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marzipan

Still Think There Won't Be A Crash?

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Certainly a difference in YOY but we seem to be in much of the same position as a year ago- still waiting for that trigger.

Most people seemed to think then that sentiment when changed would bring on the crash – in my opinion they were wrong. We still need forced selling (lot’s) to bring on this crash. Back then I was hoping interest rates would be at 7% to stop inflation but it is not going to happen- I am looking at 4% on my savings with raging inflation.

If houses were to have dropped 10-20% then I think panic selling would start but I don’t think even if they did / or have dropped 20% the public would know as the VI will continually lie about it.

My hopes lie with the US for a crash now (to upset the £) – I don’t think even the job losses will be enough to start a crash – they didn’t last time it was just down to high interest rates and the fact that people could not afford there mortgages.

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I'm not too worried about inflation:

Raging inflation + static housing market = falling house prices in real terms

Give it a few years and we'll be back to the 3.5 average income multiple that is the underlying trend.

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I'm not too worried about inflation:

Raging inflation + static housing market = falling house prices in real terms

Give it a few years and we'll be back to the 3.5 average income multiple that is the underlying trend.

Yeah, but what about savings, Mr Pynchon?

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Raging inflation + static housing market = falling house prices in real terms

Not when your wages are static because your job can be done by someone in China for $0.50 an hour if you demand wage rises to keep up with price inflation. Raging price inflation + static wages == house prices collapsing as people have more important things to spend their money on than mortgage interest.

Also, don't forget: periods of high price inflation generally have high interest rates... even 10% interest rates would bankrupt most people who've bought in the last couple of years.

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Certainly a difference in YOY but we seem to be in much of the same position as a year ago- still waiting for that trigger.

Most people seemed to think then that sentiment when changed would bring on the crash – in my opinion they were wrong. We still need forced selling (lot’s) to bring on this crash. Back then I was hoping interest rates would be at 7% to stop inflation but it is not going to happen- I am looking at 4% on my savings with raging inflation.

If houses were to have dropped 10-20% then I think panic selling would start but I don’t think even if they did / or have dropped 20% the public would know as the VI will continually lie about it.

My hopes lie with the US for a crash now (to upset the £) – I don’t think even the job losses will be enough to start a crash – they didn’t last time it was just down to high interest rates and the fact that people could not afford there mortgages.

I agree totally with the first part - it needs lots of forced sellers for a crash to occur. With IRs going down if anything, this won't be the trigger and the rise in unemployment is negligble at the moment.

The US isn't going to crash in my opinion either - end result is a stagnant or very slow drift down in prices. Perpare to go grey waiting for that crash.

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Yeah, but what about savings, Mr Pynchon?

Savings? How unfashionable :)

Seriously, I think the government will soon come to realise that one of the few ways it can deflate the huge consumer debt bubble is by tolerating more inflation in the economy and thus eroding the real value of the debt mountain.

Oil prices will be the excuse, the policymakers will claim there is no point in raising UK interest rates to attempt to control imported inflation.

Wages may not rise quite as fast as inflation but in areas of high employment such as the south of England, employers will have to match inflation to keep their workers. By this stage the inflation genie will be out of the bottle, and they will be confident of passing their increased labour costs on to their customers. Cue the inflation spiral effect.

For those not on the property ladder, inflation is a good thing as long as house prices are static.

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Wages may not rise quite as fast as inflation but in areas of high employment such as the south of England, employers will have to match inflation to keep their workers.

What do you think those workers are going to do if they don't get pay rises? Threaten to quit and work for another company offering the same low wage rates? The companies will laugh and ship the jobs abroad or ship in cheap immigrants.

For those not on the property ladder, inflation is a good thing as long as house prices are static.

Price inflation is bad for everyone except the few who can buy low and sell high... which is precisely why a high-inflation policy is economic suicide.

Edited by MarkG

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I agree totally with the first part - it needs lots of forced sellers for a crash to occur. With IRs going down if anything, this won't be the trigger and the rise in unemployment is negligble at the moment.

The US isn't going to crash in my opinion either - end result is a stagnant or very slow drift down in prices. Perpare to go grey waiting for that crash.

Don't worry, IR's cannot go down any further while the US is raising its rate to a benchmark of 4.5%.

"As far as any member of the monetary police committee can go in public, they were a clear signal of his view that economists and investors had got it wrong when they predicted more interest rate cuts in the near future." Mer. King 11th Oct 2005

Sterling is already going pear shaped against the dollar because IR are already too low. Another rate cut will sink the pound even further and inflation will get way out of control - remember folks - oil is priced in dollars!

A real estate crash isn't like a stock market crash - it will take place over months or even years. Having said that, property in Manhatten has dropped 15% in the last quarter.

Edited by Pluto

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Savings? How unfashionable :)

For those not on the property ladder, inflation is a good thing as long as house prices are static.

That's the daftest thing I've heard yet. Inflation will benefit those on the property ladder as their debt will be eroded. Anyone with a deposit waiting for prices to fall will become poorer in real terms. Anyway, wage inflation isn't going to happen in the current climate of redundancies, so something will have to give, and I still believe it will be house prices due to the fact that we are reaching the point when desperate sellers who have had their property on the market for a long time will start discounting and the fact that there has been an extraordinary amount of construction of 2 bed flats in the past few years creating an oversupply at the bottom of the market.

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  • 341 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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