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Sell Your House Now Or Face 80% Falls, what is YOUR prediction?
Comments
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I've found one that will definitely fall 80%
http://www.rightmove.co.uk/viewdetails-20988155.rsp?pa_n=1&tr_t=buy
pmslIllegitimi non carborundum.0 -
I strongly believe that between price falls and currency falls houses will drop by 80% on average over 10 years just like the Japanese housing crash of the 90s.
I want to know what YOUR prediction is on house prices, and if you disagree with mine rather than just flame me give me real evidence to back up your opinion.
In my opinion, house prices will drop nowhere near 80%.
If you want to look at historical statistical data, take a look at this link
http://www.hbosplc.com/economy/inclu...TownsData3.xls
It shows the effect on house prices during the last 20 years (includes last crash data)
If you also look at the following graph, you will see that the UK average houses are statistically about 22% above the real house price average.
My prediciton would be that a soft landing would constitute 15% drop over three years thus taking inflation into account would mean the average house prices are back to the Real House Price average.
Though taking into account the widespread sentiment hoping for a crash, there is a chance this could overshoot and drop below the real house price trend, but this would have a much higher damaging effect on our economy
Again looking closely at this link
http://www.hbosplc.com/economy/inclu...TownsData3.xls
you can see that in different regions, the graph would look much different to this one:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
well it hasn't happened the last 3 times and I don't think I've heard of it happening with any bubble.IveSeenTheLight wrote: »
My prediciton would be that a soft landing would constitute 15% drop over three years thus taking inflation into account would mean the average house prices are back to the Real House Price average.
However, this is the first time so much information is available to the masses, we are all going to see when prices reach their average line.
So its going to be interesting.Freedom is not worth having if it does not include the freedom to make mistakes.0 -
Lotus-eater wrote: »well it hasn't happened the last 3 times and I don't think I've heard of it happening with any bubble.
However, this is the first time so much information is available to the masses, we are all going to see when prices reach their average line.
So its going to be interesting.
You could say it happened to a small extent in 2005.
After your quote of mine, I did say this could overshoot the average.
It will be interesting, having more information to the massess.
They are more aware now and this will help facilitate price drops but also conversely, they will know when the prices reach the long term house price average and therefore could help to cushion any drops as people realise that the prices are not still overinflated:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
Probably a naive question but how useful is the "average house price" as a benchmark as I would think it's quite heavily skewed by the amazing rise in prices over the last decade.
Is there an argument for saying that if the houses prices are going to drop towards some long-term average, that average will be somewhat lower than recorded by a simple averaging of returns?
Or it that nonsense?0 -
Graeme7777 wrote: »Probably a naive question but how useful is the "average house price" as a benchmark as I would think it's quite heavily skewed by the amazing rise in prices over the last decade.
Is there an argument for saying that if the houses prices are going to drop towards some long-term average, that average will be somewhat lower than recorded by a simple averaging of returns?
Or it that nonsense?
no, this is spot on, and a flaw in the 'soft landing' scenario outlined above.It's a health benefit ...0 -
80%?!? not a hope, I think house prices - especially those in more costly areas will fall between 10 and 15%.
Why? because house prices have been slightly overinflated so that they are beyond the reach of many average people
because the media stories and scaremongering like "your house will only be worth £1 in a years time" puts people off buying and also encourages buyers ot put in lower offers and sellers to accept those offers.
because banks are tightening up and reducing the availability of 5x mortgages and 100% mortgages.
But I fail to see how the economy would support a housing price crash of 80%DEBT: £500 credit card £800 Bank overdraft
£14 Weekly food budget0 -
But I fail to see how the economy would support a housing price crash of 80%
I think the gist of this post was:
40% fall in house prices + the value of the pound halving = 80% drop
(well actually it was 33% + halving = 66%, but whatever, I can't see the OP backing up the 80% estimate anywhere lol)
As far as the majority of us are concerned (I'm guessing the majority aren't foreign investors or heavily invested in foreign currencies) the OP is putting forward an estimate of an average 40% fall, which isn't impossible (well, neither is 80%, but come on, let's talk 'real world' probabilities here...)0 -
In no way would I like anyone to confuse this as a 'prediction' on my part, but I've b@$t@rdised IveSeenTheLight's graph a little and here's the result:
I've just mirrored HPI from the peak, then ended the trough a little early as is usually the way with boom-bust cycles. I don't think the graph looks ridiculously implausible.
The green line in 2013 marks a 40% reduction from peak average prices by the way. Somehow it still looks almost generous in starting an upward trend from that point
Form your own opinions, but a 10% reduction then rising prices or whatever goes against everything the history in this graph can teach us. Course, this proves nothing other than I have too much time on my hands
For the record, I have a hard time imagining drops over 25% myself(contradictory little fella huh?
) Still, that doesn't mean it can't happen.
edit: I could have been a bit cheekier and removed the flat 'false start' from 2005 on the downward slope too (take a look at the 90's peak) but I figured I'd best leave it in to avoid the screams of 'CHEAT!' 
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