Monday, March 11, 2013

More trouble on the way?

The Great Senior Sell-Off Could Cause the Next Housing Crisis

US report looks at the demographics of home ownership and suggests there will be too few people with the sort of income or lifestyle to be able or want to buy their homes. Interesting if the same logic can be applied to our housing situation here

Posted by stuartking @ 10:16 PM (1532 views)
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3 thoughts on “More trouble on the way?

  • It’s the great irony, isn’t it? From war, they gained in peace. But then fostered war.

    All because of lack of humility. The nuclear threat from those who claimed to oppose it!

    Why did they bother living?

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  • Excellent choice of article, Stuart. The main point, that demographics has a large effect on housing demand, is certainly true. However there are huge differences between the housing market in the USA versus the UK. In America, land prices make up a much smaller proportion of the price, and American houses aren’t built to last as long.

    In Europe, the demographic picture is incredibly diverse. The population of Bulgaria has fallen from 9m to 7.3m in the last 25 years; a million Portuguese have left their home country in the last 15 years. The Greeks are trickling out; and everyone who can has abandoned Ireland. Much more information is available at “Population Loss on the European Periphery“.

    However in Europe’s “core”, which includes the UK (or at least the southeast), the population continues to rise. Crucially, the rising age group is the key hard-working / hard-spending 16-49 group. We’re not really seeing much in the way of benefit tourism: most migrants are coming here to work. This appears to be a secular trend, not a cyclical one; and it’s self-reinforcing too. New businesses are being set up in London, not Lisbon; educated and skilled workers are leaving Sofia and heading to Stockholm; leaving behind only the old and the infirm (both people and companies).

    Not all regions of the UK will gain workers and jobs; the lion’s share of the growth is in London. As retirees sell up in the capital, popular retirement towns along the south coast are also benefiting. Conversely the north of England has seen little economic growth and is failing to attract skilled workers; little wonder that you can buy houses in Burnley for £30,000.

    Over the next few years these trends will continue to play out: housing markets outside the south of England will stagnate, while the southeast motors ahead. The traditional trickle-down effect from central London will push up prices outside prime central areas. Secondary areas will benefit as recent immigrants decide to settle down and start families. Further out, prices in the home counties and commuter belt aren’t cheap; but they’re positively bargains compared to inner London so there’s plenty of scope for price growth.

    Demography is destiny – and the consequences are localised.

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  • if there is no-one left to buy the homes because they are unaffordable,then prices will simply fall

    after all a house is only worth what someone is prepared to pay

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