Quid Game Posted December 20, 2023 Share Posted December 20, 2023 2 hours ago, Flat Bear said: Yes. Plenty of egg on my face. The official figures show inflation is down, and more importantly to me is my own anecdotal evidence showing real supply side deflation in places. The reasoning and what is to come? China has always been the Elephant in the room and I have first hand experience of massive deflation in Chinese export prices. This coupled with the collapse in shipping costs. To put this one point into perspective, I am finding "some" prices of manufactured products as much as 30% down from the height and container costs that would cost me over $12000 dollar have now dropped to $600 I know you are intelligent enough to understand this is a massive overcorrection and is not sustainable but the fact remains we are currently experiencing a very large supply side deflation pressure albeit temporary. This together with the large falls in the fuel and power prices has bought the CPI figure down even lower than had been predicted. All this downward pressure on the supply side inflation does not mean there will not be a devaluation of the currency which has expanded too quickly. This inflation will manifest itself over a longer time frame. So in concludsion, I am surprised at the magnitude of the overcorrection but I would suggest there still is a lot of latent inflation in the system due to overprinting QE etc which is only slowly showing in the figures. Bailey for the very first time I can recall is right that interest rates will have to rise again because he knows there is inflation to come. This is realised by the BOE and the Treasury and I would not be surprised if we see the likes of Sunak and Hunt use these falls in the CPI figures for political gain and it is quite possible they will see this as a way to win/hold onto more seats than they could have hoped for and a very early GE could be called before the figures show they real long term trend. Anyone with any intelligence or basic understanding of the economy would understand that this was not due to the actions taken by the BOE/Treasury over the last year but I think they will still try and use this as the reason for their financial prowess and there will be some who will believe it. Yes, I was expecting double digit inflation (CPI) going into 2024 and interest rates of 6% by February 2024 and also said we would see inflation at or around 20% by the end of 2024. I still believe we could see double digit inflation (CPI) sometime in 2024 and interst rates within 12 months but know believe the falls in nominal house prices will be lower. I also predicted house price falls of around 5% by the end of 2023 year on year and we would see year on year falls of 8% to 10% by the end of 2024. These lower current CPI figures we are seeing and my own experience tells me we are only likely to see falls of circa 3% this year and the same, if any at all, in 2024. Humble pie for me over Xmas. And kudos to you for recognising you were wrong and then reassessing and growing. You are in the 1% of this forum. Quote Link to comment Share on other sites More sharing options...
TenerifeSea Posted December 21, 2023 Share Posted December 21, 2023 The stars are aligning for a house price boom in 2024/25. Stewy has been calling it for a while to much ridicule from the rest of the forum. House prices have been falling in real terms for a while now and in that time the population has increased to the order of a million extra people. The market has been going sideways for the best part of 18 months while mortgage rates have surged. Rates have now stabilised and will be coming down in the near future. Some serious demand will be coming to the table if rates are cut significantly. House price inflation may even be the tool that saves the country from a deflationary trap. The best time to buy may well have passed. Quote Link to comment Share on other sites More sharing options...
BaldED Posted December 21, 2023 Share Posted December 21, 2023 29 minutes ago, TenerifeSea said: The stars are aligning for a house price boom in 2024/25. Stewy has been calling it for a while to much ridicule from the rest of the forum. House prices have been falling in real terms for a while now and in that time the population has increased to the order of a million extra people. The market has been going sideways for the best part of 18 months while mortgage rates have surged. Rates have now stabilised and will be coming down in the near future. Some serious demand will be coming to the table if rates are cut significantly. House price inflation may even be the tool that saves the country from a deflationary trap. The best time to buy may well have passed. Cloud Cuckoo Quote Link to comment Share on other sites More sharing options...
markyh Posted December 21, 2023 Share Posted December 21, 2023 8 hours ago, Flat Bear said: China has always been the Elephant in the room and I have first hand experience of massive deflation in Chinese export prices. This coupled with the collapse in shipping costs. To put this one point into perspective, I am finding "some" prices of manufactured products as much as 30% down from the height and container costs that would cost me over $12000 dollar have now dropped to $600 This is nothing. A 425w Solar Panel that we actually purchase and fitted to customers homes in February 2023 and December 2023 has dropped wholesale from £130 panel in February to £61 a panel now in early December 23, and has now dropped again to £55 a panel. In September 2022 the previous 400w model was around £70 a panel. Quote Link to comment Share on other sites More sharing options...
Stewy Posted December 21, 2023 Share Posted December 21, 2023 4 hours ago, TenerifeSea said: The stars are aligning for a house price boom in 2024/25. Stewy has been calling it for a while to much ridicule from the rest of the forum. House prices have been falling in real terms for a while now and in that time the population has increased to the order of a million extra people. The market has been going sideways for the best part of 18 months while mortgage rates have surged. Rates have now stabilised and will be coming down in the near future. Some serious demand will be coming to the table if rates are cut significantly. House price inflation may even be the tool that saves the country from a deflationary trap. The best time to buy may well have passed. Buying during The Plateau was one of those few times it's better to be correct on your own than wrong in the herd. Quote Link to comment Share on other sites More sharing options...
Orb Posted December 21, 2023 Share Posted December 21, 2023 4 hours ago, TenerifeSea said: Some serious demand will be coming to the table if rates are cut significantly. Not if unemployment hits 10%+, and therefore wage deflation, in the coming recession. Quote Link to comment Share on other sites More sharing options...
17 Year Veteran Posted December 21, 2023 Share Posted December 21, 2023 13 hours ago, BaldED said: Righto....What about the rest of the stuff you need to live? Shelter, energy, health, repairs, amenities, travel.... If you're going to talk balls at least back it up. And please do show me receipt a from 12 months ago to today that shows this deflation is infact not made up crap in your head. The person who believes the official figures is not usually the one who needs to “back it up”. Quote Link to comment Share on other sites More sharing options...
staintunerider Posted December 21, 2023 Share Posted December 21, 2023 (edited) 13 hours ago, DownwardSlopingPlateau said: Rates are going to plummet by less than 1%. That's victory for certain folks on this forum. 😉 Boiling frogs to only slightly boiling frogs... The joke is these are not even high rates.....the problem is house prices today are at peak ponzi because of insane lending 99 onwards(liar loans etc etc etc) come the BUST....oh no what can we do ? hey lets double down on STUPID....lowest rates in what 300 years? ....credit boilers whacked up to full.......govt scheme abound....HTB...BTL who should never have been allowed near borrowed money! So your house price today is built on all that **** Unless all that **** comes back your house price is going to roll back to credit availability and affordability....and beyond because markets always overshoot...just wait until negative equity abounds....that is already starting and and its only just started.....bad purchase eg overpaid...cladding.....massive increasing leasehold costs....2nd hand new builds competing with builders...good luck with that.... BTL is going to unwind releasing a lot of stock...Airbnb as well and many many other things... Edited December 21, 2023 by staintunerider Quote Link to comment Share on other sites More sharing options...
staintunerider Posted December 21, 2023 Share Posted December 21, 2023 8 hours ago, TenerifeSea said: The stars are aligning for a house price boom in 2024/25. Stewy has been calling it for a while to much ridicule from the rest of the forum. House prices have been falling in real terms for a while now and in that time the population has increased to the order of a million extra people. The market has been going sideways for the best part of 18 months while mortgage rates have surged. Rates have now stabilised and will be coming down in the near future. Some serious demand will be coming to the table if rates are cut significantly. House price inflation may even be the tool that saves the country from a deflationary trap. The best time to buy may well have passed. What a clueless load of guff! Quote Link to comment Share on other sites More sharing options...
staintunerider Posted December 21, 2023 Share Posted December 21, 2023 (edited) 16 hours ago, Social Justice League said: It's not venomous rage towards homeowners. It rage towards the bent financial system and those who borrow worthless fiat to facilitate it. Borrowing a 40 year loan doesn't make you a home owner. You only 'own' the home until you've paid back the principle loan plus all the interest. Renting a property from the 'bank' for 40 years, being responsible for all the repairs and upgrades is grabbing the sh1t end of the stick. Everyone knows this who has half a brain. Made me realise those who have half a brain are probably about 1 in 10..... What most of these in the 90% range don't realise, is we are now staring a likely very very significant correction down the barrel, this means even worse than what you described above for a very simple reason. If someone or someones have borrowed a **** ton of money to buy an asset that is in the very near future going to be viewed as having been at or in the upper range of peak pricing....and a correction occurs....not only is everything you write above correct.....they are going to be slaving away to pay the peak or near peak price they paid or bankrupted should they not be able to continue....they are almost certainly going to be in negative equity quite quickly with all the debt obligations they took on to make the peak price purchase. Number 1 and Number 2 catalysts of realising a housing loss as per the 90's 1) Relationship Breakdown 2) Job Loss of 1 or 2 Jobs The worst of these is Number 1, often you will get another job...folk often go through many jobs even without a job loss...eg they move jobs... Work abounded in the 90's.....what didn;t was house price inflation.....what did abound was relationship breakdown Any respite in the short term lowering (by a marginal amount less than 1.0 prob 0.5/0.75) of the base rate will, if it likely turns out we are now heading into a multi decade higher interest rate environment(not even taking black swans into account) will be short lived.....you can just have your real estate crash fast or slow...but a real estate crash is what you are going to get.... TPTB prob know it...but they don't like scaring the frogs because the frogs then get angry! So they will do what they can to reassure said frogs until it all becomes patently clear! By then it will probably be Starmer and he can blame it all on the tories..and he's to be fair got a good case., they are the ones in power the last 13 years and blew bubble 2 on Zirp after it was all deflating back in 2010! Labours bubble was 99-08 and was correcting during Gordon Browns premiership Edited December 21, 2023 by staintunerider Quote Link to comment Share on other sites More sharing options...
Stewy Posted December 21, 2023 Share Posted December 21, 2023 11 minutes ago, staintunerider said: What a clueless load of guff! When is the population going to start falling then? Quote Link to comment Share on other sites More sharing options...
staintunerider Posted December 21, 2023 Share Posted December 21, 2023 (edited) 8 minutes ago, staintunerider said: Made me realise those who have half a brain are probably about 1 in 10..... What most of these don't realise, we are now staring a likely very very significant correction down the barrel, this means even worse than what you described above for a very simple reason. If someone or someones have borrowed a **** ton of money to buy an asset that is in the very near future going to be viewed as peak pricing....and a correction occurs....not only is everything you write above correct.....they are going to be slaving away to pay the peak price they paid or bankrupted should they not be able to continue.... Number 1 and Number 2 catalysts of realising a housing loss as per the 90's 1) Relationship Breakdown 2) Job Loss of 1 or 2 Jobs The worst of these is Number 1, often you will get another job...folk often go through many jobs even without a job loss...eg they move jobs... Work abounded in the 90's.....what didn;t was house price inflation.....what did abound was relationship breakdown And one more thing the bottom in the 90's was circa 92 (as it turned out) (we didn't know)...there was an event circa 92/93....a currency crisis....rates doubled overnight....they managed to right the ship and those rates were a blip and dropped back down... If they had not righted the ship I can assure you the slump bottom in prices would havedropped another 50% taking prices back to the 70's not the 80's....the 70's.. I sat on my (mortgaged) doorstep of my newly purchased repo off the building society...a 50% discount of it's 89 pricing...thinking ..." well that's it"....and i am sure i wasn't alone.... All coming again to a real estate market near you! This govt is skating on thin ice as it is....there will be a correction regardless but these turkeys like CamMoron and Sunak et al, Starmer.....are all too likely with all their idiotic posing around extremely likely to make it all much much worse.....black swan event i mean or many black swans.....the effect that can have on the fiscal state of the UK is tremendous....and instant..... They should have used low rates to let the air out and it adjust nominally to circa 3 times salary...nah they went full whacko job more than they went before..... Edited December 21, 2023 by staintunerider Quote Link to comment Share on other sites More sharing options...
ExeC-UK Posted December 21, 2023 Share Posted December 21, 2023 (edited) 12 hours ago, Flat Bear said: China has always been the Elephant in the room and I have first hand experience of massive deflation in Chinese export prices. This coupled with the collapse in shipping costs. To put this one point into perspective, I am finding "some" prices of manufactured products as much as 30% down from the height and container costs that would cost me over $12000 dollar have now dropped to $600 It's not just China. I'm a director of a transport brokerage and we handle a lot of containers, mainly from China, USA & Turkey. Shipping costs have dropped around 90-95% for containers from China & around 70% from Turkey. We were quoting Rates port to port of $16000 for Chinese 40ft HC containers in 2020, and are now able to offer rates of around $550-650. We were quoting figures of £2000 for a container from Turkey (port to port) and are now offering these at around £500. During the 2020/21 increases we also noticed increases in customs clearance duties / taxes payable due to increased suppliers costs. Even customs clearance work was seeing a 30-50% increase. Now im seeing the opposite, suppliers invoices for identical goods are lower, clearance firms are laying off workers and lowering their clearance rates to compete and shipping lines are scrambling to offer the lower rate for their excess container stock. The decreases are as dramatic as the increases were and it took about 8-10 months to reflect on inflation charts, this lag will start to reflect on inflation figures mid next year. Combining this with the way energy is moving too, its one of the reasons I can see interest rates dropping faster and sooner than expected (im not an advocate of low rates and think it destroyed our housing market). On a side note, we are currently seeing approximately 40% reduction in transport work. Edited December 21, 2023 by ExeC-UK Quote Link to comment Share on other sites More sharing options...
hotblack42 Posted December 21, 2023 Share Posted December 21, 2023 4 hours ago, markyh said: This is nothing. A 425w Solar Panel that we actually purchase and fitted to customers homes in February 2023 and December 2023 has dropped wholesale from £130 panel in February to £61 a panel now in early December 23, and has now dropped again to £55 a panel. In September 2022 the previous 400w model was around £70 a panel. So will the Sussex installers I approached in 2022 who completely ignored me, or quoted £20k for a branded battery backed system that I had seen for £12.5K up North, now be prepared to have a sensible conversation involving a price that doesn't involve them lighting a cigar and booking a luxury holiday? A price that enables the system to wash its face? We don't have power cuts or an EV to charge, this is 100% about saving money on an annual electricity bill of about £1250. Quote Link to comment Share on other sites More sharing options...
staintunerider Posted December 21, 2023 Share Posted December 21, 2023 2 hours ago, hotblack42 said: So will the Sussex installers I approached in 2022 who completely ignored me, or quoted £20k for a branded battery backed system that I had seen for £12.5K up North, now be prepared to have a sensible conversation involving a price that doesn't involve them lighting a cigar and booking a luxury holiday? A price that enables the system to wash its face? We don't have power cuts or an EV to charge, this is 100% about saving money on an annual electricity bill of about £1250. As you have correctly guessed that deflation in the cost of the materials won't be passed onto the customer....just straight into the pocket of Mr Ripoffe... Amazing how folk latch onto something like the cost reduction of an item and use it to spin a yarn that suits their narrative right in the face of the actual reality on the ground! Quote Link to comment Share on other sites More sharing options...
dugsbody Posted December 21, 2023 Share Posted December 21, 2023 On 20/12/2023 at 12:49, fellow said: Nope. What's causing inflation to fall will also cause house prices to fall. 🤦♂️ Quote Link to comment Share on other sites More sharing options...
cdd Posted December 21, 2023 Share Posted December 21, 2023 17 hours ago, TenerifeSea said: The stars are aligning for a house price boom in 2024/25. Stewy has been calling it for a while to much ridicule from the rest of the forum. House prices have been falling in real terms for a while now and in that time the population has increased to the order of a million extra people. The market has been going sideways for the best part of 18 months while mortgage rates have surged. Rates have now stabilised and will be coming down in the near future. Some serious demand will be coming to the table if rates are cut significantly. House price inflation may even be the tool that saves the country from a deflationary trap. The best time to buy may well have passed. Stewy backing himself up with his 2nd forum account. Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted December 21, 2023 Share Posted December 21, 2023 On 20/12/2023 at 12:11, winkie said: You live in your utopia land......high wage rises fuel inflation, what is good about a place where those that can will and those that can't will not because they can't. Do they? How is it that inflation took off before wage rises and now inflation is falling despite wages lagging and rising to catch up? Maybe high inflation fuels wage rises? Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted December 21, 2023 Share Posted December 21, 2023 On 20/12/2023 at 14:10, Warlord said: I bought some Birdseye chicken the other day it was TASTELESS. And it was like £3+ Ah well, I believe your official figures on inflation rather than the rigour and methodology the ONS puts into it. Anecdote really does trump facts. 🤡 #sarcasm Quote Link to comment Share on other sites More sharing options...
Social Justice League Posted December 21, 2023 Author Share Posted December 21, 2023 27 minutes ago, cdd said: Stewy backing himself up with his 2nd forum account. 😆 Quote Link to comment Share on other sites More sharing options...
markyh Posted December 21, 2023 Share Posted December 21, 2023 11 hours ago, hotblack42 said: So will the Sussex installers I approached in 2022 who completely ignored me, or quoted £20k for a branded battery backed system that I had seen for £12.5K up North, now be prepared to have a sensible conversation involving a price that doesn't involve them lighting a cigar and booking a luxury holiday? A price that enables the system to wash its face? We don't have power cuts or an EV to charge, this is 100% about saving money on an annual electricity bill of about £1250. Yes, if they don't want to go bust, 2022 was an extraordinary time, huge demand and huge shortages of everything. The current rough retail guide price for installed prices is £1200 per kWp for panels and £600 per kWh of batteries. So roughly 5.1 kWp of panels (12 x 425w) and 6 kWh of batteries should be about £9720 installed. Becasue of huge disparity in wages between Sussex and N/E / N/W wages, and the huge cost of traveling and accommodation from North to South, you will never ever get Northern Installation prices down south. Expect this formula to be weighted something like £8500 up North and £10500 down South. You only really see this guide come accurate in the cheaper parts of the Midlands , Staffs, Notts, Derby , Lincolnshire, move further North it gets cheaper, to the Scottish borders move south it gets more expensive. Scotland and Cornwall are generally on par with the S/E prices. FYI Scotland has the same problem, their installs are on price parity with the South as they cant tempt the Northern installers up to them either. Quote Link to comment Share on other sites More sharing options...
winkie Posted December 22, 2023 Share Posted December 22, 2023 8 hours ago, Unmoderated said: Do they? How is it that inflation took off before wage rises and now inflation is falling despite wages lagging and rising to catch up? Maybe high inflation fuels wage rises? Because QE did the same thing then as wage rises are doing now, wage rises the substitute......the question is how are these wage rises being supported, supported by more debt.......it is not higher productivity? Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted December 22, 2023 Share Posted December 22, 2023 4 hours ago, winkie said: Because QE did the same thing then as wage rises are doing now, wage rises the substitute......the question is how are these wage rises being supported, supported by more debt.......it is not higher productivity? In a global economy it's global productivity that matters. You can pump more money into UK but that money can be spent on an ever increasing and competitive market for imports. Wage rises are catch up and people with key skills are in high demand. I'd suggest the biggest risk to inflation is our dumb AF income tax regime where people are choosing to work fewer hours at £100K (in theory the highest skilled people withdrawing labour) since it isn't worth working so hard to lose 62% of your marginal salary. Quote Link to comment Share on other sites More sharing options...
winkie Posted December 22, 2023 Share Posted December 22, 2023 22 minutes ago, Unmoderated said: In a global economy it's global productivity that matters. You can pump more money into UK but that money can be spent on an ever increasing and competitive market for imports. Wage rises are catch up and people with key skills are in high demand. I'd suggest the biggest risk to inflation is our dumb AF income tax regime where people are choosing to work fewer hours at £100K (in theory the highest skilled people withdrawing labour) since it isn't worth working so hard to lose 62% of your marginal salary. 'Key skills high demand'.......we should be training people to be highly skillful, don't keep the knowledge to yourself..... people can fill the gaps, if we don't do it global migration will for less money...... Quote Link to comment Share on other sites More sharing options...
yodigo Posted December 22, 2023 Share Posted December 22, 2023 45 minutes ago, winkie said: 'Key skills high demand'.......we should be training people to be highly skillful, don't keep the knowledge to yourself..... people can fill the gaps, if we don't do it global migration will for less money...... +1 Quote Link to comment Share on other sites More sharing options...
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