Jump to content
House Price Crash Forum
Sign in to follow this  
chevin

Frrr Frrr Frrr Frrr Frrr Frrr Ssssssssssssssss …….. Frrr Frrr

Recommended Posts

House prices shouldn’t be governed by affordability, but when decent housing is in short supply, it will become the biggest factor.

The IR norm is usually high when IRs fluctuate severely over a given period, caused by localised fiddling of a captive currency. With Sterling pegged here there and everywhere and foreign money becoming more easily available, Sterling can no longer go out on a limb. IR’s will become more stable and consequentially occupy a slightly lower trend. Buying power will increase through the greater affordability that lower IRs bring. No, it doesn’t double as IRs halve but it does increase by 10% for every 1% drop in the IR.

Now; when we exit this HPI wobble, the lower IR trend will cause a ‘permanent’ shift in the HPI trend relative to the difference. House prices won’t fall below the HPI trend. There will be a surprisingly quick rebound from a not so big crash, because for every bankrupt person there is an ever growing no. of people waiting to pounce. Most are on this forum, in fact.

Mark my words. You heard it here first! Oh, I can’t wait. I can picture it now: I told you so…..I told you so………..I told you so. I could live off the back of this for years. I could write a book. I could be on TV. I would become a celebrity!

Yours, in permanent denial

Chevin

Share this post


Link to post
Share on other sites

Please. You have already started a thread yesterday to this effect http://www.housepricecrash.co.uk/forum/ind...topic=18109&hl=

There is nothing worse on this board than continued multiple postings by someone of their ill explained opinions which are deliberately designed to be inflamatory. Close to trolling in fact.

Respond to the comments on your existing thread if you wish just stop the repeated posts. It clogs up the board PG style.

Share this post


Link to post
Share on other sites

House prices shouldn’t be governed by affordability, but when decent housing is in short supply, it will become the biggest factor.

The IR norm is usually high when IRs fluctuate severely over a given period, caused by localised fiddling of a captive currency. With Sterling pegged here there and everywhere and foreign money becoming more easily available, Sterling can no longer go out on a limb. IR’s will become more stable and consequentially occupy a slightly lower trend. Buying power will increase through the greater affordability that lower IRs bring. No, it doesn’t double as IRs halve but it does increase by 10% for every 1% drop in the IR.

Now; when we exit this HPI wobble, the lower IR trend will cause a ‘permanent’ shift in the HPI trend relative to the difference. House prices won’t fall below the HPI trend. There will be a surprisingly quick rebound from a not so big crash, because for every bankrupt person there is an ever growing no. of people waiting to pounce. Most are on this forum, in fact.

Mark my words. You heard it here first! Oh, I can’t wait. I can picture it now: I told you so…..I told you so………..I told you so. I could live off the back of this for years. I could write a book. I could be on TV. I would become a celebrity!

Yours, in permanent denial

Chevin

I drive through a new build estate to see my girlfriend..

lights are out... no curtains.. been unsold for years some..

more.. many more going up..

The supply is there.. but affordability does fool too many... the "Oh look.. interst rates are lower.. so I can borrow much more.. over 25 years.. on a variable rate.."

Share this post


Link to post
Share on other sites

spoilsport

do you treat all new users like that? There was no direct question on the other thread, so I offered an alternative perspective in this new thread.

Charged with being a blogger and troll! You don't make friends easily do you? Next you'll be telling 'oh we discussed this some weeks ago' in a 'why aren't you clairvoyant, I police the forum' type of pontificating way.

Share this post


Link to post
Share on other sites

spoilsport

do you treat all new users like that? There was no direct question on the other thread, so I offered an alternative perspective in this new thread.

Charged with being a blogger and troll! You don't make friends easily do you? Next you'll be telling 'oh we discussed this some weeks ago' in a 'why aren't you clairvoyant, I police the forum' type of pontificating way.

He's right though, although there was no direct question on the other post, there was good multiple debate which covers the essense of this post and more. I dont understand the thread title either? It was actually a decent post that you made on the other thread, there is no need to repeat it here under a silly title.

Share this post


Link to post
Share on other sites

Yes, agree that the average house price, in the absence of a ‘bubble’ dynamic, would vary by about 10% for a 1% step in current interest rates, and so we might expect the recent 0.25% drop to lift the baseline and hence the exit (or post-crash) p/e by about 2.5% - in other words, reduce the size of the fall from the 2004 (or 2005?) peak down to the post-crash trough expected around 2009.

But this idea is not really all that new: for example, it was recently used by Stephen Nickell to argue for a smaller ‘bubble’ than might otherwise be inferred from the current price-to-earnings ratio, and has even been explored in some numerical detail here on HPC. It is important because it corrects a naive bear argument (expect p/e to repeat the 1989-1995 cycle, hence a big crash) to account for the effects of affordability (prices rise inversely to IRs at *constant* repayment-to-eanings ratio). The corrected argument still predicts a 'crash', but one smaller than expected, and even allows for a 'soft landing' if IRs were to drop to just over about 3% (but unlikely due to inflation pressures).

Edit: pity about the thread title ;)

Edited by spline

Share this post


Link to post
Share on other sites

ok. Maybe was a little intolerant! Just took a diffcult call at work (my excuse). I hate the thread police generally - just thought I should warn you of the likely reaction from others when people repeatedly do that.

What does the title mean?

Share this post


Link to post
Share on other sites

Recessions lead to crashes and unemployment - fact.

Would there be lots of people ready to pounce if they don't have jobs anymore?

I'm under no illusion to the fact that with a crash/collapse of UK PLC could leave me out of a job with just my savings.

A bit hard to pounce with my deposit when I have no job to go to, ergo no income to pay a mortgage.

As I've said many many times, I'd take my chances with a crash - because things sure as hell are no good to me as they are.

Share this post


Link to post
Share on other sites

Recessions lead to crashes and unemployment - fact.

Would there be lots of people ready to pounce if they don't have jobs anymore?

I'm under no illusion to the fact that with a crash/collapse of UK PLC could leave me out of a job with just my savings.

A bit hard to pounce with my deposit when I have no job to go to, ergo no income to pay a mortgage.

As I've said many many times, I'd take my chances with a crash - because things sure as hell are no good to me as they are.

Ditto

Share this post


Link to post
Share on other sites

ok. Maybe was a little intolerant! Just took a diffcult call at work (my excuse). I hate the thread police generally - just thought I should warn you of the likely reaction from others when people repeatedly do that.

What does the title mean?

it was to link it to my previous thread. frrr frrr frrr being the inflation of a balloon (bubble) sssssss being a release of it followed by a small pause and finally a quicker than anticipated reinflation.

very poor I know.

ok. Maybe was a little intolerant! Just took a diffcult call at work (my excuse). I hate the thread police generally - just thought I should warn you of the likely reaction from others when people repeatedly do that.

What does the title mean?

thanks for the tip .....really!

the frr frr is the inflation of a bubble, ssssssssss (rather than BANG) is the relase of air and frrr a quicker than expected reinflation

Recessions lead to crashes and unemployment - fact.

Would there be lots of people ready to pounce if they don't have jobs anymore?

I'm under no illusion to the fact that with a crash/collapse of UK PLC could leave me out of a job with just my savings.

A bit hard to pounce with my deposit when I have no job to go to, ergo no income to pay a mortgage.

As I've said many many times, I'd take my chances with a crash - because things sure as hell are no good to me as they are.

Share this post


Link to post
Share on other sites

Frrr Frrr Frrr = inflating the bubble

Ssssssssss = slooow deflation

.... = apply stick plaster

Frrr Frrr = reinflation ...

Nice one! :lol::lol::lol:

Thrrwwrrrwwrrww .... splat!

Edited by spline

Share this post


Link to post
Share on other sites

Frrr Frrr Frrr = inflating the bubble

Ssssssssss = slooow deflation

.... = apply stick plaster

Frrr Frrr = reinflation ...

Nice one! :lol::lol::lol:

Thrrwwrrrwwrrww .... splat!

so how do you do a big sharp lod pop/bang in that language?

I'm still holding to it...and I KNOW the cover story!!!

...and it's IRAN!!!!.......sounds surreal? think again.

those who have read my posts already know I wholeheartedly believe in the prophecies of nostradamus and ill things afoot next year as described in the torah.

would make a fairly nice backdrop for "burying bad news" would it not?

...if you doubt me,listen to the news of late......the iranian president spouting off about wiping israel off the map.

this is brewing into a big one!!!!.,.....it will kick off for sure!

...but that's ok.I have a nice stash of krugerrands ready to pounce when property hits the deck and paper money here is worthless(in international terms)

...I will be buying my next house with a couple of those if what I fear is on the cards does materialise(MARCH 2006....LISTEN UP!!!....IF MY DECYPHERING IS RIGHT THERE IS ANOTHER TERRORIST ATTACK ON THE CARDS.....WMD STYLE.don't know whether its america or israel....tel aviv does get mentioned.But if this happens the whole region blows!)

Share this post


Link to post
Share on other sites

But low rates imply low inflation. How are your repayments going to be inflated away? Where will your extra savings come from to pay for retirement? Are you saying there will be continued high wage inflation but no "real" inflation? If food, taxes and fuel are counted, actual inflation is about 6%, so at the moment we have negative real rates. Are you implying that this is a situation that will stay with us for some time to come? If so, how?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.