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Ludwig von Mises wrote that "There is no means of avoiding the final collapse of a boom brought about by credit expansion."

 

Keep this in mind when thinking of the UK property market. It will crash for sure. Just a question of when and how much!

The tolls and the naysayers ("you've been saying this since 2007...") They're in for a big surprise.

 

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It has never a question of "IF" but "WHEN".

The stopped clock will eventually be right

 

 

For the people worried about inflation, even if house prices remaim static at todays prices you are not losing anything.  The homeowners with big debts having to cope with pay cuts and inflation will struggle. 

 

Owning a large mortgage, or worse several levered mortgages, right now is not a good place to be. 

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Things suddenly feel surreal. Prices are now completely detached from reality and HAVE to crash. £400k properties arbitrarily having another £100k casually added to asking price... valuations are just insane now, and appear to follow no rationale. Somebody commented on another thread he's calling the top of the market. I'm agreeing with that.

When popping a spot, you know that 1/10th of a second before it bursts, you know in that instant it's about to burst because the pressure applied is too much for the skin to bear. I've never felt so sure the property market is now in that 1/10th of a second. 

Edited by Orb
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Things suddenly feel surreal. Prices are now completely detached from reality and HAVE to crash. Somebody commented on another thread he's calling the top of the market. I'm agreeing with that.

When popping a spot, you know that 1/10th of a second before it bursts, you know in that instant it's about to burst because the pressure applied is too much for the skin to bear. I've never felt so sure the property market is now in that 1/10th of a second. 

I am seeing some houses at 3x what someone on 100k a year could possibly afford. 

The prices are beyond bubble levels. 

 

Proper bubble mania

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3 minutes ago, TheCountOfNowhere said:

I am seeing some houses at 3x what someone on 100k a year could possibly afford. 

The prices are beyond bubble levels. 

 

Proper bubble mania

I saw a detached 'holiday home' bungalow in North Northamptonshire yesterday. It wasn't even a bricks and mortar property. It was £280k. 

I'm now beyond anger, and I'm just laughing. Almost as if I don't care about ending up on the streets or living in a van. That's preferable to playing this game. 

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I am seeing some houses at 3x what someone on 100k a year could possibly afford. 

The prices are beyond bubble levels. 

 

Proper bubble mania

Proper bubble mania for sure. But think what a crash at this point would look like. Make 1929 look like minor hiccup! Kind of explains why TPTB will stop at nothing.

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I saw a detached 'holiday home' bungalow in North Northamptonshire yesterday. It wasn't even a bricks and mortar property. It was £280k. 

I'm now beyond anger, and I'm just laughing. Almost as if I don't care about ending up on the streets or living in a van. That's preferable to playing this game. 

Ask anyone, they think house prices are ridiculous now.

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Proper bubble mania for sure. But think what a crash at this point would look like. Make 1929 look like minor hiccup! Kind of explains why TPTB will stop at nothing.

It's unstoppable one way or another.  Nominal or in real terms it will happen, even if it means the collapse of the £ and a new currency.

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Mises wrote that like a hundred years ago.

And never  is it so more relevant.

Bubbles are nothing new . The crash is inevitable. 

 

100 years at least being immortal you can wait that long. 

Timing is key in everything. 

 

Edited by captainb
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Ask anyone, they think house prices are ridiculous now.

True. I agree....absolutely everyone and anyone. 

I have spoken to several EAs and they have been mystified. None of them believe it will continue and they are trying desperately to move chains to exchange before the mood starts to change. 

To be fair, the consensus is most think we have a few more weeks or even a couple of months left before things stop selling. Even the most bullish amongst them sees a really difficult February March. 

I think some of the numpties out there are waiting for an asteroid strike and national state of emergency....then increase their offers up a bit 🤷🏻‍♂️

Watching and waiting 😉

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Piffle.

Time in the market is the key to everything. Timing the market is for the fairies.

Right. So in context buy a house right now rather than timing it? 

As you can't go back in  time buying right now gains most time in market that's humanly possible. 

 

Not to say waiting 100 years isn't absurd 

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Right. So in context buy a house right now rather than timing it? 

As you can't go back in  time buying right now gains most time in market that's humanly possible. 

 

Not to say waiting 100 years isn't absurd 

Don't be daft. You can build a long position in the housing market with REITs or REIT ETFs without ever buying a house or taking on a mortgage. Likewise, FTSE 100 housebuilders like Taylor Wimpey and Persimmon.

Yes, waiting 100 years is absurd! Even waiting 15 years is absurd, which is why I'm buying next year come what may.

 

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Don't be daft. You can build a long position in the housing market with REITs or REIT ETFs without ever buying a house or taking on a mortgage. Likewise, FTSE 100 housebuilders like Taylor Wimpey and Persimmon.

Yes, waiting 100 years is absurd! Even waiting 15 years is absurd, which is why I'm buying next year come what may.

 

You do realise reits shift in an exaggerated fashion compared to the underlying asset. Much more volatile than buying a house. 

If you are just going to sit on it personal property is a much sounder strategy. 

If you bought HMSO or Intu last year you would wiped out. Time in the market there would be particularly poor. 

Taylor wimpey you mention, halved since start of year and if you were unfortunate enough to have invested pre 2008 you would still be sitting on an 80% loss. 

Of course though... Time in the market right? Unless it's housing apparently. 

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You do realise reits shift in an exaggerated fashion compared to the underlying asset. Much more volatile than buying a house. 

If you are just going to sit on it personal property is a much sounder strategy. 

If you bought HMSO or Intu last year you would wiped out. Time in the market there would be particularly poor. 

Taylor wimpey you mention, halved since start of year and if you were unfortunate enough to have invested pre 2008 you would still be sitting on an 80% loss. 

Of course though... Time in the market right? Unless it's housing apparently. 

If you bought anything last year you'd be looking at huge losses.

If you bought property in early 2008 you'd have been underwater for years.

If you own property now you're going to be taking a bath.

The Efficient Markets Hypothesis is trivially true. Real markets are difficult /impossible to beat, arbitrage opportunitiese are scarce and disappear quickly. Market statistics overwhelmingly represent the behaviour of know-nothing noise traders. Time in the market is the key to everything.

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If you bought anything last year you'd be looking at huge losses.

If you bought property in early 2008 you'd have been underwater for years.

If you own property now you're going to be taking a bath.

The Efficient Markets Hypothesis is trivially true. Real markets are difficult /impossible to beat, arbitrage opportunitiese are scarce and disappear quickly. Market statistics overwhelmingly represent the behaviour of know-nothing noise traders. Time in the market is the key to everything.

"If you bought anything last year you'd be looking at huge losses" aside- from anything tech related? or S&P500 worlds largest index? so not really "anything"

"If you bought property in early 2008 you'd have been underwater for years." - where? you certainly wouldn't be sat on an 80% loss like a builders shares.

"If you own property now you're going to be taking a bath."

That is the exact opposite of your time in the market statement - with that you are saying you do need to time the market and "time in the market" is not key to "everything"

 

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"If you bought anything last year you'd be looking at huge losses" aside- from anything tech related? or S&P500 worlds largest index? so not really "anything"

"If you bought property in early 2008 you'd have been underwater for years." - where? you certainly wouldn't be sat on an 80% loss like a builders shares.

"If you own property now you're going to be taking a bath."

That is the exact opposite of your time in the market statement - with that you are saying you do need to time the market and "time in the market" is not key to "everything"

 

Given that we're in the middle of the greatest recession the world has ever seen I can hardly be accused of timing the market by suggesting that bubblicious UK house prices are about to fall. That information wasn't available to buyers prior to 2020. Anyone who bought recently 'because of the trend' is going to get soaked.

The average UK property’s value plunged by 20 per cent over 16 months following the GFC, while transaction levels slumped from 1.65 million in the decade up to the crisis to 730,000 in the year to June 2009.

It took six years for average prices to return to pre-crash levels. Regional prices, especially Northern Ireland, took even longer to recover. A succession of Tory govts has spent hundreds of billions of pounds in the interim on market-defying subsidies.

 

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  • 433 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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