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The Masked Tulip

Friday Five: Reasons Why House Prices Haven't Corrected Yet

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So there you have it. Some baffling conundrums and the reason why a number of the things we think are good for the housing market VIs such as builders etc are actually, in the long term, bad for our wallets.

Bit added for clarity.

It's an interesting read but apart from low interest rates it really barely touches the link's claimed purpose of giving "reasons why house prices haven't corrected yet!

Edited by billybong

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It hasn't corrected to the affordable levels seen in 1995 but we did start from a much higher point in 2007. Overall the size of this crash against 1989-95 is very similar already......... -35.6% real in the last crash to 1995 and about -34% to the nadir in September 2012. Whether the present bounce fizzles out and we have a bigger crash than last time remains to be seen.

A bit of a London-centric article because in the North it feels like we have had the Mother of all Crashes already, certainly worse than 1989-95 (whence the south was worse hit).

Edited by crashmonitor

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It hasn't corrected to the affordable levels seen in 1995 but we did start from a much higher point in 2007. Overall the size of this crash against 1989-95 is very similar already......... -35.6% real in the last crash to 1995 and about -34% to the nadir in September 2012. Whether the present bounce fizzles out and we have a bigger crash than last time remains to be seen.

A bit of a London-centric article because in the North it feels like we have had the Mother of all Crashes already, certainly worse than 1989-95 (whence the south was worse hit).

nice post, succinct if I may say so

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All 5 reasons are post-2008.

It doesn't explain why house prices were rising prior to QE or historically low interest rates.

....because before 2008 they were throwing people as much money as they wanted at any price to all and sundry, with an income or no income, why should they care about what the interest rate was when either that was all they were paying or they were doing it up and flipping is as fast as they could on to the next taking on more temporary high cost debt, pushing prices higher......they only started holding when the cost of holding came right down to the levels we have today. ;)

Edited by winkie

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  • 239 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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