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Guest barebear

When Will The Bears Turn To Bulls ?

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Guest barebear

For me it will be when asking prices are 35% down on todays prices ,this would seem a reasonable time to buy back in. Given that property is supposed to double every ten years, my first little studio flat that I bought in 1984 for £25 k should be worth around £110 k now, it is infact valued at £140 - £150k !! So a 35% drop would see that coming back into line.Also it is much cheaper to rent at the moment,it would also address that as well. I bought that place on £8.5k salary at 3 times my earnings as a fireman , they earn around £30k now so a fireman now would be looking at 5 times earnings to buy the same place.

A 35 % drop would be fair to the forthcoming generations and wouldn't harm the existing owners too much ( they would just have to sit on thier negative equity for a few years) Ha ha

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For me it will be when asking prices are 35% down on todays prices ,this would seem a reasonable time to buy back in. Given that property is supposed to double every ten years, my first little studio flat that I bought in 1984 for £25 k should be worth around £110 k now, it is infact valued at £140 - £150k !! So a 35% drop would see that coming back into line.Also it is much cheaper to rent at the moment,it would also address that as well. I bought that place on £8.5k salary at 3 times my earnings as a fireman , they earn around £30k now so a fireman now would be looking at 5 times earnings to buy the same place.

A 35 % drop would be fair to the forthcoming generations and wouldn't harm the existing owners too much ( they would just have to sit on thier negative equity for a few years) Ha ha

I don't give a toss about the exact percentage drop - I'll buy a home when I can get the house I want at a price I'm comfortable paying.

That said, prices will have to be a lot lower before that happens.

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I don't expect ever to be a property bull. This doesn't mean I would never buy a house, but being "bullish on property" implies an expectation of substantial capital gains in the future. And I doubt very much that we will again see capital gains in the property market like the ones that have been witnessed over the last decade - not for a long time. That is: in twenty years time, I do not believe we be at the peak of yet another property market boom.

I'll buy if it makes financial sense to do so, and for the purpose of housing myself and my family. The way to "make money out of property" in the future will be to live in it!

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I think I will remain a bear because a property to me is not an investment or an opportunity. It has to have a feel about it something I can turn into a home were I will be happy to stay and not move on and on.

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a 90-99% drop in house prices accompanied by screams of "you must be mad property is a terrible investment!!"

I think that (especially residential) property is one of the most dangerous assets in which to over-invest - second only to debt.

I think a big problem with owner occupation is that too many have the mindset that servicing a mortgage is, like rent, appropriate and necessary. This blinds people to the real risks and costs... and, today, it is especially dangerous as, the last time property boomed, in the 80s, the effects were offset by inflation (including wage inflation). Wage inflation seems rather unlikely today in our post globalization economy.

A 99% drop in house prices isn't likely at all. In fact, a 50% drop (while what I think would be appropriate in a fair market) is unlikely to transpire... to a large extent because there *are* substantial savings in cash - and the security of tenure offered by owner-occupation is still worth a considerable amount in human terms.

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For me it will be when asking prices are 35% down on todays prices ,this would seem a reasonable time to buy back in. Given that property is supposed to double every ten years, my first little studio flat that I bought in 1984 for £25 k should be worth around £110 k now, it is infact valued at £140 - £150k !! So a 35% drop would see that coming back into line.Also it is much cheaper to rent at the moment,it would also address that as well. I bought that place on £8.5k salary at 3 times my earnings as a fireman , they earn around £30k now so a fireman now would be looking at 5 times earnings to buy the same place.

A 35 % drop would be fair to the forthcoming generations and wouldn't harm the existing owners too much ( they would just have to sit on thier negative equity for a few years) Ha ha

already planning for the future?

lets just wait and see if there is a drop in house prices enough to make houses affordable

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already planning for the future?

lets just wait and see if there is a drop in house prices enough to make houses affordable

i am slightly more realistic about what may be achieved in GC2 a sthings stand - i expect a fall of 10-20% in real terms which will be attributed to the tighter lending conditions - if the economy goes tits up though then we can have a real party 30-40% (if you still have a job that is)

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i am slightly more realistic about what may be achieved in GC2 a sthings stand - i expect a fall of 10-20% in real terms which will be attributed to the tighter lending conditions - if the economy goes tits up though then we can have a real party 30-40% (if you still have a job that is)

It is 100 per cent guaranteed that the economy will go tits up if we get 10-20% fall in prices. The UK economy is based on housing - a reduction of this magnitude (just 10-20%) will start a horrible recession (a la GC1 in the early nineties).

HPC first - Recession second: End of story. :lol:

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I think that (especially residential) property is one of the most dangerous assets in which to over-invest - second only to debt.

I think a big problem with owner occupation is that too many have the mindset that servicing a mortgage is, like rent, appropriate and necessary. This blinds people to the real risks and costs... and, today, it is especially dangerous as, the last time property boomed, in the 80s, the effects were offset by inflation (including wage inflation). Wage inflation seems rather unlikely today in our post globalization economy.

A 99% drop in house prices isn't likely at all. In fact, a 50% drop (while what I think would be appropriate in a fair market) is unlikely to transpire... to a large extent because there *are* substantial savings in cash - and the security of tenure offered by owner-occupation is still worth a considerable amount in human terms.

Unfortunately japan would not agree with you, not to mention the great depression, what with the galactic size of todays credit bubble (yes peoples savings are credit not cash ), I feel at liberty to predict up to 99% drops in house prices

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I think most of the "bears" will turn to "bulls" when there has been a nominal price fall of around 20%. I think they would be wrong to do so. I expect there is likely to be an initial price fall, followed by a lowering of rates for a time which will lull most people into thinking that was the "correction". Lots of people will breathe a sigh of relief and think it is back to the rampant bull market, but I think they will be caught out, and the real crash will then unfold. When you hear people like Chancellor Darling saying he thinks the worst of the credit crunch may now be over you realise how blind even our leaders are. Price inflation will pick up but wage inflation won't. IRs will rise once more and the economy will slump under the debt burden. More and more people will default on credit, loans and mortgages and the banks will move out of the mortgage market, like HBOS are doing, or go bust. The low wage inflation and higher defaults will make in so unprofitable for them they will decide to go for higher margin business. Sentiment will turn on houses as an "investment" and get rich quick trades, and prices will gradually fall over a long period. Maybe 10-15 years, to lower than they were 10 years ago in real terms. By the time inflation is under control and IRs fall, people will no longer want to talk about property. The majority of borrowers will be classed as sub-prime and will struggle to own their own home. The majority of homes will have been repossessed by banks desperate for cash and bought up during the slump by foreign investors, possibly from oil states, and renting will be the only option for most people. Young people entering their 20s will have had it hammered into their heads by their parents to never get into debt buying a house and never to borrow from a bank in particular. It will be another 20-30 years before this view is challenged, by which time Sharia law/banks will be common in many urban areas of the UK. For the non-muslim population mutual building societies, with strict lending controls will be the only source of mortgages. London will no longer be a financial centre since the collapse of sterling and the danger from frequent flooding and civil and social unrest.

This all assumes things don't get really bad and we have civil war with a military junta controlling most of the country, which I think is also a possibility depending on how bad the social breakdown gets.

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Guest Bart of Darkness
I don't give a toss about the exact percentage drop - I'll buy a home when I can get the house I want at a price I'm comfortable paying.

That said, prices will have to be a lot lower before that happens.

Couldn't have put it better myself.

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I am still a 'neither' as prices still haven't dropped where I live in E Herts, but I will buy when a 90% mortgage is the same as I pay in rent,

Currently I pay 1250 pcm for a 4 bed, they sell for over 400, assuming the IR's don't go up they would have to come down to about 250, they were built 15 years ago and sold for around 125.

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