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bewarethebust

Bookies Predicting Crash

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All seems sensible. It's obvious houses will fall in value but I guess he has made the odds quite conservatively.

it should be a nice earner for them, lots of HPI forever morons will spunk even money on their sure fire bet. of course things always stay the same and continue forever on economics.

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Must be nice to work in an institution that is not affected by political spin or MSM moguls. There's now so much talk of a hpc everywhere from the Daily Express to the betting shops it's actually going to be a surprise if they go up.

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All seems sensible. It's obvious houses will fall in value but I guess he has made the odds quite conservatively.

it should be a nice earner for them, lots of HPI forever morons will spunk even money on their sure fire bet. of course things always stay the same and continue forever on economics.

I sometimes wonder how, for such specialist/niche types of bets, the bookies can make money?

It's such an obscure topic/thing for most people to even consider betting on that those few who do so are likely to be those who are contrarian? and thus, in this case, betting on falls happening.

Whereas those convinced of house prices continuously rising will be 'betting' by actually putting their money into property, in one way or another, and not by having a flutter with a bookie.

In other words, I would have assumed that their book will be too full of those wanting to bet on falls and not enough betting on rises. OR do the bookies also on occasion engage in activities, for publicity, akin to supermarkets putting on very short term special offers that don't actually turn a profit ('loss leaders') ?

Edited by anonguest

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I just don't think there's any way they can go up from where they are now- not sure how keen my girlfriend would be on us putting out deposit on prices going down at 8/13 though!

Either way the more press house price falls get, the quicker it could actually happen... so I can stop burning money on rent!

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It's a boutique gambling shop - they take large bets on things that other bookies won't take bets on, and those that appeal to city types.

I understand that. And that is exactly my point. Those inclined to bet with them will surely be likely be betting on falls. Wheras as those similarly rich types who disagree will put their money actually into property? So the 'book' will be quickly to heavily loaded to one side - something bookies don't like?

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I understand that. And that is exactly my point. Those inclined to bet with them will surely be likely be betting on falls. Wheras as those similarly rich types who disagree will put their money actually into property? So the 'book' will be quickly to heavily loaded to one side - something bookies don't like?

The bookmakers will want to have a balanced cover. The initial odds are there to get punters interested. Once their potential loss goes above some threshold the bookmakers will change the odds to get their potential loss under control. The bookmaker isn't really that interested in the actual odds of the event (beyond initial pricing) - they're mainly interested in ensuring that they get balanced betting on either side so that they can make their profit on the spread no matter what the outcome.

[this is why you can't look at bookmakers odds to indicate the actual odds of an event - if the punters are biased one way or another then the bookmakers must offer odds that reflect that bias - no matter what the bookmakers' (or anyone else's) analysis indicates what the odds of the event occurring are]

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The bookmakers will want to have a balanced cover. The initial odds are there to get punters interested. Once their potential loss goes above some threshold the bookmakers will change the odds to get their potential loss under control. The bookmaker isn't really that interested in the actual odds of the event (beyond initial pricing) - they're mainly interested in ensuring that they get balanced betting on either side so that they can make their profit on the spread no matter what the outcome.

[this is why you can't look at bookmakers odds to indicate the actual odds of an event - if the punters are biased one way or another then the bookmakers must offer odds that reflect that bias - no matter what the bookmakers' (or anyone else's) analysis indicates what the odds of the event occurring are]

Makes sense.......the bookie always wins.

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its funny that taking a rational view of the market based on careful research could cause so much shock and consternation.

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its funny that taking a rational view of the market based on careful research could cause so much shock and consternation.

I suppose at least with a market like this there's loads of data available... history of house pricing month by month going back decades (like "form" on horses?), plenty of predictions available (like "tipsters" on horses?) and yeah I suppose if they took thousands of pounds they could make their odds on a fall shorter, and on a rise bigger.

If they were the other way round, like 5/4 (put £4 on to return £9, including stake) I would put it on my accumulators at Cheltenham but I don't like odds-on. 8/13 probably is buying money though

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I understand that. And that is exactly my point. Those inclined to bet with them will surely be likely be betting on falls. Wheras as those similarly rich types who disagree will put their money actually into property? So the 'book' will be quickly to heavily loaded to one side - something bookies don't like?

Boutique ones take more risk. The mass market ones try to hedge their positions more, but still take some risk.

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His mistake is to have the value based on GBP. Currency softening = prices can go down in real terms but up in pounds - he loses.

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His mistake is to have the value based on GBP. Currency softening = prices can go down in real terms but up in pounds - he loses.

Do first time buyers care less about "real terms allowing for currency swings... or are they just like drivers who care what the cost of petrol at the pump per litre is? Quite how much that house or car would cost to a foreigner with a different currency is immaterial? Is to me anyway

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His mistake is to have the value based on GBP. Currency softening = prices can go down in real terms but up in pounds - he loses.

He doesn't care about such things. He's seen an opportunity where people are interested in taking both sides of the bet, and he's wangled the necessary publicity. He'll take his profits from the spread, not from the direction things turn in. Currencies etc are a nuance that he doesn't need to worry about.

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