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When People Say "buy Before It's Too Late" - Doesn't "too Late" Mean A Ponzi Collapse?

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I never understood this phrase.

If it ever becomes too late, it means FTBs will dry up (because they're "too late", duh!). The ponzi scheme relies on FTBs. So surely the "too late" period heralds a price crash, in which case, those who got in just that but too early are the losers.

"Too early to buy" is a phrase that makes a lot more sense.

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An alternative perspective is that the monetary base could be expanded at a sufficiently rapid rate to support indefinite nominal rises of any valid collateral - including houses.

From this, alternate, perspective one could leave it "too late" to buy a house by failing to capture a relatively low nominal purchase price while one still has adequate years of earning potential (of exponentially increasing sums) to pay down the debt arising from a huge (but fixed nominal price) purchase.

This is what makes the current situation so divisive - there are no absolute answers. One needs to weigh up if one believes that credit markets will remain in an unsustainable bubble for 10, 20 or 30 years - and if one's future earning potential looks sufficiently bright to justify current asset prices. One needs to anticipate if interest rates will ever return to 'normal' (say 4% to 8%) - while simultaneously predicting earnings prospects spanning decades into the future - in a stagnant global economy with deflation looming.

For decades, reckless buyers have been baled-out by high inflation and loosening credit standards. One has to wonder, today, how-long one expects this situation to go on.

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A.Steve i agree fully.

Houses will always be bought with a deposit. That deposit is in danger of eroding away.
So the simple thing to do is keep your deposit spread over cash, bonds, shares, gold.

Whatever the future holds you will still be able to buy a house.

Staking your future income will secure a house, as your income should still retain some value if your in sufficient demand.

I don't think it is different this time, i think the bubble will burst in shares and housing. If they don't then we are already watching play out our very own economic collapse and we have been watching for a few years already.

we could be slow boiling frogs, especially those with large cash deposits. If assets trend to infinity then cash becomes worthless.

Whatever happens if your hedged your ok.

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Where it fails is the lack of jobs, each subsequent generation has to deal with ever fewer lower paid, less secure jobs. People will also come to ever more imaginative ways to not pay be it renting a room or living in a caravan we have reached a critical point where many people simply cannot afford rent or a mortgage and human ingenuity is always surprising. We are on a long downward wind to zero so if you happen to have a big house and expect to sell it and walk off with your gains your probably on an ever reducing time line. I am already seeing big reductions on the high end stuff.

I think when this crash happens it will never recover but thats just my opinion and what I am preparing for.

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FOMO

It's a bog standard sales technique.

It does work.

If you tell your dog it's the last time of pedigre chum in the house it'll believe you and scoff it down. Same principle.

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I never understood this phrase.

If it ever becomes too late, it means FTBs will dry up (because they're "too late", duh!). The ponzi scheme relies on FTBs. So surely the "too late" period heralds a price crash, in which case, those who got in just that but too early are the losers.

"Too early to buy" is a phrase that makes a lot more sense.

My parents were trying to convince me to get a mortgage for a place in Aberdeen. I have convinced them that it would be madness to even think about that this side of late 2017 at the very earliest.

I'm not going to catch somebody else's falling knife.

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It doesn't mean buy before the coming crash, it means buy before you can't afford to because prices always go up.

I never understood this phrase.

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Whatever the future holds you will still be able to buy a house.

Maybe. I think its more accurate to say that whatever the future holds, people will live in the houses you see every day. Will they be paying a mortgage every month to do it, or rent? Does it matter that much? Tenants rights make renting less attractive to some, the immobile nature of 'owning' makes that option less attractive to others.

What will happen is time will pass, owners will die off, landlords will be put out of business by government policy aimed at a voting demographic and those same politicians will also make renting less of an ordeal.

The fad for 'ownership' won't last forever, ideas about these things change. To me its just not worth the gamble of a lifetimes income to buy when it all looks so crazy. What do you get, in the end? More rights than a tenant, with more obligations. Its not much of a prize for a life of toil and sacrifice. Haven't we got better things to do?

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What do you get, in the end?

The big one is no housing expenditure in old age and leaving at least a little something behind for family. Or at least it used to be before diamond encrusted floor boards and Ming cupboard doors to be paid for beyond the reaper....... That is what folk get now for there £hundreds of thousands? Isn't it?

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The big one is no housing expenditure in old age and leaving at least a little something behind for family. Or at least it used to be before diamond encrusted floor boards and Ming cupboard doors to be paid for beyond the reaper....... That is what folk get now for there £hundreds of thousands? Isn't it?

So, you borrow more than necessary to pay over the odds to service interest upon high debt, to worry about doing so, all the while paying to maintain the asset, just to live free if you make it to old age.

Alternatively, rent and live debt free, save the money you'd have spent servicing the debt to build up a reserve, and continue to rent if you live into old age, just for your plans to be screwed by those who took the path above.

Majority rule

(but seeing as you never know what tomorrow brings, I still prefer the second option)

Edited by LiveinHope

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When you rent you can't have pets, you can't put up pictures, you can't paint the walls, you can't change the carpet, you're stuck with the landlord's el cheapo white goods, and you're probably tripping over their lopsided end table and sitting on their twenty year old couch.

When you rent, you may well not know when someone might come round for an 'inspection' or a gas check. In London, you're probably living with strangers and you may well have a cleaner or other service come into your private space while you're out.

In the UK, buying means freedom. You can lock your door and do what you like in your own space. Rentals do not provide that, and for some personality types no amount of freedom to globetrot will make up for that.

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As for the topic, it comes down to whether the housing market is a pyramid scheme requiring new entrants, or whether it's a reversion to feudalism, where those who secured property wealth will happily swap it between themselves until the end of time.

Without more borrowing entering the system house price rises might grind to a halt, but the new lords may well simply revert to charging rent as the main way to build their wealth. Isn't this what is already happening? So if you missed the brief window of history where we actually lived in something approaching a fair society, you might well have missed the boat forever.

Not sure what I believe.

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FOMO

It's a bog standard sales technique.

It does work.

If you tell your dog it's the last time of pedigre chum in the house it'll believe you and scoff it down. Same principle.

+1

Bankrupt stores still use the self same techniques right up to the time that the stores shut their doors for good and the employees register on the dole.

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I never understood the 'don't miss the boat', 'buy before it's too late' phases either. Rings too much of ponzi to me.

I suppose, if I throw a differing view out there, it could have came from, 'buy before you are too old to get a mortgage'. But even this doesn't make sense, as if you save and invest you should be looking to pay cash for a house in older age?

That means it can only be about missing the HPI boat! Damn, I think I may have missed that already! :P

Edit:spelling

Edited by renting til I die

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FOMO

It's a bog standard sales technique.

It does work.

If you tell your dog it's the last time of pedigre chum in the house it'll believe you and scoff it down. Same principle.

If I told my dog don't worry we have 1000 tins left of pedigree chum. He'd scoff it anyway :lol:

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The big one is no housing expenditure in old age and leaving at least a little something behind for family.

When the below 40s get to old age something will have to be done about that. It will be everyones problem. If an income past working age won't pay for a roof, whats going to happen? Everyone living in the streets next to empty houses? The powers that be got us all into this mess, they'll have to sort it out when the time comes.

As for leaving something behind, it all goes on care home fees anyway. I had elderly relatives in care homes who paid off their houses sat next to others who didnt, they all receive the same care regardless.

When you rent you can't have pets, you can't put up pictures, you can't paint the walls, you can't change the carpet, you're stuck with the landlord's el cheapo white goods, and you're probably tripping over their lopsided end table and sitting on their twenty year old couch.

I expect this to change. Look at osbornes move against the amateur buy to let fool, they are being replaced. I also expect tenants rights and treatment to move up the agenda as more of us rent. Renting works pretty well in other countries, its not renting itself that is the problem its the associated rights of the tenant and incompetence of the 'investor'/patsy here.

It could well be a completely different picture in as little as 5 years, but neither option looks good to me today.

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When you rent you can't have pets, you can't put up pictures, you can't paint the walls, you can't change the carpet, you're stuck with the landlord's el cheapo white goods, and you're probably tripping over their lopsided end table and sitting on their twenty year old couch.

When you rent, you may well not know when someone might come round for an 'inspection' or a gas check. In London, you're probably living with strangers and you may well have a cleaner or other service come into your private space while you're out.

In the UK, buying means freedom. You can lock your door and do what you like in your own space. Rentals do not provide that, and for some personality types no amount of freedom to globetrot will make up for that.

none of that is true for most renters.

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none of that is true for most renters.

Indeed, I can put up pictures.

Wasn't going to take it further off topic after my post. but I concur.

The only thing that applies to me in IrrationalActors post is not knowing if the landlord will sell up or evict me. But I've been static for 20 years so far. Anything goes wrong with the services or fabric and I call the repairmen etc as do any of the other tenants. I haven't seen the landlord in 3 years.

Not BTL though, which is where the horror stories in IrrationalActors post lie predominantly, I would imagine.

Having said that, many wouldn't put up with some of the fabric of my accommodation or its lack of mod cons. But that is also a benefit of renting, since if it was my place I'd have wasted money on improvements that in reality, I can live without.

Edited by LiveinHope

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It doesn't mean buy before the coming crash, it means buy before you can't afford to because prices always go up.

That's what I'm saying. The more people who can't afford to buy property, the fewer and fewer FTBs there are on the market. In any market, you need a certain number of buyers before prices start falling.

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