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Si1

House Price Crash **not** Iminent

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with continued low interest rates, govt corrections to housing benefits and public sector wages being gradual, I cannot see a physical nominal terms crash occurring, but I DO expect significant falls in real terms over 10 years or so

some local markets will be severly affected by public sector job cuts, fair enough, but nationally I cannot see the market being chopped off at the knees overnight at any point

what might actually cause this? a 2nd leg down in the credit crunch? a sudden increase in bank base rates? why would this happen? (and I am quite willing to believe they may rise gradually over next 10 years, but that is not the same thing)

so why not a very drawn out affair then?

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Ive seen a few big discounts lately...but anything at around 2003 prices gets snapped up pretty quick at pretty much asking price, which sucks for me as I refuse to pay more than 2001 prices and am a habitual haggler.

Late 2008/Early 2009 saw a few similar big discounts, only they hung around then. I reckon people will be quick to take advantage this time as they believe its a similar short lived trough. However, if the cheaper properties keep appearing for more than a few months, unlike the last rather short lived mini-trough, i think people might finally get the message and pave the way for proper falls.

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Ive seen a few big discounts lately...but anything at around 2003 prices gets snapped up pretty quick at pretty much asking price, which sucks for me as I refuse to pay more than 2001 prices and am a habitual haggler.

Late 2008/Early 2009 saw a few similar big discounts, only they hung around then. I reckon people will be quick to take advantage this time as they believe its a similar short lived trough. However, if the cheaper properties keep appearing for more than a few months, unlike the last rather short lived mini-trough, i think people might finally get the message and pave the way for proper falls.

yep certainly falls year on year on an ongoing basis seem completely realistic - not a crash tho, a kind of 5 year long water torcher drip drip drip yes

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I think that many are buying now because they fear that mortgages will become far harder to come by. I even know one couple looking to buy now because she is likely to lose her job and they won't be able to borrow as much as they can now :huh:

A twisted logic I know but it seems to be quite common.

I even had to explain to wifey, who should know better, that if we can't get a big enough mortgage in the future that there will be a reason and the bank would likely be doing us a favour.

I don't remember being taught about houses in school but can't see how the British people could have been so brainwashed without it starting as a child.

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I don't remember being taught about houses in school but can't see how the British people could have been so brainwashed without it starting as a child.

TV.

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The old beliefs are difficult to shift. How many times have you been told; 'Get the biggest mortgage you can, house prices double every 10 years.' People still believe this as a fact and this is why even today people do not see THEIR house has fallen in value. It's simply not possible to lose money on THEIR house.

http://www.nationwide.co.uk/hpi/historical.htm

UK HPI

Q4 1973 to Q3 1980 = 242% increase

Q4 1980 to Q3 1990 = 244% increase

Q4 1990 to Q3 2000 = 147% increase

Q4 2000 to Q3 2010 = 205% increase

So an average of 209.5% increase over each the past 4 decades (although the first was only 7 years).

Q4 2010 to Q3 2020 = predictions anyone??

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The old beliefs are difficult to shift. How many times have you been told; 'Get the biggest mortgage you can, house prices double every 10 years.' People still believe this as a fact and this is why even today people do not see THEIR house has fallen in value. It's simply not possible to lose money on THEIR house.

It just takes time.

Next will come inflation, interest rate rises and fewer full time employment posts and lower house prices.

Ultimately, once prices fall enough, and enough time has passed, there will be a revulsion of the concept of property ownership that will develop. There are a lot less property porn programs on now, and those that are are mostly repeats, (we are now wall to wall cooking programs), next will come gritty 'personal interest' stories, perhaps even a gritty new genre of pop music.

There will then be a window of buying opportunity that will last for a few years, while everyone reflects on the 'crazy loose lending' era of the naughties and tells you that they would not ever buy a house again.

We would be there now if it was not for the ZIRP.

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http://www.nationwide.co.uk/hpi/historical.htm

UK HPI

Q4 1973 to Q3 1980 = 242% increase

Q4 1980 to Q3 1990 = 244% increase

Q4 1990 to Q3 2000 = 147% increase

Q4 2000 to Q3 2010 = 205% increase

So an average of 209.5% increase over each the past 4 decades (although the first was only 7 years).

Q4 2010 to Q3 2020 = predictions anyone??

:rolleyes:

Edited by richyc

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http://www.nationwid.../historical.htm

UK HPI

Q4 1973 to Q3 1980 = 242% increase - inflation adjusted, 3.2%

Q4 1980 to Q3 1990 = 244% increase - inflation adjusted, 28.8%

Q4 1990 to Q3 2000 = 147% increase - inflation adjusted, 6.0%

Q4 2000 to Q3 2010 = 205% increase - inflation adjusted, 57.4%

overall 1973 to 2010 - 121.8%, half of which occured in last 10 years

annualised this is roughly

drumroll

2% per year - not even up to economic growth

Edited by Si1

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http://www.nationwide.co.uk/hpi/historical.htm

UK HPI

Q4 1973 to Q3 1980 = 242% increase

Q4 1980 to Q3 1990 = 244% increase

Q4 1990 to Q3 2000 = 147% increase

Q4 2000 to Q3 2010 = 205% increase

So an average of 209.5% increase over each the past 4 decades (although the first was only 7 years).

Q4 2010 to Q3 2020 = predictions anyone??

I predict that people still won't be able to correctly calculate a % increase.

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http://www.nationwide.co.uk/hpi/historical.htm

UK HPI

Q4 1973 to Q3 1980 = 242% increase

Q4 1980 to Q3 1990 = 244% increase

Q4 1990 to Q3 2000 = 147% increase

Q4 2000 to Q3 2010 = 205% increase

So an average of 209.5% increase over each the past 4 decades (although the first was only 7 years).

Q4 2010 to Q3 2020 = predictions anyone??

And inflation during those periods?

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It just takes time.

Next will come inflation, interest rate rises and fewer full time employment posts and lower house prices.

Ultimately, once prices fall enough, and enough time has passed, there will be a revulsion of the concept of property ownership that will develop. There are a lot less property porn programs on now, and those that are are mostly repeats, (we are now wall to wall cooking programs), next will come gritty 'personal interest' stories, perhaps even a gritty new genre of pop music.

There will then be a window of buying opportunity that will last for a few years, while everyone reflects on the 'crazy loose lending' era of the naughties and tells you that they would not ever buy a house again.

We would be there now if it was not for the ZIRP.

Agreed :).

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If I bought Apple shares in the 70s, they would have risen exponentionally, therefore if I buy some now will they do the same over the next 30-40 years?

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I think that many are buying now because they fear that mortgages will become far harder to come by. I even know one couple looking to buy now because she is likely to lose her job and they won't be able to borrow as much as they can now :huh:

A twisted logic I know but it seems to be quite common.

May be not so twisted. Experience has shown them that the feckless spacktards will be bailed out regardless of cost to the prudent...in fact, they may even be rewarded.

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Inflation is clearly a major factor in consumer (and house purchasers) affordability in real terms, but nevertheless, the question still stands:

Q4 2010 to Q3 2020 = predictions anyone??

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Inflation is clearly a major factor in consumer (and house purchasers) affordability in real terms, but nevertheless, the question still stands:

Q4 2010 to Q3 2020 = predictions anyone??

-ve after inflation

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Inflation is clearly a major factor in consumer (and house purchasers) affordability in real terms, but nevertheless, the question still stands:

Q4 2010 to Q3 2020 = predictions anyone??

nominal 0%

inflation-adjusted real terms, -35%, with a bottom somewhere about 2015 to 2017

reasoning: boomers downshifting and reversing the trend in the occupancy ratio, high real interest rates due to high western govt borrowing arbitrage vis-a-vis mortgage bonds

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I have to correct my earlier prediction - from 1975 to 2000 the inflation adjustyed increase was overall 40%, and by the time we get to today it is 120%

I think overall we will roll back to pre-2000 level at some point, probably later in the decade

therefore I change my prediction to possibly minor nominal falls overall by 2020

translating to inflation adjusted real terms falls of 50%, comfortably, strictly that should be 70% inflation adjusted falls, but I emphasise I doubt we will see most of us in headline prices

edit: on the other hand - this thread's chart suggests that the 70% falls will take 20 years to play out by 2030:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=153842&st=0&p=2769377entry2769377

Edited by Si1

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And inflation during those periods?

Sorry didn't see your post Si1.

Anyway, this has got me thinking... The Nationwide index has increased 1700% since 1973, so I though I'd do a bit of googling. RPI only increased 900% during this period. Average wage increased 1460%. Which would indicate property prices (relative to wage growth, and ignoring RPI) are only 15% overvalued at present?

Thinking out aloud (and way beyond my talent before Injin appears), does this imply that the problem isn't house price inflation as such, but consumer inflation being too high (and reducing peoples ability to afford housing). Does this mean that we don't have as much spare capacity as Merv would like us to believe (i.e. we don't have enough food / raw materials to go around, and the the scramble for ever reducing commodities has been happening for a while under our very noses (RPI and Average earnings diverge mid-80's).

A big leap of faith maybe. Please feel free to flame me for my ignorance (or at least deconstruct my pissed ramblings!) :D

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http://www.nationwid.../historical.htm

UK HPI

Q4 1973 to Q3 1980 = 242% increase - inflation adjusted, 3.2%

Q4 1980 to Q3 1990 = 244% increase - inflation adjusted, 28.8%

Q4 1990 to Q3 2000 = 147% increase - inflation adjusted, 6.0%

Q4 2000 to Q3 2010 = 205% increase - inflation adjusted, 57.4%

overall 1973 to 2010 - 121.8%, half of which occured in last 10 years

annualised this is roughly

drumroll

2% per year - not even up to economic growth

Stunning post, another hole ripped in the great housing con!

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“Q4 2010 to Q3 2020 = predictions anyone??”

I am neither what you define as a ‘bull’ nor a ‘bear’ . It was simply a question for you.. ahem.. superior beings…

Thank you for your responses.

We'll see...

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Sorry didn't see your post Si1.

Anyway, this has got me thinking... The Nationwide index has increased 1700% since 1973, so I though I'd do a bit of googling. RPI only increased 900% during this period. Average wage increased 1460%. Which would indicate property prices (relative to wage growth, and ignoring RPI) are only 15% overvalued at present?

Thinking out aloud (and way beyond my talent before Injin appears), does this imply that the problem isn't house price inflation as such, but consumer inflation being too high (and reducing peoples ability to afford housing). Does this mean that we don't have as much spare capacity as Merv would like us to believe (i.e. we don't have enough food / raw materials to go around, and the the scramble for ever reducing commodities has been happening for a while under our very noses (RPI and Average earnings diverge mid-80's).

A big leap of faith maybe. Please feel free to flame me for my ignorance (or at least deconstruct my pissed ramblings!) :D

what's the source for your average wage? wouldn't GDP be better since certain types of income aren't included in average wage?

great post by the way

edit: OK, found GDP data: http://www.measuringworth.com/datasets/ukgdp/result.php

109% increase inflation adjusted since 1975, compared to 120% house prices, this puts house prices as 10% overpriced compared to 1975

a very very interesting result

rather changes my previous predictions

Edited by Si1

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"Q4 2010 to Q3 2020 = predictions anyone??"

I am neither what you define as a 'bull' nor a 'bear' . It was simply a question for you.. ahem.. superior beings…

Thank you for your responses.

We'll see...

I'll tell you what - it got me thinking, I'm in split minds quite frankly!

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  • 152 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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