Saturday, October 11, 2008

‘After the horse has bolted’ comes to mind

Negative equity is not so scary if you've planned ahead for it. By Edmund Conway

...we are facing the worst housing crash since the 1930s, not to mention the worst financial crisis. But the first piece of advice I give is still the same: you should only buy a place if you are sure you can afford it, and provided you don't assume the price will go up.

Posted by suzyandjoe @ 07:48 AM (385 views)
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3 thoughts on “‘After the horse has bolted’ comes to mind

  • Does anyone know how much house prices fell in the 1930s ??

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  • This really is after-the-fact stuff. Very interesting how he uses the first person, rather than stay in the abstract (and the fact that it got past the editors, if they still have them on the Telegraph):

    “The combined effect of these four principles is that I bought a place I could afford even though my mortgage rates have increased since; that even if I moved abroad and could not sell without incurring a hefty fee, I could rent out the property and cover the mortgage. These principles are common sense, but I am amazed to hear so many stories of families who could not meet any of them.”

    i.e. “I wish I hadn’t been such a stupid prat, but I’m glad I wasn’t as stupid as some.”

    You have to remember that this character was pretty bullish about house prices until relatively recently. I often wonder how many of the weekend broadsheets will still have a separate property section after the HPC pans out. I reckon that the point at which the last property section ceases to be printed may be a good indicator that the time to buy is at hand: I am undecided as to whether it is a forward or a lagging indicator, but as others have pointed out, the bottom of the market is likely to be a long and drawn out affair, so exact timing shouldn’t matter.

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  • Anyone know anything about New Zealand market. Would really apreciate some insight as I will be buying a home there eventually.
    Cheers

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