Bruce Banner Posted July 10, 2011 Share Posted July 10, 2011 Dont take this the wrong way, those who lived through it (I did but not that I can remeber it) are using you own example. The chart I posted up on the last page wasent made up numbers, these are the real figures and although I'm sure there are plenty of horro stories for individual people the over all figures show the flaa were small but inflation took a massive chunk out. People seem ti ignore the figures, but the fact is actual house prices fell very little Sorry, you are wrong. http://www.housepricecrash.co.uk/forum/index.php?showtopic=166381&view=findpost&p=3049959 Quote Link to comment Share on other sites More sharing options...
Dorkins Posted July 10, 2011 Share Posted July 10, 2011 Not may people realise that the 90s crash would be the perfct type of senario for most people, house prices stay the same and inflation and wage growth even 2-3% each year will work well for everyone House prices are double what they should be relative to wages, more in London/SE. If the gap between wages and house prices closes at 2-3% a year, that's a 25-40 year correction. Not really a perfect scenario for most people. Quote Link to comment Share on other sites More sharing options...
FIGGY Posted July 10, 2011 Share Posted July 10, 2011 Sorry, you are wrong. http://www.housepricecrash.co.uk/forum/index.php?showtopic=166381&view=findpost&p=3049959 Ok you can can link to there all day long but it wont change the fact that those numbers are altered for inflation, the point of the graph was to show that, just like the 90s, we may not see the reduction in house prices, we may just feel ti via inflation. Those nationwide figures are inflation adjusted and that wasent the point I was making. Quote Link to comment Share on other sites More sharing options...
zebbedee Posted July 10, 2011 Share Posted July 10, 2011 I'm starting to think we wont get a crash, we will get people accepting their houses wont gain in value and if they have a brain they will understand that inflation will erode their asset value but just like in the 90s house prices wont come down, I guess they will stay at c 2004 prices (actual) and inflation will erode them from there. Not may people realise that the 90s crash would be the perfct type of senario for most people, house prices stay the same and inflation and wage growth even 2-3% each year will work well for everyone The trouble with that is we are getting the inflation as our currencies depreciate (intentionally) but there is not and will not be wage growth. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted July 10, 2011 Share Posted July 10, 2011 Ok you can can link to there all day long but it wont change the fact that those numbers are altered for inflation, the point of the graph was to show that, just like the 90s, we may not see the reduction in house prices, we may just feel ti via inflation. Those nationwide figures are inflation adjusted and that wasent the point I was making. Jesus wept, it's like arguing with a brick wall . The Nationwide calculator is not inflation adjusted. You can dispute their figures, but the fact remains that they show a 29.66% nominal fall in house prices, in Greater London, between 1989 and 1994. Why do you think so many people were in negative equity in the early 90s? Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted July 11, 2011 Share Posted July 11, 2011 more of a case of 'lack of interest in being chained to a shitbox gathering speed' Quote Link to comment Share on other sites More sharing options...
ingermany Posted July 11, 2011 Share Posted July 11, 2011 House prices are double what they should be relative to wages, more in London/SE. If the gap between wages and house prices closes at 2-3% a year, that's a 25-40 year correction. Not really a perfect scenario for most people. And prices can only be kept where they are by gargantuan government subsidies. Take away the government funded props and prices will collapse even faster. They can't go on racking up a larger deficit in order to pay people to buy houses they can't afford. Quote Link to comment Share on other sites More sharing options...
D179 Posted July 11, 2011 Share Posted July 11, 2011 I have said before, but how can we predict what will happen by looking back at only one snapshot in the past? is it sensible to look at the 1990's and compare what happened then and say well thats the norm it will happen again. Of course not, what makes the 90's crash 'the norm'. There are so many variables to consider that it is just to simple a view to compare. Also the whole thing on lending multiples etc is a dead end, again what makes historic lending mulitples the norm? At best you can make an informed judgement on what you think based on historic data, but that is different to being correct on the outcome. This has been proved by the propping of the market thus far. it is so obvious now that inflation has been chosen, we just are not going to see the massive falls that should have happened with such low IR. In my humble opinion. Quote Link to comment Share on other sites More sharing options...
FIGGY Posted July 11, 2011 Share Posted July 11, 2011 Jesus wept, it's like arguing with a brick wall . The Nationwide calculator is not inflation adjusted. You can dispute their figures, but the fact remains that they show a 29.66% nominal fall in house prices, in Greater London, between 1989 and 1994. Why do you think so many people were in negative equity in the early 90s? Ah well in that case I hold my hads up as wrong, I thought they were inflation adjusted otherwise its a pointless figure in their calculator. An avergae 15% fall would still have left people in neg equity, but I take your point, if it was a large number then I was wrong. However the chart I posed up comes from the nationwide figures, so should yield the same results as their calculator. All I was trying to point out was people are unhappy about not seeing massive drops but that there is a history of not seeing huge (nominal) fall as inflation has done all the work in the past (if you belive the graph). Not saying histroy always repeat itself, rather that we should look at it for some indicators as to the future. Somtimes you really get a hard time for not towing the line... Quote Link to comment Share on other sites More sharing options...
Riedquat Posted July 11, 2011 Share Posted July 11, 2011 I have said before, but how can we predict what will happen by looking back at only one snapshot in the past? is it sensible to look at the 1990's and compare what happened then and say well thats the norm it will happen again. Of course not, what makes the 90's crash 'the norm'. There are so many variables to consider that it is just to simple a view to compare. Also the whole thing on lending multiples etc is a dead end, again what makes historic lending mulitples the norm? At best you can make an informed judgement on what you think based on historic data, but that is different to being correct on the outcome. This has been proved by the propping of the market thus far. it is so obvious now that inflation has been chosen, we just are not going to see the massive falls that should have happened with such low IR. In my humble opinion. Yes, you can't completely rely on things happening again simply because they've done so every time in the past but the odds are rather high, wouldn't you say? The only difference this time is how much stupid effort has gone into keeping the bubble inflated. Quote Link to comment Share on other sites More sharing options...
zebbedee Posted July 11, 2011 Share Posted July 11, 2011 I keep posting this but York available for sale £70-170, 2 or more beds, non retirement houses only. Theres pent up supply in thos numbers if you ask me. And I'll only part with other assets when the farking sellers realise the games up. New Bitmap Image.bmp New Bitmap Image.bmp Quote Link to comment Share on other sites More sharing options...
D179 Posted July 11, 2011 Share Posted July 11, 2011 Yes, you can't completely rely on things happening again simply because they've done so every time in the past but the odds are rather high, wouldn't you say? The only difference this time is how much stupid effort has gone into keeping the bubble inflated. but there has been some correction both nominal and real, as before. the one major thing this time is not just UK policy but worldwode policy due to increased globalisation, somehting that did not happen in the 1990's. I do think prices will decrease slightly but inflation is doing the real work. It is unfair those with debt up to the eyeballs have been bailed out, but maybe the rest of us should have been braver and had a more carefree attitude years ago! An example of this is that over the priod I was renting, nearly three years just prior to crash up to March of this year, a friend of mine managed to sell a place he purchased pre-cras as a rennovation, hold on ti it, clear £40k profit. He also is just finishing a project of a place where he will clear £200k. All that time I was bleating but how the wheels would come off, maybe he should sit tight etc, and now I look a right d**k! I just think waiting for asking prices to come crashing down is a dangerous game, the best of both worls can be had by offering on places at a price that is reasonable. Lets face it, many on here now with hindsight would have brought a few years ago when the crash actually happened. Quote Link to comment Share on other sites More sharing options...
D179 Posted July 11, 2011 Share Posted July 11, 2011 All anecdotal. I can tell you about a few people I know who over leveraged themselves when house prices could only ever go up in Northern Ireland. 2 are now bankrupt and another is in a mental health ward. I can't say that any of the canny developers over in NI who have lost everything they owned are rejoicing either. Please read this thread about what happens when HPI turns into HPC on a massive scale- 49% and still falling. Thread is 38 pages long but read the last 5 pages to see the linked reports of the wheels coming off the HPI train. http://www.housepricecrash.co.uk/forum/index.php?showtopic=65870 Nothing anecdotal about the bankruptcies and personal insolvencies. We can all pull successful or unsuccessful stories out of the mist but linked stories tell the whole story. And we can all pull linked storys to support our view. My point being is that no matter how much things should change, and in certain ares they are, we must also keep our eyes open to the reailty of the situation and not just the wishful thinking side or by pinpointing one point in history as the beacon of things to come. It may do but the longer this plays out I cannot be the only person thinking that it may not! It just seems obvious now that they will do anything to support the mess created. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted July 11, 2011 Share Posted July 11, 2011 And we can all pull linked storys to support our view. My point being is that no matter how much things should change, and in certain ares they are, we must also keep our eyes open to the reailty of the situation and not just the wishful thinking side or by pinpointing one point in history as the beacon of things to come. It may do but the longer this plays out I cannot be the only person thinking that it may not! It just seems obvious now that they will do anything to support the mess created. To do otherwise would be foolish. The beauty of holding liquid funds is that you can turn on a sixpence. If it looks like it's time to buy, I could complete within a week of a decision. Quote Link to comment Share on other sites More sharing options...
NEO72 Posted July 11, 2011 Share Posted July 11, 2011 I do think prices will decrease slightly but inflation is doing the real work. I agree but not in the way you think. Cost inflation without wage inflation is doing the work in that it makes it more difficult to service mortgage debt and therefore increases the likelihood of forced sales and nominal falls. There seem quite a few who have trouble differentiating between the two types of inflation. The nineties crash was a pussy nominally speaking (IIRC around 12-13% drop on average), as wages (which kept up with price inflation) rose to match house prices. Now, we have negligible wage inflation due to a number of factors including lack of employment, globalisation, weakened unions and imported labour, and since wages aren't rising to meet house prices then house prices must fall to meet wages. My point being is that no matter how much things should change, and in certain ares they are, we must also keep our eyes open to the reailty of the situation and not just the wishful thinking side or by pinpointing one point in history as the beacon of things to come. Can you suggest any previous bubbles, housing or otherwise, that haven't burst? It just seems obvious now that they will do anything to support the mess created. Ask yourself what is the most they could do to prop things up? Now ask yourself what are they actually doing? You'll find these are two very different answers. Quote Link to comment Share on other sites More sharing options...
D179 Posted July 11, 2011 Share Posted July 11, 2011 I agree but not in the way you think. Cost inflation without wage inflation is doing the work in that it makes it more difficult to service mortgage debt and therefore increases the likelihood of forced sales and nominal falls. There seem quite a few who have trouble differentiating between the two types of inflation. The nineties crash was a pussy nominally speaking (IIRC around 12-13% drop on average), as wages (which kept up with price inflation) rose to match house prices. Now, we have negligible wage inflation due to a number of factors including lack of employment, globalisation, weakened unions and imported labour, and since wages aren't rising to meet house prices then house prices must fall to meet wages. Can you suggest any previous bubbles, housing or otherwise, that haven't burst? Ask yourself what is the most they could do to prop things up? Now ask yourself what are they actually doing? You'll find these are two very different answers. In respect of wage inflation, personally i think it has started to happen recently. in respect of previous bubbles vs this one, well you could argue that is has burt but not as severe as we all beleived it would. As for propping up, I see holding IR as long as possible is doing the trick. I agree they will go up and I agree prices will come down. I just do not agree with half the people on here who beleive they will wake up tomorrow and find all asking prices in their area have dropped by 20,30 or 40% thats all! Nobody thought that a soft landing was possible, nor did I, but three years on and that is what has happened. Quote Link to comment Share on other sites More sharing options...
rentforlife Posted July 11, 2011 Share Posted July 11, 2011 yep and there is going to little wage inflation this time. Agreed. I am tired of hearing 2011 being compared to the early 90s. Facts are that things are very different. People were paying in excess of 15% - BoE has made it very clear over and over again, that they do not support interest rate rises anytime soon. Early 90s had a surplus of housing available & significantly higher volumes of social housing available. Today, we have a demand for housing which outstrips supply. This will be close to a lot of HPCers hearts because we are feeling the pain through rental rises. I live in South East - we are seeing house rises not decreases. http://www.housepricecrash.co.uk/forum/index.php?showtopic=166160 Quote Link to comment Share on other sites More sharing options...
miko Posted July 11, 2011 Share Posted July 11, 2011 Dont take this the wrong way, those who lived through it (I did but not that I can remeber it) are using you own example. The chart I posted up on the last page wasent made up numbers, these are the real figures and although I'm sure there are plenty of individual horror stories, the over all figures show the falls were small but inflation took a massive chunk out. People seem to ignore the figures, but the fact is actual house prices fell very little No sorry you are wrong . The chart you posted is wrong. There were plenty of individual horror stories but they all added up to property falling across the board . The exception was when a property did not fall the rule was that most did. Remember reading a story in the paper that someone had bought a flat in Islington in 1988 and sold it in 1993 for a very small profit . The fact that they had sold for a small profit was the reason the story was in the paper , as it was so unusual . The term Negative Equity was coined during that crash as so many people had mortgages bigger than the value of the property and Negative Equity sounded better and was shorter to say than " the mortgage is bigger than the value of the property ". Quote Link to comment Share on other sites More sharing options...
scrappycocco Posted July 11, 2011 Share Posted July 11, 2011 How long do I have to wait, I'm starting to lose my mind (see sig). I'm 7 months into another tenancy, interest rates haven't changed, proper cuts haven't been made and people still seem to be pulling money off trees to buy properties. I just want a realistically priced house close to a tube so I can stop with all the car travel and renting malarky. I've got gold, nsi gilts, isa, 3% ir savings account and some other stuff so hopefully I'm not being completely shafted by inflation but if there's no sign of a crumble in a year I'm getting off the hpc train. Quote Link to comment Share on other sites More sharing options...
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