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Greg Bowman

When Property Becomes a Roof and a Floor Again -FT

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Article on FT Website today thought this summary was elegant:

"The Long term question is broader.In a sustained or stable rate environment - something many developed countries have not seen in almost four decades - will houses cease to be the primary consumer investment ? A house is not after all a productive asset. It is shelter. Its power as an investment vehicle may be an artefact of a specified time in history'

I don't read the FT that often but strikes me as a view very much in tune with younger generations not their traditional readership. I think another OP has mentioned that there will be plenty of eloquent journalists in the mid thirties early forties who are now realisng the whole property ponzi is a nonsense. Which is why I think MSM will for now at least be driving sentiment in the direction of a crash being a good thing.

 

Edited by Greg Bowman

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11 minutes ago, Maynardgravy said:

T'is a veritable torrent now. This surely can only be coordinated?

It is a torrent and I don't really follow the MSM that much so I only picked up the momentum last couple of months but it really is gaining traction. Agree with Greg many in their 30s and early 40s see the housing Ponzi for what it is, a Ponzi, and utter nonsense

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Lets say morgages go back to average of 6%.

Each 100k of debt will cost you 500/month, 6k/year. Needing -10k of earnings.

About 400/m repayment,  5k year  another 8k of earnings.

That 28k uk mean salary is soon used up.

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4 hours ago, Maynardgravy said:

T'is a veritable torrent now. This surely can only be coordinated?

I thought that too slick and across too many outlets

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Are they precursing the end of monetarism? (If my amateur economics knowledge gets it...)

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9 hours ago, Talking Monkey said:

It is a torrent and I don't really follow the MSM that much so I only picked up the momentum last couple of months but it really is gaining traction. Agree with Greg many in their 30s and early 40s see the housing Ponzi for what it is, a Ponzi, and utter nonsense

I am a media addict; the change has been palpable and IMO is not a coincidence. From TV programs to papers. Had many people put up with my rants about housing now messaging me articles and messages of "Oooh thanks,I read it here; think you were right year or so ago." etc

The worm has turned and the early bird in certain establishment circles, knows this.

Edited by Tapori

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The change in tone is certainly noticeable,  very obvious to those with a stake in the market  (both ways)

 

Plus, that imbecile Kristie whatever has left twitter with a washing machine story...

 

Interesting times 

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12 hours ago, Tapori said:

I am a media addict; the change has been palpable and IMO is not a coincidence. From TV programs to papers. Had many people put up with my rants about housing now messaging me articles and messages of "Oooh thanks,I read it here; think you were right year or so ago." etc

The worm has turned and the early bird in certain establishment circles, knows this.

Yeah i sort of felt that we were reaching the point of unsustainable HPI, it overshot the maximum affordability clearing level end of 2015 (in the shires). All of 2016 was sellers adding 20% on top of 2015 (greed). This year we seem to see vendors started to get jaded with zero viewings. 

i remember clearly several convocations, mainly about the BTL changes causing falls. And in my humble opinion that they should wait to buy. And low and behold you start to see the crash stories in the media, right on que.  We should see the perfect HPC storm forming over the next 18 months, so much coming into play now.

as much as i do love to say to people 'i told you so', the damage HPI has caused me, makes me a bit sick. i just want a reasonable humble home to raise a family in, without being crippled with debt and forced to stick with a stressfull job with no options open to me. 

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3 minutes ago, jiltedjen said:

as much as i do love to say to people 'i told you so', the damage HPI has caused me, makes me a bit sick. i just want a reasonable humble home to raise a family in, without being crippled with debt and forced to stick with a stressfull job with no options open to me. 

This.

Something so basic as owning a home should not be a dream or an aspiration.  It's just something you DO, not something you have to wish and hope for.

So wrong.

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1 hour ago, wotsthat said:

I am not buying this from the FT, they always remind, with a lot more of the more "quality" newspapers including the Guardian and Observer, of all those disingenuous homeowners and even worse homeowners with BTL properties, who shed crocodile tears for their "poor poor kids who just cannot get on the ladder" and how unfair it is. Until that is there is even the sligtest threat that their property equity could or is about to dive, and then then that's when they show their true colours," Fu*k the kids"

I have met a few homeowners I would like to add that genuinely don't give a toss about their house prices and really do care about their kids, sadly there are very few of them in governement.

That's my point not the standard line you would normally get from them

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1 hour ago, wotsthat said:

I am not buying this from the FT, they always remind, with a lot more of the more "quality" newspapers including the Guardian and Observer, of all those disingenuous homeowners and even worse homeowners with BTL properties, who shed crocodile tears for their "poor poor kids who just cannot get on the ladder" and how unfair it is. Until that is there is even the sligtest threat that their property equity could or is about to dive, and then then that's when they show their true colours," Fu*k the kids"

I have met a few homeowners I would like to add that genuinely don't give a toss about their house prices and really do care about their kids, sadly there are very few of them in governement.

Indeed, Janet Yellen is already calling the top of this interest rate cycle.

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I think that the problem is that HPI is now so ingrained in peoples minds that even if there is a fall people would still think that prices will rise again in the future and housing is worth "investing" in as it "always recovers and goes up in price". This kind of mentality needs to be discouraged, otherwise cash buyers will rush in as soon as there is a meaty drop. What this country really needs is to make a fundamental change so that housing is never again seen as an investment. I was thinking about what kind of change would be necessary to change sentiment and I think the main thing would be introducing CGT on main homes as it would affect everyone selling a property and would be hard to get out of paying and once property is no longer seen as producing a profit without a penalty, people will move away from investing in housing. They would have to reduce other taxes/tinker a bit with the system in order to make this viable but I think it is really the only thing they can do to make a radical change to sentiment and ensure that property never again becomes an investment plaything.

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Land value tax, more than CGT. tax the asset along its lifetime and not at death (inheritance tax) or point of sale ( CGT). 

No tax evasion possible

Edited by Freki

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if there was a plentiful supply of housing in the right place it would soon lose its investment appeal. It only works as an investment because of scarcity...and folks fighting over them. Just like folks would if they restricted the food supply.

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20 hours ago, jiltedjen said:

Yeah i sort of felt that we were reaching the point of unsustainable HPI, it overshot the maximum affordability clearing level end of 2015 (in the shires). All of 2016 was sellers adding 20% on top of 2015 (greed). This year we seem to see vendors started to get jaded with zero viewings. 

i remember clearly several convocations, mainly about the BTL changes causing falls. And in my humble opinion that they should wait to buy. And low and behold you start to see the crash stories in the media, right on que.  We should see the perfect HPC storm forming over the next 18 months, so much coming into play now.

as much as i do love to say to people 'i told you so', the damage HPI has caused me, makes me a bit sick. i just want a reasonable humble home to raise a family in, without being crippled with debt and forced to stick with a stressfull job with no options open to me. 

Aye. Let us pray it happens.

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On 7/15/2017 at 1:17 PM, Greg Bowman said:

A house is not after all a productive asset. It is shelter.

Ridiculous.

Gold is not a productive asset.

A home generates value by providing shelter and security. There is no reason (economically speaking) you couldn't sleep on the streets. The shelter value of a house should be compared with not having a house.

The location of the home affects the value it generates; a home near a factory generates more shelter value than a home in the middle of a desert.

"HURRRR BUT WHAT ABOUT VOID STOCK?!" 

Unused lathes do not produce value either; does that mean lathes do not produce value?

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On 15/07/2017 at 1:25 PM, Maynardgravy said:

T'is a veritable torrent now. This surely can only be coordinated?

The MSM and the Establishment have always been in cahoots.

 

I've not looked at Carillions share price this morning yet but I expect it to be up...the reason...TalkSport  (Sky?) was telling me   today that  Carillion just landed a big HS2 deal.

 

 

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32 minutes ago, Locke said:

Ridiculous.

Gold is not a productive asset.

A home generates value by providing shelter and security. There is no reason (economically speaking) you couldn't sleep on the streets. The shelter value of a house should be compared with not having a house.

The location of the home affects the value it generates; a home near a factory generates more shelter value than a home in the middle of a desert.

"HURRRR BUT WHAT ABOUT VOID STOCK?!" 

Unused lathes do not produce value either; does that mean lathes do not produce value?

http://www.fresheconomicthinking.com/2010/02/housing-investment-is-not-productive.html

https://www.rebuildingsociety.com/investing-in-property-doesnt-create-a-productive-economy/

https://www.macrobusiness.com.au/2014/02/its-housing-thats-killing-productivity/

 

 

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On 15/07/2017 at 5:58 PM, Greg Bowman said:

I thought that too slick and across too many outlets

Flocks of birds change direction and wheel around fluidly without any coordinated effort. Media both reacts to and drives sentiment.

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2 hours ago, Arpeggio said:

I don't see any arguments about whether shelter value is a useful commodity which housing provides, only baseless assertions. 

If housing doesn't generate value, why do people buy houses, as opposed to living in tents?

Why is exactly the same house priced differently based upon its geographical location?

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