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29929BlackTuesday

Obvious But Important Point.....

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..."ah well even if houses do drop 50% they've already gone up 100% so we're still quids in!"

I reply that my 50% drop is the SAME figure in actual £s as their 100% rise.

I know it's obvious but so many people I mention this too are amazed and almost don't believe it!

1) Buy house for £50,000

2)It's value goes up 100% to £100,000

3) It's value then drops by 'only' 50% to......

£50,000!!

Good eh?

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Interesting that it works the other way around as well – if we are 50% overvalued relative to earnings it would only take a 33% fall to restore the balance, and spread over 5 years at 4% earnings growth this reduces to a 19% nominal fall. ;)

Edited by spline

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  • 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%



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