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The Psychology Of The Uk Property Market


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Interesting chart, seems to me that the masses can only accept what they can actually see at the time, going against the crowd is difficult, I myself have days when I doubt ths HPC will happen, I think it will take a while yet to get in full swing, maybe even the indexes showing a neg growth ...... I think by this time next year it'll be in full swing :)

Buying when everyone is doom and doom will be difficult though!

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As usual there will be denial all the way down to the bottom; Panic will only really set in at the bottom. The graph is an excellent depiction of this immutable human truth.

Some unexpected event will be seen as the trigger to the HPC. However the bubble has begun to burst of its own accord.

For the technically minded;

Look to the "USD dollar" as confirmation of this.

If the USD starts to rally along with a sell off in treasuries I think this will confirm the HPC. This will signal that credit it tightening. Such a move has the potential to destroy leveraged players (Hedge Funds)as they are all on this ONE WAY BET(weakening USD). This has the potential to be a global housing crash.

The UK bond yield curve is inverted signaling a recession within 12 months.

A good idea would be to get out of debt and into cash to best take advantage of coming events.

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As usual there will be denial all the way down to the bottom; Panic will only really set in at the bottom. The graph is an excellent depiction of this immutable human truth.

Some unexpected event will be seen as the trigger to the HPC. However the bubble has begun to burst of its own accord.

For the technically minded;

Look to the "USD dollar" as confirmation of this.

If the USD starts to rally along with a sell off in treasuries I think this will confirm the HPC. This will signal that credit it tightening. Such a move has the potential to destroy leveraged players (Hedge Funds)as they are all on this ONE WAY BET(weakening USD). This has the potential to be a global housing crash.

The UK bond yield curve is inverted signaling a recession within 12 months.

A good idea would be to get out of debt and into cash to best take advantage of coming events.

'A good idea would be to get out of debt and into cash to best take advantage of coming events.'

Surely thats what all experienced LL's have done.

The amateur investor IS going to struggle. The LLs who started in 2000 who think the market will always rise, the ones who don't have a regualr income. The ones who have put all their eggs in one basket etc will fail.

And, now we know that the crash will take all of them how are you going to deal with the many of that survive??

Are we going to slag them off and not beleive that they carried it through?

Could they possibly have survived?

And so they will.... just like 1991.

You lot make me laugh. This is investment. It's a roller coaster. If you can't take the loss don't enter in the beginning.

You dollies that think it will always go up, look at the bond performances, take your chances on those. Take a chance on anything. But the best thing newbie investors can do is stick your MBNA money where it's the cheapest; back with MBNA.

What's upped this market is a load of idiots watching 'Changing Rooms' and 'Homes under the Hammer' - it turns a 'Trisha' fan in to a property developer- without a clue or budget. Funny, their both fighting for the same slot!

Dearie, dearie me.

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As usual there will be denial all the way down to the bottom; Panic will only really set in at the bottom. The graph is an excellent depiction of this immutable human truth.

Some unexpected event will be seen as the trigger to the HPC. However the bubble has begun to burst of its own accord.

For the technically minded;

Look to the "USD dollar" as confirmation of this.

If the USD starts to rally along with a sell off in treasuries I think this will confirm the HPC. This will signal that credit it tightening. Such a move has the potential to destroy leveraged players (Hedge Funds)as they are all on this ONE WAY BET(weakening USD). This has the potential to be a global housing crash.

The UK bond yield curve is inverted signaling a recession within 12 months.

A good idea would be to get out of debt and into cash to best take advantage of coming events.

Don't follow that a bit about the USD rallying and a sell off in treasuries??

a sell off in treasuries is likely to weaken the dollar - the sell off can only really come from the big Asian holders and it would flood the market with US dollars and imply a shift in asset allocation and a swift decline in the USD surely??

As for inverted UK Yield curve. inverted is indeed a 12-18month prior predictor of a recession. in fact it has occurred in every US recession and is the best sole indicator around. Bit I wonder whther the the long end buying gilts by pension fund etc to match their liabilties as they re-allocate away from equities is impacting the yield curve significantly and hence it is not a real signal beccause of these circumstances??

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Don't follow that a bit about the USD rallying and a sell off in treasuries??

I know what you mean, it sound illogical. But simply it would imply liquidation of debt. People paying off debt and finally starting to save!!! Most debt is in USD and many mortgages around the world are piggy backed on treasuries (as they are is Australia).

This also applies to asian holders.

I agree that what I am expecting is extreme but who would have expected the suprise to the upside, namely the explosion in debt. Perhaps we will now experience a suprise to the downside.

Treasuries at the long end could rally even further, I totally agree. But if we are witnessing an event and global panic even they may come under some pressure. Surely the spread with corporates would increase as they did in 2002.

I expect the bubble to deflate either way, my point being that a treasury sell off would make the event even more disasterous!

This downturn could be greater than 1991 simply because then we had inflation to "eat up" the fall in prices. The rate inflation that we have now is lower.

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This downturn could be greater than 1991 simply because then we had inflation to "eat up" the fall in prices. The rate inflation that we have now is lower.

This is indeed an excellent point. With inflation running as low as it currently is, the risk of general deflation as a result of a housing crash is much higher than it has been for over 60 years.

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Interesting thread. Why denial? PRIDE. There is a lot of psychology that attaches to markets where a great deal of money is to be made and lost. Denial is a form of pride as the human mind finds it difficult to relate to circumstances that are unplanned and, at worst, potentially catastrophic to one's life circumstances. It can become a form of mass psychosis in property markets and is the very thing that causes the actual crash when it comes. Truly, truly I say unto you, pride comes before the fall......the Bible is a great source of wisdom!

There is also the "herd" mentality that characterizes markets. The herd moves together and in a bull market it just takes a little prodding with interest rates and "blue skies" reports that promise guaranteed profits for ever. When the herd reaches the precipe (dictated by the fundamentals--p/e ratios is the big one) the stampede comes to halt with the forward members (the high priced homes in high priced areas) reaching the precipe first. The other members of the herd start to bump into those at the front (confusion in the marketplace--spin from EA's actually exacerbates the situation by causing more confusion with conflicting stories and exaggerated claims together with foolish predictions that are out of line with the fundamentals). The members too close to the edge of the precipe start to fall into the abyss (homeowners who MUST sell due to personal circumstances) as others look on in bewilderment at what is happening (members are not used to seeing other members lose money on their homes). Confusion starts to turn into panic and more members fall over the edge. Then those who are left behind jump too as they begin to indentify with the reality and can no longer sustain themselves at the edge of the cliff with no herd to protect or pacify them.

If you examine "The Chart" you see the repeating pattern. never a gentle fall but always a "going over the edge of a cliff" scenarion: http://www.housepricecrash.co.uk/forum/ind...type=post&id=47

CONCLUSION: Pride will be this current market's undoing--it has never been any different.

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The link doesn't work.

Here is the link again, for "That Chart" (the classic 50 year history):

http://www.housepricecrash.co.uk/forum/ind...type=post&id=47

I have sent this to a large number of EA's, newspapers where I know the business editors etc. Many find it a chilling and stark warning of what is to come. :lol:

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What happened to the link to "That Chart" --the one showing the 50 year history of booms and busts? I am glad I downloaded it and printed it out--it has been emailed to every VI and newspaper I can think of (in California as the cycyle seems to be indentical with the same time frame and percentage changes)! Hope it was an accurate graph. Anyone got another one?

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Is this the one you're looking for RB?

Thanks ZZG113--that's the one. Seems this chart is predicting a 60% fall from the peak given the pattern of the past (trough = 50% of previous spike). Back to where we were in about 1999? :rolleyes:

The thing we learn best from history is that we do not learn from history (sic), Hegel.

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Thanks ZZG113--that's the one.  Seems this chart is predicting a 60% fall from the peak given the pattern of the past (trough = 50% of previous spike).  Back to where we were in about 1999?   :rolleyes:

The thing we learn best from history is that we do not learn from history (sic), Hegel.

There was a lengthy discussion about this graph a while back. I reckon a 52% fall.

http://www.housepricecrash.co.uk/forum/ind...wtopic=3965&hl=

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  • 439 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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