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The Masked Tulip

Leading Article: Lower Does Not Mean Worse

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In any case modestly falling house prices are only a problem if we predicate our view of the economy on the interests of the older generation who have large amounts of equity tied up in their homes.

"Modestly" falling. But what will happen if they fall off a cliff?

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"Modestly" falling. But what will happen if they fall off a cliff?

Herein lies the problem. There's enough in place for modest falls, but realistically what is going to push them off a cliff? IRs will stay low, unemployment isn't rocketing, the job cuts aren't as bad as feared. Sellers on the whole seem prepared to sit this out, without wanting to acknowledge that banks aren't lending the levels like they used to in order to support peak prices.

The HPC is in stealth mode, going on beneath the radar. Ina few years time prices will be marginally lower in nominal terms but 20% down in real terms. This will allow sheeple the face-saving delusion that they didn't lose money on their 'investment'. Transaction volumes will still be at historically low levels. This will result in there being less EAs around (hip hip hooray) and the madness that was property speculation will be long over. People who have sat rather than sold will come to see their property as a home.

That's my €0.0238759 worth.

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Herein lies the problem. There's enough in place for modest falls, but realistically what is going to push them off a cliff? IRs will stay low, unemployment isn't rocketing, the job cuts aren't as bad as feared. Sellers on the whole seem prepared to sit this out, without wanting to acknowledge that banks aren't lending the levels like they used to in order to support peak prices.

The HPC is in stealth mode, going on beneath the radar. Ina few years time prices will be marginally lower in nominal terms but 20% down in real terms. This will allow sheeple the face-saving delusion that they didn't lose money on their 'investment'. Transaction volumes will still be at historically low levels. This will result in there being less EAs around (hip hip hooray) and the madness that was property speculation will be long over. People who have sat rather than sold will come to see their property as a home.

That's my €0.0238759 worth.

Good summary, worth every €. This is why I have bought with a small net mortgage and changed status to neither. Only a rise in IRs can cause any significant price drops in nominal terms now. That would require a new financial crisis but since that could still be years away, I just couldn't wait any longer.

The next generation with no equity look stuffed.

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  • 276 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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