How Far From Peak To Trough?

[Qetesuesi]

In percentage terms, or more dramatically, giving absolute high-low prices.

Oh, and also how long between them.

[Qetesuesi]

Amazing how people are perfectly willing to volunteer their opinions on this passim in various threads, but haven't done so on a thread dedicated to it.

[pondlife]

Amazing how people are perfectly willing to volunteer their opinions on this passim in various threads, but haven't done so on a thread dedicated to it.

My rather unspectacular guess is 20% - However there is a risk it could be 40-50% (recently in some areas of Japan it was 80% !)

[IamSpartacus]

In percentage terms, or more dramatically, giving absolute high-low prices.

Oh, and also how long between them.

In nominal terms... 15% - 20%, over the next 4-5 years.

Wouldn't bet anything important on that prediction though. Like a house.

[Willy Weasel]

Assuming the average house price peaks at £200,000, I think the average price in three years time will be £170,000.

[Hairlocks]

My guess is the average house price will be 2.8x average earnings at the bottom.

[Charlie Don't Surf]

Peak is now and I think we will see a 40-50% drop in (real term) values over the next 3-4 years.

Problem with this thread is who is going to read it and say I was correct in 4 years time!

[Qetesuesi]

My rather unspectacular guess is 20% - However there is a risk it could be 40-50% (recently in some areas of Japan it was 80% !)

Good point. Maybe I should of branched this question out to discuss specific areas, viz. London/SE, property types, whether or not it was a BTL, etc.

In nominal terms... 15% - 20%, over the next 4-5 years.

Wouldn't bet anything important on that prediction though. Like a house.

I.e. you wouldn't STR on the strength of your prediction? Anyway you've declared yourself a bull....

My guess is the average house price will be 2.8x average earnings at the bottom.

Which of course raises the further fascinating question of what av. earnings will be, if unemployment rises and/or more of us natives have to take up donkey work once the immigrants go home in a big downturn. Any thoughts about this?

Peak is now and I think we will see a 40-50% drop in (real term) values over the next 3-4 years.

Problem with this thread is who is going to read it and say I was correct in 4 years time!

Hopefully HPC will still be going then - only I've wondered how long its founders intend to keep it going once everyone knows that a crash has fully happened. Let's petition to make sure!

[DabHand]

Yeah its tricky to judge nominal falls in the face of uncertain future inflation rates. (Maybe even more so because the CPI is so arbitrary) I would go with the average wage comparison and say 2.25 times average salary.

[Guest Alright Jack]

In nominal terms... 15% - 20%, over the next 4-5 years.

Wouldn't bet anything important on that prediction though. Like a house.

I'd go along with that. Around 15% maybe, it will depend on how much the government can get away with in trying to monetise some of this debt.

[Bingley Bloke]

I can't give a percentage for actual prices, but I believe the average house price to average salary ratio will fall 50%. How much house price deflation is needed to achieve this depends on how much wage inflation there is.

[Son of Taeper]

My two cents worth……. We have peaked.

I reckon about 5 years to hit rock bottom, maybe less. I put my money where my mouth is and sold up last month. Reckon I timed it just right with the minus 1.2% drop Halifax came up with followed up by the IR hike. Even got me £50.00 on the premium bonds to boot. As I've said before though, I sleep with one eye open nowadays.

[Qetesuesi]

Yeah its tricky to judge nominal falls in the face of uncertain future inflation rates. (Maybe even more so because the CPI is so arbitrary) I would go with the average wage comparison and say 2.25 times average salary.

Now that's bold. I don't think it ever plummeted that low in the last slump - wasn't that about the 2.8 multiple mentioned earlier?

I'd go along with that. Around 15% maybe, it will depend on how much the government can get away with in trying to monetise some of this debt.

Which is jargon for hyperinflation, destroying savings (especially those of all the patient prudent wannabe FTBers on here). Just let them try - there'll be riots in Tunbridge Wells!

I can't give a percentage for actual prices, but I believe the average house price to average salary ratio will fall 50%. How much house price deflation is needed to achieve this depends on how much wage inflation there is.

"Wage inflation"? Never 'eard of it.

[Goat]

Real terms 50%, based on approx. 30% overvaluation plus 20% overcorrection as sentiment shifts to "property only ever goes down".

[right_freds_dead]

id settle for a steadier -30% within 2 years.

though i think they are more often than not 60% overpriced.

or to put it another way.

another 2% ON TOP of current IRs.

Edited August 8, 2006 by right_freds_dead

[Johnny]

I think the Peak was Q1 this year and now we will see a 40-50% drop in over the next 3-4 years in London and the South, other areas possibly an average of 25-40% drop.

House prices (Semi's) in my area are already showing a 23% drop on the house.co.uk site

[MarkG]

In real terms, 50-60% down on average, 80-90% down on 'executive apartments'. If a global recession doesn't knock oil prices back down, then probably 80% down on rural second homes where few people can afford to drive there every weekend due to petrol prices.

Followed by a bear market until the end of the world: which will probably be sometime between 2080 and 2150 as either bin Laden Jr slams an asteroid into Earth at 30 km/s, or the nanobots decide to turn it into raw materials.

[Qetesuesi]

Real terms 50%, based on approx. 30% overvaluation plus 20% overcorrection as sentiment shifts to "property only ever goes down".

Good point, allowing adjustment for the wonderful new mood that will undoutedly coalesce. The dinner-party mumpties will be all falling over themselves to pretend that they never really believed the "only ever go up" guff, and will naturally over-react the other way.

I'm just wondering what's gonna happen to all those property porn shows, not to mention their respective porn stars, YKWIM. I'll bet some folks on this forum (Mattsta, Marina?) are just itching to impale their heads on stakes....

id settle for a steadier -30% within 2 years.

though i think they are more often than not 60% overpriced.

or to put it another way.

another 2% ON TOP of current IRs.

You think that'll be necessary to do the necessary? BTW if a property's overvalued by 60% then it'll need a 37.5% cut to bring it back to normal.

In real terms, 50-60% down on average, 80-90% down on 'executive apartments'. If a global recession doesn't knock oil prices back down, then probably 80% down on rural second homes where few people can afford to drive there every weekend due to petrol prices.

Followed by a bear market until the end of the world: which will probably be sometime between 2080 and 2150 as either bin Laden Jr slams an asteroid into Earth at 30 km/s, or the nanobots decide to turn it into raw materials.

Great post. Still trying to figure out where fact ends and fiction begins. Perhaps we should start a new thread to discuss it

[Dr Doom]

80% in real terms. As a conservative estimate.

[Goat]

80% in real terms. As a conservative estimate.

Think that's going a bit far, suggests that the average £150,000 property will be worth £30,000.

[moneymad]

I think the Peak was Q1 this year and now we will see a 40-50% drop in over the next 3-4 years in London and the South, other areas possibly an average of 25-40% drop.

House prices (Semi's) in my area are already showing a 23% drop on the house.co.uk site

Home.co.uk, my area terraced are up 38%!

[OurDayWillCome]

Home.co.uk, my area terraced are up 38%!

My area -32%

[Qetesuesi]

Oh, I'm sooo looking forward to the eventual contributions from CO, BF, karen1000 and so on.

[Rachman]

I think the Peak was Q1 this year and now we will see a 40-50% drop in over the next 3-4 years in London and the South, other areas possibly an average of 25-40% drop.

House prices (Semi's) in my area are already showing a 23% drop on the house.co.uk site

you don't live in London do you ? So, the place where the wages are highest, where there is almost full employment, where there is a steady supply of money to and the financial centre of Europe is going to fall most (and also where prices are (relative to the rest of the country) at historical lows), where all the foriegn money comes in....

Try places where wages are lower, where multiples are stretched, where there is less workforce mobility, where the loss of one large employer will cripple a local economy, where young people already pay a larger percentage of their net earnings out ....

[i may be wrong, but I don't think there's any way on earth you could be right.... ]

[Cuckoo]

Think that's going a bit far, suggests that the average £150,000 property will be worth £30,000.

Simple , there won't be a crash! Wake up guys!! All these doom laden stats are paraded with beard stroking high mindedness, but the moment there is positive news it is all V.I spin! D'oh!

A kind of slowdown happened over the last couple of years in London, prices really didnt move much since 2003 until now so in real terms in some places you can get deals and they are somewhat better value.

You are all hopecasting the future, pretty badly it has to be said.

I remember the great crash of 2000 which we all waited for, following the stock market crash, and it never materialised ; and 2001 when it couldn't go any higher and the Euro was going to destroy Britains' credibility - the City was going to move to Frankfurt, remember? and then 9/11 was going to FINALLY turn prices.

Then in 2003 when the Iraq war was going to stoke up a good load of inflation and then you would clean up chepie repos. Oh dear. Then the great crash of 2004 & 5, eagerly awaited as well. They never happened.

Now its over 3 years later, in July 2006. The market is stable, the economy is growing, unemployment is down and immigration is up. Don't hold your breaths for a crash dudes