Why The Boom Is Unsustainable

[BufferBear Bitcoin Bull]

This article clearly illustrates the problems that hpi has caused for the younger generation. Hpi is simply bad for the majority but most just don't see this.

http://observer.guardian.co.uk/magazine/st...2045326,00.html

The artful lodgers

Stratospheric house prices mean even the bottom rung of the property ladder is out of reach for many. Carl Wilkinson meets the couch surfers and warehouse guardians who've found novel ways to save their rent

Sunday April 1, 2007

The Observer

Location, location, location goes the trite estate agent's mantra. But just what would you be prepared to do for the right location? Take this advert for a London flat posted last month: 'Excellent transport links, close to Archway tube (Northern line) and Holloway tube (Piccadilly line). Excellent bus routes, 15 mins from Central London.' It's a bargain, at just £75 per week. The catch? You sleep on the sofa.

[nohpc]

This kind of stuff is really starting to annoy me. Of course the boom is unsustainable. Prices cannot rise 20% per annum ad infinatum. However, property prices remaining at their current level for a few years is entirely sustainable, This is evidenced by the fact the property sales remain buoyant at the moment.

Nobody is suggesting that a continued boom in house prices is sustainable.

[DabHand]

This kind of stuff is really starting to annoy me.

"Kubler-Ross Grief Cycle"

[Guest DissipatedYouthIsValuable]

"Kubler-Ross Grief Cycle"

Hahaha

http://changingminds.org/disciplines/chang...kubler_ross.htm

Sets up a grief counselling training company.

[nohpc]

Who is saying a boom is sustainable then?

[THE BALD MAN]

This kind of stuff is really starting to annoy me. Of course the boom is unsustainable. Prices cannot rise 20% per annum ad infinatum. However, property prices remaining at their current level for a few years is entirely sustainable, This is evidenced by the fact the property sales remain buoyant at the moment.

Nobody is suggesting that a continued boom in house prices is sustainable.

A lot of VI's believe the boom never ends because they have never experienced a recession..

Surely prices are only sustainable if the economy stays in any reasonable sort of shape and cheap credit is freely available. However the cracks are starting to show all over the place. Taxes are rising to cover this problem. Cuts are occuring in services. Interest rates are rising.

Of course if there is any contraction in our financial services industry then the London hous emarket will be hit very hard.

On the global cedit front I am not sure how long cheap credit will be availble as sub prime lending problems increase.

[nohpc]

I don't think any VIs expect prices to go up 20% per year again for a very very long time.

[Guest Charlie The Tramp]

Who is saying a boom is sustainable then?

It appears that is the belief of the masses as I see it.

I went to look at some high quality second hand cars yesterday. The dealer told me that there is tons of money about as 90% of his sales are for cash. Most probably MEW I replied, wtf is MEW was his response.

[patprimer74]

However, property prices remaining at their current level for a few years is entirely sustainable,

I think you'll find that, almost invariably, markets either go up or go down - they don't stay level. In fact, markets tend to go to extremes in each direction and then 'correct'. Some would call it 'reverting to the mean' but my claim is a little simpler than that. I just think that it's in the nature of markets to always move in one direction or other, hit a barrier, then turn around.

Of course, it could be different, this time.

p

[Guest DissipatedYouthIsValuable]

I think you'll find that, almost invariably, markets either go up or go down - they don't stay level. In fact, markets tend to go to extremes in each direction and then 'correct'. Some would call it 'reverting to the mean' but my claim is a little simpler than that. I just think that it's in the nature of markets to always move in one direction or other, hit a barrier, then turn around.

Of course, it could be different, this time.

p

Yes, property is so scarce and necessary that prices can reach infinite levels and people will still buy.

Market saturation is a wonderful thing.

[laurejon]

The market is fuelled by high risk lending, lending that 12 years ago would have been termed criminal.

Stagnation theory, is well just that. We have never experienced it, the demand supply curve is just that, a curve.

So if you are living in hope that we will maintain current house price levels, in the face of increasing unemployment, lower wages, massive inflation of 10% pa, and interest rates ending the year at 8%, when many of the fixed rate mortgage deals expire, deals that were taken at 3%....................Then you should checkin to one of the new NHS Facilities, I hear the do some wonderfull work these days, in particular areas such as dementia.

[Guest DissipatedYouthIsValuable]

The market is fuelled by high risk lending, lending that 12 years ago would have been termed criminal.

Stagnation theory, is well just that. We have never experienced it, the demand supply curve is just that, a curve.

So if you are living in hope that we will maintain current house price levels, in the face of increasing unemployment, lower wages, massive inflation of 10% pa, and interest rates ending the year at 8%, when many of the fixed rate mortgage deals expire, deals that were taken at 3%....................Then you should checkin to one of the new NHS Facilities, I hear the do some wonderfull work these days, in particular areas such as dementia.

Although there may not be many NHS doctors under 40 years old available.

[laurejon]

Although there may not be many NHS doctors under 40 years old available

Not a bad thing, as the new arrivals under 40 appear to have been selected not on merit,hard work, and a passion for their work, but on political correctness, Bias, and a huge amount of class envy.

[Guest DissipatedYouthIsValuable]

Not a bad thing, as the new arrivals under 40 appear to have been selected not on merit,hard work, and a passion for their work, but on political correctness, Bias, and a huge amount of class envy.

How very Daily Mail.

I'm personally living in very cheap rented accommodation so that I can save.

At 34, I think it would be good to have the option of starting a family with reasonable expectations of their future.

Seeing the increasing gap between income rises and HPI, I see a few options to level this

1) Work in private sector medicine so that my income can keep up

2) Move to a country where wage increases and HPI are more attuned

3) Move to a country where I can utilise the (current) strength of the sterling exchange rate to buy a home outright

[dog]

This kind of stuff is really starting to annoy me. Of course the boom is unsustainable. Prices cannot rise 20% per annum ad infinatum. However, property prices remaining at their current level for a few years is entirely sustainable, This is evidenced by the fact the property sales remain buoyant at the moment.

Nobody is suggesting that a continued boom in house prices is sustainable.

A very foolish assumption! Prices have to keep going up or they will crash. There is no middle ground.

Many people are buying properties beyond their means. An increasing number of them are becoming forced sellers. Others can afford the property but don't need it for living in. As either of these two groups start selling up a downward trend will start. Once potential buyers spot a downward trend, people won't be able to sell property for love or money (unless the money is 40% of the old price).

[ChinaReader]

How very Daily Mail.

Isn't it!

Laurejon, anecdotally, the application process for medicine was still pretty rigorous when my peers were applying, so I think you can trust doctors 26 or over, imho. Of course, if you've got some more concrete evidence of the demise of good medicinal education in 1985, I'd love to see it.

3) Move to a country where I can utilise the (current) strength of the sterling exchange rate to buy a home outright

This doesn't narrow down your options much.

[Fancypants]

This kind of stuff is really starting to annoy me. Of course the boom is unsustainable. Prices cannot rise 20% per annum ad infinatum. However, property prices remaining at their current level for a few years is entirely sustainable, This is evidenced by the fact the property sales remain buoyant at the moment.

Nobody is suggesting that a continued boom in house prices is sustainable.

you must get very worried then, every time a survey comes out showing HPI still roaring ahead?

[HPC Convert]

How very Daily Mail.

I'm personally living in very cheap rented accommodation so that I can save.

Dont bother. You cannot hope to save enough to outpace HPI. Either rent and be happy or buy now and face ruin.

[Bini]

Once potential buyers spot a downward trend, people won't be able to sell property for love or money (unless the money is 40% of the old price).

Absofeckinglutely, totally agree, used to think it would be 50% but now agree with you, 40% of old price.

[BufferBear Bitcoin Bull]

Your name is err *cough* interesting....

[expatowner]

**cough**

The use of the avatar and the name must bring a smile to someones face.

[dude wheres my house]

how cool is it to spend hundreds of pounds a month to keep out squaters, what the hell do they think they are doing. They are paying money to squat!!!

[BufferBear Bitcoin Bull]

**cough**

The use of the avatar and the name must bring a smile to someones face.

A smile

[chichi]

2 voids on my street at the moment. One has a bailiff notice in the window.

On newsnight now about immigrants having problems getting work - and more sick and family units turning up.