Monday, April 2, 2007

Reposted from last week

On the Likely Extent of Falls in Irish House Prices.

Many thanks to Royston who posted this article last week.
I printed it out and read it over the weekend.
It is the best thing I've read for ages.
If you gave got time then read it.

Posted by sold 2 rent 1 @ 02:29 PM (424 views)
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9 thoughts on “Reposted from last week

  • sold 2 rent 1 says:

    The key points to note:

    The UK didn’t make the list of the 18 worst HPC over the last 30 years.
    In early 1990’s HPC UK prices fell 10% nationally but regionally up to 40% (East Anglia)

    The data supports my 33-36 year cycle theory of secular bear and bull of 17 years each.

    At a worldwide level:
    1973-1992 turmoil period for house prices.
    1993-2009 Secular bull – constant growth
    2010 – 2026 Turmoil period

    I look at the next turmoil period as either 3 HPC’s with corresponding recessions or one long deflationary depression (at least a decade)

    In the UK, prices have gone up less than in Ireland but their inflation has been much higher than ours. In real terms I reckon the increase in HP is about the same.

    I emailed the author and made some comments of which he replied and agreed with.

    The world property boom is much more synchronised than in the past (The Economist 2005). Any HPC will be made worse as all counties will be crashing together and compounding the problem and leaving no room for “export lead” recovery.

    Also, Germany’s recovery should ensure than the euro base rate stays much higher then Ireland would like.

    Reply
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  • sold 2 rent 1 says:

    I am absolutely convinced that the perfect storm is heading for both Ireland and Spain. The UK is bad but not that bad.

    I think Ireland and Spain will crash out of the Euro some time in the next decade.

    I have contacted many betting companies to place a bet that such an event will come true. Unfortunately they do not have such available bets.

    Does anybody know about spread betting?
    Is it possible to place spread bets on house prices?
    Especially in the markets of Spain and Ireland.

    I have already got enough gold/silver in my portfolio and would like to diversify. Stocks and property will be heading south soon, so whilst the sentiment is still good, now is the time to place any bets.

    In 6-9 months the sentiment would have changed and the odds reduced significantly.

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  • It certainly used to be possible to get options on house prices, but I think they have expired (the ones I looked at). I will see if I can find anything similar.

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  • waitingfor hpc says:

    S2r where did u buy your gold / silver?

    Reply
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  • sold 2 rent 1 says:

    Here’s another
    http://www2.deltaindex.com/aboutUs/news/prop.asp

    waitingforhpc,

    Gold is unit trusts
    INVESTEC GLOBAL GOLD A
    MERRILL LYNCH GOLD & GENERAL

    Silver is ETF through idealing.com code SLVR

    Both can be ISA wrapped

    Reply
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  • S2R et al,
    What way do you see cash faring?

    Reply
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  • sold 2 rent 1 says:

    headmelter,

    It’s all about getting a balanced portfolio
    I see stocks and property going down.

    Get a proportion of your assets into gold/silver/energy/commodities to hedge against inflation.
    Get the rest in a mix of currencies including GBP, EUR and YEN

    I also have some cash in Turkish Lira earning 17% interest

    I am also thinking about making some spread bets against the markets and house prices
    We have heard prices falling in France and Ireland this week.
    Spain will be in the news in a month or two for the same reason

    It might be worth betting against UK house prices towards the end of the year. Not yet though.

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