Monday, June 16, 2008

The good news about the housing crash

The good news about the housing crash

Desperate housebuilders are demanding the government 'do something' about the housing crash. But the credit crunch should mean that house prices settle at a level that genuinely reflects supply and demand...

Posted by damien @ 11:51 AM (1487 views)
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9 thoughts on “The good news about the housing crash

  • letthemfall says:

    Always good to read some commonsense in this economic toyland we live in. It feels like living in a country full of teenagers. “I’m grown up; I’ll do whatever I like.” Then, when their mistakes put them in trouble, it’s back crying to the grown-ups for help.
    It really is contemptible behaviour, on top of incompetence and short-sightedness.

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  • This is what you get when children brought up on tv & computer games grow up in to adults and are let loose on the real world, when things go wrong they expect to press the reset button and the game goes back to the start.

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  • last_days_of_disco says:

    Well well John Stepek is just about my all time favourite economics author. He is just so brutal, its great. Not surprised he works for Merryn.

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  • george monsoon says:

    Excellent piece of work, that presents a valid argument in language that can easily be understood by the masses.

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  • “This is what you get when children brought up on tv & computer games grow up in to adults and are let loose on the real world, when things go wrong they expect to press the reset button and the game goes back to the start.”

    Congratulations on writing the most stupid thing I’ve read here. Sheesh.

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  • Imminent_plunge says:

    Call me naive – have these housebuilders not made MASSIVE profits in the boom since 1995? And they’re running out of money less than a year after the credit crunch? I would love to know who was advising them and the advice they received.

    I’m in a lowly position in the financial industry and was warned last April about the imminent credit crunch by an investment banker and advised to liquefy my assets. I assume house builders had access to such information at the time.Why did they not do everything (including cutting prices) last spring and summer to shift their property? There were still plenty of FTBs at the time with the ‘if we don’t buy a house now, we’ll NEVER get on the housing ladder’ mentality who, for a nominal discount, would have bitten developers’ hands off for a piece of the action.

    What they have the choice of doing now if they wish to survive the next few years is to sell at realistic prices, whatever they may be (not chucking in carpets and paying mortgages for the first year) or flood the market with affordable rental properties 🙂 to at least achieve some revenue stream.

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  • Cheekie Charlie says:

    I like this bit:

    “Just as the boom was better than they could have hoped, so the bust will be worse than they’d ever imagined.”

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  • [email protected] I totally agree.

    Interestingly all your criticism could be made of the government itself over the past decade.

    Prof(ligate) Broon didn’t put anything to one side either!

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  • Countingmymoney says:

    He works for Merryn Sold-To-Rent-Somersett-Webb. No vested interest there then, is there? Almost as funny as Money Week’s prediction of a 20 year commodities boom!!

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