect, and to prove the point. You may take the view that prices in 10 years' time will be lower than they are today. What about 20 years? 50 years? 100 years? 500 years? And so on.

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My point is that the original claim is clearly complete rubbish. Using such an extreme time interval as 100,000 years was simply done for the sake of effect, and to prove the point. You may take the view that prices in 10 years' time will be lower than they are today. What about 20 years? 50 years? 100 years? 500 years? And so on.

Let me put it another way. At present, you have to work for seven years to earn enough money to buy a house -- house prices are about seven times salaries. If earnings continue to rise at 4% per year, and prices "never again" rise above current levels, then in a mere 1,000 years' time you will be able to buy a house with the amount of money you earn in one billionth of a second -- work for a whole second, and you'll be able to buy every house in the world. Does anyone think this is likely to happen?

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There's a huge advantage in having seen all this before.  People were asking exactly this question in 1989 and, for six or seven years, it appeared the answer was in the negative.  But once the rise had started, it appreared to be unstoppable.  The property market is cyclical, it will recover at some point and, once it's started rising, prices will increase just like they did this time.  There's always a new generation coming along who don't remember "last time".

yes we have seen all this before,but this time it's different,as you BTL guys like to keep harping on about.

yes the property market cycle is about 14 years in duration,as does seem to be the electoral cycle these days,but there are also other cycles to observe...the commodity cycle is about 30 years in length.

the debt cycle is a bit longer.

If you look on a purely mathematical basis and see when these cycles converge/diverge....a bit like when planets align,then you might be a bit closer to the mark.

This is where we will miss Dr Bubb,he has already forewarned of this kind of situation(my own view is we are having a re-run of 1974-89 commodity cycle,so that's why I'm long on japan)

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But everyone is saying that the current younger generations are going to be first to die before their parents. Poor very diet, not enough fruit/veg, no exercise - an NHS timebomb  :blink:

I've heard this so many times and it pee's me off, people get the wrong end of the stick, nobody has said anything about children expiring before their parents.

What they're saying is the current generations life expectancy may be less than their parents, i.e. if the average lifespan is now 80 for example because of the drink/drugs/bad diet etc, the current generation may only last till 75.

A slight decrease in life expectancy quite different than dying before their parents.

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Unless you have some kind of methodology for forecasting what house prices will be like in, let us say, 100,000 years' time, I'd be cautious about throwing round words like "ever again". You might want to stick with "in our lifetime", or some other slightly shorter term horizon.

I know the point you're making, but in 100,000 years humans will most definitely will be all gone.

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I know the point you're making, but in 100,000 years humans will most definitely will be all gone.

In _100_ years, humans as we know them will probably be gone, with genetic engineering and cyborg technologies. Just think of the technological change in the last century, and imagine the same kind of increase again this century.

Any prediction we make about 2100 today will probably be about as useful as the Victorians worrying about their predictions that by 2000 there would be so many horses that London would be buried under twelve feet of horse crap.

Personally I think there's a fairly good chance that house prices in the UK will never be higher than they are today. And when I say 'never', I mean not from now until the end of time...

If earnings continue to rise at 4% per year

Why will earnings rise at 4% per year if there are plenty of Chinese people who'll do your job for 5-25% of the price?

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What was a serious post with one throw away remark has descended into the sort of argument my kids pick.

Okay, forseeable future then. You knew what he meant.

take a chill pill Bob :ph34r:

I support his argument, in fact I posted on another forum along the same lines back in early July;

There is a big realignment of where the creation of wealth production is taking place, along side a shift in the area's that offer the biggest potential for sales growth. And that is in places like China, India, Vietnam etc.. Cheap labour , willing labour, and hungry to achieve labour. Corporate business feeds on two things, cheap labour and expanding markets....well there are billions of people in the likes of India and China wanting to aspire to the Western consumer dream.

So when you look at that and compare it to a costly state benefit system where the workers need a wage that will support high taxes, and sky high rip off house prices. And you have got to start pondering the unthinkable, could we possibly be at a point in time where house prices [in real terms adjusting for inflation] fail to rise over the historical long term.

What I'm saying in short is, historically since the industrial revolution and the onset of the industrialisation of mass production. We in the Western economies produced the products that in essence created our wealth. Were as now in terms of employment of labour we produce nothing, we have become consumers of wealth instead of producers of wealth.

And is this current government sponsored and nurtured "Pyramid Buying" get rich quick by the ever raising value of your house scheme the last straw. Some would say it is a transferral of the savings [the wealth] of the young non home owning [but aspiring to own] section of society, to the older generation of home owners. A Government engineered scheme induced via lacked lending criteria and low interest rates. Wealthy baby boomer pensioners will take the strain off the government through this transferral of wealth or so they the government hope.

And by the time the poor young wage slaves in hock to the modern day equivalent of the latter day Slave owners "The Banking Industry" Prudence Brown will have secured his premiership, and retired with his "gongs" and a cushy job in the "City" as payment for his services to the "Money Lenders"

But hey never mind its boring wising up to being ripped off, when you can immerse yourself in reality TV shows like Celebrity Love Island, Big Brother, Trisha..........The dumbing down of the voting public sure pays corporate/political dividends.

Happy now ;)

Edit: And as it happens I posted it on this site a couple of week back on a similar thread to this one [but I cannot track it down] As is the way with an ever growing membership, the same questions and ideas are routinely posted under new threads. So you see you called that one totally wrong :rolleyes:

Edited by Catch22

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  • 301 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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