50% drops by 2011

RDB

getting back on topic, I think what we are going through now is very similar to what happened to Japan.

http://blog.ftadviser.com/?p=351

I see no reason why the UK wont follow the same path.

Obviously there will be differences that goes without saying.

The thing I find interesting is that the Japanese government cut interest rates to almost nothing and it didnt help. I can see this being the same.

Imagine losing 80% of the value of your home when you have spent years paying the mortgage. What a mind bender!

As I said before I think it will be more like 50% in this country, but thats being conservative. I wont be surprised if some areas fall up to 80% just like Japan.

mitchaa

RDB wrote: »

getting back on topic, I think what we are going through now is very similar to what happened to Japan.

http://blog.ftadviser.com/?p=351

I see no reason why the UK wont follow the same path.

Obviously there will be differences that goes without saying.

The thing I find interesting is that the Japanese government cut interest rates to almost nothing and it didnt help. I can see this being the same.

Imagine losing 80% of the value of your home when you have spent years paying the mortgage. What a mind bender!

As I said before I think it will be more like 50% in this country, but thats being conservative. I wont be surprised if some areas fall up to 80% just like Japan.

Any particular reason why you searched for this thread and restarted it after 3weeks RDB

50% conservative, thats your opinion.

Great, move on

Dithering_Dad

yes, this thread is dead. 50% drops? Pah! Don't you know we've now moved onto 70% drops?

Try to keep up!

RDB

Quote:
Originally Posted by IveSeenTheLight
Your link quotes: -


If they were to drop 70%, average prices would drop to £60,000.
Do you really honestly think that average UK house prices will drop to £60k?

This is roughly what they dropped to during the crash of 1989 - 1995.
You can see below that this would overshoot the long term trend by far more than it has overshot by.




If you look at that graph, the bottom of the troughs appear to be:

1978 - £58k
1983 - £65k
1996 - £69k

Based soley on this graph, if this crash follows the same trends as the previous crashes, I'd predict a bottom of about £75 - 80k. Which is a drop of approximately 60%.

Given that we're being told that this could be the worst economic crash since WW1, the crash in property prices could be worse than the 1970's, 1980's and 1990's. Therefore, the above logic would suggest that a crash of 70% is not a foolish perdiction.

Anyone care to point out why the above is incorrect?

StevieJ

Yoshua wrote: »

Yes and if prices are 50% lower then the desperate ones will sell even lower.

But there is no hurry to buy they will stay down a long time.


Just imagine you were a bank say someone wanted to borrow 100K to buy a house and they had another 100K deposit. Would you lend them that much considering you know the security the house is going to be worth half that in a few years?

The last few years banks have been saying yes and that what has got us into this mess.

Are you saying you can't buy a house with a 50% deposit If you fulfill the banks lending critera?
:eek:

Dithering_Dad

They crashed 80% in Japan, so logic dictates that they will crash more here because Japan is a more industrious country and the Japanese don't have huge personal Debt.

I'm therefore going with 90% house price drops. Anyone care to even bother arguing with this logic?

Well, do you? Punk?

StevieJ

Dithering_Dad wrote: »

yes, this thread is dead. 50% drops? Pah! Don't you know we've now moved onto 70% drops?

Try to keep up!

I appears his 80% Japan theme is spreading like a virus from thread to thread.

falancan

Now I think the 50% drop is likely to happen when those so called experts agreed 30 % drop in 2 years we have to put another more realistic 20 % on top of it really:T

Dithering_Dad

Well we have had 15% drops, so it it crazy to think that we'll have 80%?

I don't think so...

It's interesting to see the wild panic that an economic downturn is having on some posters. I guess this is the first one they have seen and so anything seems possible.

RDB

StevieJ wrote: »

I appears his 80% Japan theme is spreading like a virus from thread to thread.

Steve you often quote figures suggesting that prices cant drop this much because houses would be so cheap then.

The fａｃｔ　ｉｓ　ｉｎ　Ｊａｐａｎ　ｈｏｕｓｅ　ｐｒｉｃｅｓ　ｄｉｄ　ｄｒｏｐ　８０％，　ｐｒｉｃｅｓ　ｒｅａｌｌｙ　ｗｅｒｅ　８０％　ｃｈｅａｐｅｒ　ｂｕｔ　ｓｔｉｌｌ　ｉｔ　ｗａｓｎｔ　ｗｏｒｔｈ　ｂｕｙｉｎｇ　ｂｅｃａｕｓｅ　ｒｅｎｔｓ　ｄｒｏｐｐｅｄ　ｔｈｅ　ｓａｍｅ　ａｍｏｕｎｔ　ｏｒ　ｍｏｒｅ．

Ｉ　ｃａｎｔ　ｗａｉｔ　ｔｏ　ｑｕｏｔｅ　ｓｏｍｅ　ｏｆ　ｔｈｅ　ｔｈｉｎｇｓ　ｙｏｕ　ｓａｉｄ　ｏｎ　ｈｅｒｅ　ｉｎ　ａ　ｆｅｗ　ｙｅａｒｓ　ちめ　：）