Jump to content
House Price Crash Forum
Sign in to follow this  
deano_54321

The Hpc Graph - Whats Happening This Time?

Recommended Posts

Hi HPC Friends,

Just a quick simple question -

When I first visited HPC about a year ago, the graph showing the previous crashes was the most visual thing that mad me think "I need to keep an eye on this before I decide to buy!"

The graph made me think that a crash was inevitable, and I still think it is.

However, can anybody explain what is different this time? In previous crashes it ahas been a simple "Peak" then "Crash". However this time we seem to be seeing a stagger where prices are staying stable overall. Is this the soft landing we didnt want? I would be interested to hear you views!

Thanks, Dean

Edited by deano_54321

Share this post


Link to post
Share on other sites

Hi HPC Friends,

Just a quick simple question -

When I first visited HPC about a year ago, the graph showing the previous crashes was the most visual thing that mad me think "I need to keep an eye on this before I decide to buy!"

The graph made me think that a crash was inevitable, and I still think it is.

However, can anybody explain what is different this time? In previous crashes it ahas been a simple "Peak" then "Crash". However this time we seem to be seeing a stagger where prices are staying stable overall. Is this the soft landing we didnt want? I would be interested to hear you views!

Thanks, Dean

Depending on your opinion it's either a stagger indicating a soft landing, or a double-top indicating an imminent fall. Until we see what happens next we just don't know.

Share this post


Link to post
Share on other sites

Its tricky to say since there is so much more interference in this country with the house price economy, but in Sydney they dropped 10% and pretty much stayed their for 6 months before going into freefall. That stagnant period was when one of my mates got out (quite p!ssed that he missed the top, but there you go, he wasn't ready to sell cos he loved the house, but it was difficult to make ends meet). He got back in when, all things added into the equasion, he could buy at the same cost as he could rent. He could have waited longer and got a better bargain. So he's lost money in the next round of freefall? He doesn't care. Its his home.

Share this post


Link to post
Share on other sites

However, can anybody explain what is different this time? In previous crashes it ahas been a simple "Peak" then "Crash". However this time we seem to be seeing a stagger where prices are staying stable overall. Is this the soft landing we didnt want? I would be interested to hear you views!

If the graph was based on the true rate of inflation rather than the government's rigged rate it would show a more pronounced fall. There are also distortions in Nationwide's index which cause it to overstate current house prices. I suspect some of those distortions to be greater this cycle than last (e.g. new build discounts, cash purchases). Interest rates are lower and so the correction is likely to take longer.

Share this post


Link to post
Share on other sites

IMO one thing... historically low interest rates...

With low intrest rates and easy credit, people who are struggling can take out bigger loans to service debts, people will live on credit cards for longer getting further into debt, debt is growing at 10% per year. This isnt sustainable but IMO caused the gradual falls/leveling.

Japan also has low (0%) interest rates, and have seen falls for the past 15 years, some of the time these falls were gradual.

Edited by moosetea

Share this post


Link to post
Share on other sites

The problem with the graph is that the statistics upon which it is based comes from a VI. If it was based on Rightmove we would see the mountain slope rising forever at a very sharp incline :lol:

The "double top" or twin peaks usually indicate a sharp correction is to follow as the last attempt at a rally coulod not be sustained.

IMO one thing... historically low interest rates...

With low intrest rates and easy credit, people who are struggling can take out bigger loans to service debts, people will live on credit cards for longer getting further into debt, debt is growing at 10% per year. This isnt sustainable but IMO caused the gradual falls/leveling.

Japan also has low (0%) interest rates, and have seen falls for the past 15 years, some of the time these falls were gradual.

Not so sure about low IR. IN the last few years of the bubble effective IR have been at their highest ever. Looking at price to debt ratios the enormous size of the loans being taken out have outweighed any advantage to notionally low rates. What has happened is that lenders have contniued to lower their standards to keep the money flowing and Brown has obliged by keeping the cash tap on full blast to keep the "economic miracle" going. We are seeing increasingly riskier lending going on with the latest news that many VIs are allowing up to 10 BTL loans once again. They know that once momentum grinds to a halt it will be impossible to restart HPI again until after the crash has finished its work.

Share this post


Link to post
Share on other sites

What's different?

Partly "property porn" on TV & a concerted effort by the VI's has convinced many that prices are sustainable and "fair". As a result they could bounce around the peak for a little while until people see the true situation.

Share this post


Link to post
Share on other sites

can anybody explain what is different this time?

Relatively benign economic conditions - so far, there hasn't been an event (or series of events) to trigger a crash.

Share this post


Link to post
Share on other sites

The problem with the graph is that the statistics upon which it is based comes from a VI. If it was based on Rightmove we would see the mountain slope rising forever at a very sharp incline :lol:

That's a good idea, (imo) making a VI graph will be a quiick visual aid as to how inaccurate they are.

Also highlighting how incredibly thick, they think the public is!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.