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House Price Armageddon


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The STRs are making a big mistake in thinking that a property crash will somehow make property prices cheap when this is clearly not the case since property is expensive even during an economic slump.

The STRs believe that it will be easy to buy a property on the cheap during a crash in the hope of making alot of money by selling the property for a much higher price in the next property boom but the flaw in this argument is that there is unlikely to be another property boom for at least ten years which means that if the STRs buy a property soon after a crash they will effectively be spending alot of money in buying an asset that will not be appreciating in value for many years.

Buying a property during a crash will end up being a financial liability because the value of the property is likely to languish at the bottom for many years and will not rise in value to keep up with inflation, which means that the buyer will be continually losing money in having invested so much in an asset that is not rising in value to keep up with inflation.

The STRs would like to see a property crash to occur so that they can buy a property on the cheap but the major drawback is that when the crash does finally happen many STRs will be put off from buying a property even though house prices will be low because many STRs will be badly affected by any economic slump and will find it difficult to earn a living during a recession in which businesses are closing and going bankrupt and people are being thrown out of work and many STRs will face job insecurity and some will lose their job and find it difficult to find another job.

The STRs only chance of getting back onto the property ladder is if a severe recession occurs that manages to bring house prices back to normal which means that the STRs can look forward to going house hunting during an economic slump.

The STRs are clearly amateur property speculators who think that they can make it as serious property investors, but serious property investors know that timing is crucial and that there is no point in buying a property if it is not likely to appreciate in value for many years because it is just tying up money in an asset that is not rising in value to keep up with inflation which means that buying a property during a crash will end up losing money because the value of the property will be languishing whilst the value of the property will be continually being eroded away by inflation.

The STRs appear completely clueless about the property market and lack the necessary knowledge and understanding about the economic cycle and the basic way the economy works. The STRs are just fumbling around in the dark and don't have the foggiest idea what they are doing and are desperately hoping for events to go their way but this is just plain wishful thinking.

The STRs don't have any idea what the trigger will be that will cause a property crash; they don't know when the crash will occur; by how much house prices will fall; and when the trough in house prices will be reached. What is even worse is that the STRs are hoping to buy a property on the cheap during a crash without knowing when the next housing boom is likely to occur and by how much house prices will rise in the next property boom.

With all this uncertainty it makes you wonder why the STRs are bothering waiting for a property crash to occur because the STRs don't know when the next house price boom will occur and it is likely that the next property boom won't occur until a long and deep recession has occurred that has completely unravelled and unwound the current boom which will take many years.

It is only when the next recession has succeeded in bringing down the current economic boom and flattened the economy so that it has removed all the excesses and distortions of the boom and purged the economy of all the inflationary excesses of the boom, only then will the economy be in a state where another boom can then take place causing another housing boom to begin.

It is absolutely crazy and insane to buy a property during a crash when property prices are expected to be falling or languishing at the bottom for many years. Sensible property investors buy property when the economy is about to enter another boom that will cause house prices to rise rather than buying property when the economy is entering a long and deep recession that will keep house prices depressed for many years.

This had me temped to enter my first AWOOGA, but I think I will bite instead first. You make a lot of assumptions about STR's and their movitations, none of which are true in mycase (and I am a STR). I don't see property as an investment, but just want the next house to be the my dream house. Which I can only do if may salery stays where it is compared to average earnings and average house prices return to 3.5 x average earnings.

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The STRs are getting itchy feet and are getting fed up of renting and hate paying all that dead money in rent that is helping to pay off the landlord's mortgage.

The STRs just can't wait to get back onto the property ladder. It is a bit wierd and bizarre that the STRs are so keen to get back onto the property ladder when they were so keen to get off the property ladder in the first place.

The STRs want to get back onto the property ladder quickly because they fear that their STR fund money that they made in selling their property is losing value all the time because it is being eroded away by inflation and the STRs are very anxious to re-invest their STR fund money back into property before their STR fund money ends up being worthless because of inflation.

The STRs arrogantly thought that once they got off the property ladder then they would be able to get back onto the property ladder with ease but they are finding to their horror that getting their foot back onto the property is not going to be as easy as they originally thought. The STRs did not consider the very real possibility that once they got off the property ladder then they may never get a chance of getting back onto the property ladder ever again.

The continuing housing boom is causing the STRs to experience severe financial and emotional problems because they had gambled on a property crash occurring soon after they sold their property which would have mean't that they would only be spending a short time living in rented accommodation but they are now finding that they will be living in rented accommodation for much longer than they had expected and this is causing the STRs to experience severe stress and anxiety and are becoming increasing moody and frustrated and distressed at not seeing any sign of the property crash occurring which is making the STRs try to alieviate their depression by indulging in retail therapy and spending lots of money just to take their minds off the property market and this has dramatically increased the outgoings and living costs of the STRs.

The STRs let short-term greed cloud their judgement and they sold their property for a high price, knowing full well that the property was way over-priced, to some poor over-stretched, niave and gullible buyer, ripping off the buyer in that the buyer payed far too much much for the property.

The STRs were quite happy to sell their property for a high price but they themselves are not prepared to pay a high price for property and are waiting for a crash to occur so that they can then buy a property more cheaply. It is only reasonable that since the STRs were happy to sell their property for a high price then the STRs should themselves be prepared to pay a high price for property.

It would be hypocritical and two-faced of the STRs to insist that someone pay a high price for their property only for the STR to insist that they themselves are only willing to buy a property at a low price.

The STRS hate living in rented accommodation because they have discovered to their cost that their living expenses and general outgoings have significantly increased since selling their property and moving into rented accommodation. The STRs can't stand being in their rented accommodation for long without tearing their teeth out and as a consequence are find themselves going out more often and spending much more money than they did when they owned their own property and stayed in more often which has mean't that their expenses have risen considerably since moving into rented accommodation.

The STRs had hoped that a property crash would have happened soon after they sold their property so that they would only spend a short time living in rented accommodation and that they would be able to quickly get back on to the property ladder and buy a property more cheaply during a crash. However, the property crash has not occurred and there is no sign of a property crash occurring and it is unlikely to occur for many years to come which means that the STRS are fbeing orced to stay living in rented accommodation for much longer than they had expected, paying all that dead money in rent that is helping to pay off their landlord's mortgage.

Given the choice the STRs would much rather be living in a home of their own than living in rented accommodation. They made their decision to sell to rent based on the mistaken assumption that they will be renting for only a short time because they had assumed that a property crash would have happened soon after they sold their property but this has proved to be wishful thinking and the STRs are now paying a terribly high price for their ill-judged decision to sell to rent and are find themselves living in a place they hate for much longer than they had ever expected and are facing the very real prospect of never getting the chance of getting back onto the property ladder ever again.

razzmatazz, I've just read this three times on three threads in three minutes. Had enough yet?

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razzmatazz AKA Bruno Powroznik.

He used to run a website that said prices would crash 70% in 2005.

So he was a little out.

I don't know if he's bought again since then,but there certainly seems to be a lot of sour grapes.

Do a google on the man, he's certainly a colourful character.

Bruno Powroznik runs a website called House Price Armageddon "House prices in Britain will crash by 70 per cent in 2005. It will all end in tears. Housing booms in Britain have never ended without economic pain.

"In the 1980s, house prices needed to fall by 26 per cent to line up with historic trends. In the end they actually dropped by 37 per cent. If this level of over-correction were repeated during this cycle, prices would fall by 44 per cent. The history of markets teaches us that when someone says 'new paradigm' or 'it's going to be different this time', you should get worried.

"The property market is like a pyramid selling scheme, based on greed and speculation, where people are piling in for fear of missing out. Lenders talk of a 'gradual slowdown' in the housing market but this has never happened in the UK. Everyone is hoping for a soft landing but we don't have soft landings in things like this, ever. When a market goes up and up, there is a perception that it can never go down and it always does. House prices were unlikely to fall gently as they had risen so rapidly."

Edited by BandWagon
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razzmatazz

I was forced into becoming a STR through a desire to move from one location in the country to another. Problem is the present location is £30k dearer for similar properties so I have decided to build up a bigger deposit until I buy again. I think this is a sensible option, plus I dont know how the job will work out so it helps to be flexible until you can be sure you will be settled for a while.

I would have liked to have kept the house but I wasn't living there and the money I could get from renting it out would hardly meet the interest on the mortgage repayments. Also why should I hold onto a house somewhere else in the country while there were families wanting these houses to live in.

Edited by Shamus
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it is bruno / bill gates

our resident nutter :P

I'm no expert in these things but I suspect Bill Gates might actually be mentally ill. The persistent posts with the strange, rather robotic prose, they don't strike me as the products of a well balanced mind . I was a CAB volunteer a long time ago and BG's postings reminds me of the droning monologues some of our less rational clients used to indulge in. Then there were those strange postings he used to do (mostly ignored and deservedly so) saying things like Vicki Butler-Henderson looked like a man and so on...

Anybody out there able to offer a professional opinion on Mr Gates's sanity, or otherwise?

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