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Next 6 months in the housing market. Boom, bust, or mini correction?


Next 6 months. Boom, bust, or mini correction?   

59 members have voted

  1. 1. Next 6 months. Boom, bust, or mini correction?

    • Boom
      11
    • Bust
      10
    • Mini correction
      29
    • Other
      9

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  • Poll closed on 07/15/2021 at 11:00 PM

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My claims, made  on other threads, still stands.

When the dust settles, the 2020 mortgages sold will be below 2019. and the 2021 mortgages sold will be below 2020.

The number of housing transactions will collapse, from already multi-decade lows.

FED looks likely to raise before 2023 then UK housing market is double ff-ed.

 

 

 

 

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1 minute ago, spyguy said:

.

FED looks likely to raise before 2023 then UK housing market is double ff-ed.

 

 

 

 

Yes but that's a few years away. Boom until then?

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2 minutes ago, Si1 said:

Yes but that's a few years away. Boom until then?

Several months, Id reckon.

More n  more of UK mortgage funding is coming from capital markets, which tend to move quicker in anticipation of the future.

And the bigger banks are now looking ahead and trying to anticipate changes.

The smaller inc. NW, are just going to run into a wall and go under.

 

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Sans further market support, I can't see anything other than a bust.

Edit: The above is for the housing market. For everything else - inflation.

Edited by Timm
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Short term boom, whilst those big spenders who couldn't spend like mad during lockdown restrictions spend like mad on holidays, meals out etc.

Then I am guessing things will slow down by autumn, but not sure whether it will be a minor correction or a bust? 

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  • Si1 changed the title to Next 6 months in the housing market. Boom, bust, or mini correction?
2 minutes ago, moonriver said:

Short term boom, whilst those big spenders who couldn't spend like mad during lockdown restrictions spend like mad on holidays, meals out etc.

Then I am guessing things will slow down by autumn, but not sure whether it will be a minor correction or a bust? 

Indeed, I didn't say that I meant the housing market. I've changed the title slightly now. My bad.

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It depends on inflation, at the moment the BoE are ignoring inflation because nothing must be allowed to interfere with the holy and sacred housing bubble. However if their bet is wrong and inflation really takes hold, they will be forced to increase rates and that changes everything.

The housing bubble is not being fueled by a lack of supply but by cheap money. Take that away and the bubble implodes. No more cheap mortgages and those that borrowed assuming that rates will never increase will suddenly face repayments they can't make.

This will flood the market with houses at the very point people can't afford mortgages and you will get a collapse in prices.

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Real terms (slow) Bust for me.    The dash from city flats that was happening will peter out. Fewer people to pay silly money will mean prices stagnate or fall slowly. I do not think a rapid nominal price drop will occur unless interest rates rise significantly.  

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2 minutes ago, bartelbe said:

It depends on inflation, at the moment the BoE are ignoring inflation because nothing must be allowed to interfere with the holy and sacred housing bubble. However if their bet is wrong and inflation really takes hold, they will be forced to increase rates and that changes everything.

The housing bubble is not being fueled by a lack of supply but by cheap money. Take that away and the bubble implodes. No more cheap mortgages and those that borrowed assuming that rates will never increase will suddenly face repayments they can't make.

This will flood the market with houses at the very point people can't afford mortgages and you will get a collapse in prices.

Yes. It's the Krugman Vs Haldane debate. Haldane says current inflationary spike could become a positive feedback cycle. Krugman says not.

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My prediction is nothing, flat or negligible either up or down.

Don't really see the ingredients for forced selling as yet. That would require either a sharp jump in interest rates. Or some kind of sharp lay-offs when furlough ends. But both look doubtful and even if happened I feel there would be a prop to counter.

Even for those who haven't gained from the boom, ie flat sellers, it isn't that expensive for sellers to simply hold out, if you have the cash to pay the mortgage in the meantime and they perceive the market will recover. And why wouldn't they, the vast majority of people would believe in the long run that house prices only go up.

So for someone that has failed to sell at flat at £350k, they could drop the price and get it sold now at £320k which realises a -£30k loss against the number their heart is set on. If they assume they can wait a year and get the £350k, that period doesn't have to be thatt expensive. 12 months of bills, sure; but the majority of their mortgage payments they make will accrue back to them as it is knocked off the principal.

Which I think is pretty much the game plan. Most people aren't going to be clever enough to realise that a very small nominal gain in prices means that they have only gained relative to cash, but lost out to most other assets. 

Thus people will be slagging off naysayers with 'where is your house price crash, my house has gone up in value' without even realising it's happened right underneath them.

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7 minutes ago, shlomo said:

Our track record on predicting house price crash is so abysmal that this thread should be locked 

I have a higher probability of 5hagging a supermodel than us being right

😂😂😂 you are definitely a realist.

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I'm predicting,

Boom.

New delta variant plus or whatever new strain emerges, which causes poor vaccine efficacy or ADE comes about.

Cases rise to high levels, 2-3k deaths aday, new government props are introduced and BOE goes negative on rates.

House prices increase again around 7-10% this year.

The housing crisis gets worse, builders tap government on shoulders, to back 100%+ mortgages.

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BUST!!!!!

A crappy little maisonette near me has been reduced to slightly lower than it's last sale price in 2018 (c40% higher than 2007). Could be an overpaying idiot a few years ago, or it could be a sign that the 10% BOOOOM over the past year has simply disappeared as quickly as it appeared (or didn't really exist except in a few rushed purchases in the first place).

Or it could mean nothing. Hey ho.

Repoening next month will hopefully give us a better view on what people are willing and able to pay.

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The Tories are backed into a corner now; any HPC will destroy their ability to trash Labour economic competence.

It'll be every prop they can throw to keep prices up:

  • SD relief repackaged
  • Pension drawdown into deposits
  • MIRAS II
  • "Levelling Up" grants
  • Mortgage furlough
  • QE to the moon
  • Hancock to Help out
  • Bounce back with BoJo
  • Rent out with Rishi
  • Priced out with Priti
  • Rental Fees with Rees-Mogg
  • Rent your Garage with Farage
  • Get your home with Widdecombe

 

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14 minutes ago, msi said:

The Tories are backed into a corner now; any HPC will destroy their ability to trash Labour economic competence.

It'll be every prop they can throw to keep prices up:

  • SD relief repackaged
  • Pension drawdown into deposits
  • MIRAS II
  • "Levelling Up" grants
  • Mortgage furlough
  • QE to the moon
  • Hancock to Help out
  • Bounce back with BoJo
  • Rent out with Rishi
  • Priced out with Priti
  • Rental Fees with Rees-Mogg
  • Rent your Garage with Farage
  • Get your home with Widdecombe

 

Agreed. Except Rishi and Boris don't have the ability of Brown, Darling or Osborne. I think he blew the stamp duty holiday gambit a year too early at least.

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1 hour ago, Speed1987 said:

I'm predicting,

Boom.

New delta variant plus or whatever new strain emerges, which causes poor vaccine efficacy or ADE comes about.

Cases rise to high levels, 2-3k deaths aday, new government props are introduced and BOE goes negative on rates.

House prices increase again around 7-10% this year.

The housing crisis gets worse, builders tap government on shoulders, to back 100%+ mortgages.

Are the high street banks ready for a negative rate yet? Does anyone know if computer systems are being worked on to put this in place, I know the BOE have told the banks to make preparations for a negative rate but these changes can take years to put in place aka year 2000 bug. Are there any bank IT bods out there who know what's going on?

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