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doog

Where's The Evidence?

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ok, im a FTB, been locked out of the housing market now for quite a while and still very frustrated. Ive been visiting this forum now for the last few weeks and have not yet seen any compelling evidence why a crash in house prices is around the corner. What i do see as are lot of people with quite a large emotional investment in a crash (and believe me, i do too!) but very little on the ground that points to an actual crash happening.

Personally, i cannot understand how house prices continue to go up (and all indicators tend to point this way) given the phenemonal level of personal of debt in this country, the high oil prices, the potential for the US housing market to burst (US treasury has been steadily raising interest rates) etc etc.

I keep telling myself that central to a capitalist economy are boom and busts (and the housing bubble really does need to bust!) and yet this bust really is taking a very long time to come...! I am thinking about buying the next year or so, but really do not want to saddle my family in negative equity for a decade or longer.

So my question(s) are: aside from the desire for a house price crash, what is the compelling evidence that one is likely AND what, in the final instance, are the factors that continue to prolong this current bubble?

thanks.

Doog..

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ok, im a FTB, been locked out of the housing market now for quite a while and still very frustrated. Ive been visiting this forum now for the last few weeks and have not yet seen any compelling evidence why a crash in house prices is around the corner. What i do see as are lot of people with quite a large emotional investment in a crash (and believe me, i do too!) but very little on the ground that points to an actual crash happening.

Personally, i cannot understand how house prices continue to go up (and all indicators tend to point this way) given the phenemonal level of personal of debt in this country, the high oil prices, the potential for the US housing market to burst (US treasury has been steadily raising interest rates) etc etc.

I keep telling myself that central to a capitalist economy are boom and busts (and the housing bubble really does need to bust!) and yet this bust really is taking a very long time to come...! I am thinking about buying the next year or so, but really do not want to saddle my family in negative equity for a decade or longer.

So my question(s) are: aside from the desire for a house price crash, what is the compelling evidence that one is likely AND what, in the final instance, are the factors that continue to prolong this current bubble?

thanks.

Doog..

Noone can predict with complete certainty what is going to happen to house prices - or for that matter anything else at all. As the physicist Niels Bohr said "Making predictions is difficult, especially about the future".

You yourself have identified quite a few indications that prices seem most likely to come down: the house market is cyclical; FTBs have been priced out; high debt makes people vulnerable to credit tightening and IR rises; and inflation coming through the system. Do these convince you? What do you see as the balance of risks involved in buying now?

That said, these days the forum does not debate the fundamental arguments that much - you might like to look in "the classics" forum and you might find more dicussion of the kind you are seeking there.

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If you haven't bought yet in this market you are in a win win situation.

If prices go down, you win you might decide to purchase at the right price.

If prices go up, you win you don't want to be stuck with a property you are unable to sell.

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Guest Winners and Losers

If you haven't bought yet in this market you are in a win win situation.

If prices go down, you win you might decide to purchase at the right price.

If prices go up, you win you don't want to be stuck with a property you are unable to sell.

Or in negative equity, or struggling to pay a huge mortgage when IR's rise. Look to Australia.

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So my question(s) are: aside from the desire for a house price crash, what is the compelling evidence that one is likely AND what, in the final instance, are the factors that continue to prolong this current bubble?

thanks.

Doog..

Doog. Welcome. 100% admit to VI status. and am also putting quite a strong store in the observable historical belief in capitalism as a boom bust cycle.

There is no such thing as firm evidence, and if you will see the thread from right move, there is really no such thing as believable evidence. Somebody posted at some stage the staged in the last crash. It was not till the market had hit rock bottom that Halifax I believe it was started to become bearish. Obviously if you had believed Halifax you would have lost money on rising prices.

The one thing I will say is that it takes the determination not to throw your money away on property if it doesn't make sense to do so. So to some degree for me its neither here nor their whether it crashes. Its whether it makes sense.

I did a little count of the next Allsop auction last night and no less than 47% of the listings appear to be forced sales. That seems a little high for anything other than 'interesting' times. But then it could just be more false hope:

http://www.housepricecrash.co.uk/forum/ind...topic=25811&hl=

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To quote the current chancellor

Most stop-go problems that Britain has suffered in the last 50 years have been led or influenced by the more highly cyclical and often more volatile nature of our housing market

Print a copy of this graph and stick it on your wall...

Recessions_and_the_housing_cycle.GIF

post-1529-1142283400.gif

Edited by BandWagon

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I don't have a vested interest in a HPC. I'm fortunate and could buy a house tomorrow. This sustained market is nothing other than a response to artificially low interest rates. The evidence is all around you. House prices have slowed to near stalling point. Think of it as a car running out of petrol as it climbs a hill.

Edited by Xurbia

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To quote the current chancellor

Print a copy of this graph and stick it on your wall...

cool graph BW. i dont suppose you could give me the dates that the uk went iton recession either q's or months and years (obvioysly) cheers :D

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cool graph BW. i dont suppose you could give me the dates that the uk went iton recession either q's or months and years (obvioysly) cheers :D

I can give you dates from Christopher Dow(deceased), previous Economic adviser to the UK Treasury, and Executive Director of the Bank of England.

Using the simple and commonly accepted condition that recessions are deemed to start after 2 quarters of negative growth:

Growth in the UK turned negative in the 3rd Q of 1973, so the recession started around the 2nd Q 1974, and lasted till the 2nd Q 1975.

Growth again turned negative in 3rd Q 1979, so the recession could be said to being 2nd Q 1980, and lasted until 2nd Q 1981.

I can't find the exact dates for the 90's recession,the economy slowed in 90, and growth turned negative in 1991 and positive again in 92.

Edited by BandWagon

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  • 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%



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