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JohnG

What Is A 'crash'?

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OK, this one's half genuine question and half Devil's Advocate.

I get the feeling that there are as many definitions of 'crash' as there are active posters on this forum.

Which of these constitutes a crash -

1) 10% nominal price drop in 12 months (+4% wage inflation = 14% 'real')

2) Price stagnation for 5 years (4% wage inflation x 5 = 20% 'real')

3) Prices going back to where they were 1, 2, 3, or n years ago.

I don't believe any of the above would concern most home 'owners' or landlords.

For those of you wanting to see a 'crash' can you define what you want in terms of each of the above ('nominal', 'real' 'set back n years').

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OK, this one's half genuine question and half Devil's Advocate.

I get the feeling that there are as many definitions of 'crash' as there are active posters on this forum.

Which of these constitutes a crash -

1) 10% nominal price drop in 12 months (+4% wage inflation = 14% 'real')

2) Price stagnation for 5 years (4% wage inflation x 5 = 20% 'real')

3) Prices going back to where they were 1, 2, 3, or n years ago.

I don't believe any of the above would concern most home 'owners' or landlords.

For those of you wanting to see a 'crash' can you define what you want in terms of each of the above ('nominal', 'real' 'set back n years').

I think option 2's most likely and, aside from 89-94, this was the usual way of the market correcting.

Of course wage inflation is much lower these days, so I think it could well take 5 years.

A number of properties around my way haven't achieved asking price but, instead of them being reduced the owners have converted them to BTL and bought anew.

Edited by Casual Observer

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Guest wrongmove

In stock market talk, 10% nominal is a correction, and 20% nominal is a crash.

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  • 302 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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