Property prices will have stabilised by this time next year. Yes or NO?

Generali

StevieJ wrote: »

Are you saying that there was a sudden removal of credit in 1974?

Yes I am. It was the result of the 'secondary banking crisis'.

http://en.wikipedia.org/wiki/Stock_market_crash_of_1973%E2%80%934

House prices (and other asset prices) had been bid up as a result of the Barker Boom.

StevieJ wrote: »

Surely if people are trying to fund retirement using their homes then this would put pressure on the lower end of the market as people trade down (supporting prices lower down the hierarchy).

Possibly. My belief is that it will reduce differences in house prices between cheaper and more expensive areas.

StevieJ wrote: »

In addition all those things you mention were in existence when house prices were bubbling, so the real issue comes back to credit. When the the credit markets unfreeze house prices will stalilise.

To clarify, I was trying to point out some differences between now and 1974 as well as a similarity. I find it is possible for some people to see a similarity between 2 points in history and then assume that everything else will thus pan out in exactly the same way. I was trying to show that while there is a similarity between 2007/8 and 1974, there are many differences.

I don't believe that credit markets unfreezing will cause house prices to rise or even to stabilize. House prices rising quickly over the past few years occured alongside a massive increase in the quantity of credit available. It is only if the quantity of credit supplied once again reaches historically abnormal levels that house prices can once again reach or be maintained at historically abnormal levels.

StevieJ wrote: »

As for the BCR expect their greatest hits to be released next week.

Watch out for me, 1st in the queue outside ITunes. Anyone know where I should put down my sleeping bag as they're not in the 'phone book.

sjaypink

fimonkey wrote: »

Hmm completely see your point, is there an alternative place I can post this where there are still plenty of 'bulls'? Once upon a time this board had its fair share of bulls and bears, but not so sure its representative any more.

you could ask this again down on the discussion time board?

im thinking bottom will be spring 2010, due to regaining in confidence, and greater availability of mortgages taking over a year to filter through (i reckon ????)

i too, for my own gains hope it lasts a little longer than this- have heard on here (and maybe on this thread- havent read it all) predictions of mid 2012 before it picks up again.... i cant see it that long myself- but certainly wouldnt mind it, personally.

StevieJ

Generali wrote: »

Yes I am. It was the result of the 'secondary banking crisis'.

http://en.wikipedia.org/wiki/Stock_market_crash_of_1973%E2%80%934

House prices (and other asset prices) had been bid up as a result of the Barker Boom.

.

I think you got that wrong, come back when you have had a haircut.

StevieJ

monkeymaster wrote: »

What makes you think credit markets will unfreeze? What do you mean by unfreeze and when do you think it will happen?

Banks aren't going to start lending freely while house prices are falling and prices aren't going to stop falling until there is a MASSIVE increase in lending. Catch 22 and the housing market is destined to find it's natural level.

We've yet to see what regulation will come out of recent events as the focus has been on stablising the system, but regulation will have to come and that could impact the recovery.

I mean when LIBOR rates join base rates, bit by bit, day by day.

Generali

StevieJ wrote: »

I think you got that wrong, come back when you have had a haircut.

I'm a little confused. Are you saying that the secondary banking crisis didn't happen or the Barker boom didn't lead to higher asset prices or something else?

I assume the last bit is an insult.

StevieJ

Generali wrote: »

I'm a little confused. Are you saying that the secondary banking crisis didn't happen or the Barker boom didn't lead to higher asset prices or something else?

I assume the last bit is an insult.

It was Tony Barber.

Generali

StevieJ wrote: »

It was Tony Barber.

Ok, thanks for that. I apologise for the (minor) error.

Do you have anything to add regarding the secondary banking crisis etc?

StevieJ

Generali wrote: »

Ok, thanks for that. I apologise for the (minor) error.

Do you have anything to add regarding the secondary banking crisis etc?

Oddly, I think that the oil price rise was the one item from 73-74 that is comparable to
today i.e. it created a major shock to the economic system just like the credit crunch is doing now.

Generali

StevieJ wrote: »

Oddly, I think that the oil price rise was the one item from 73-74 that is comparable to
today i.e. it created a major shock to the economic system just like the credit crunch is doing now.

I was 2 years old in 1973 so forgive the ignorance but wasn't the oil crisis in the early-70s connected to middle eastern countries refusing to sell oil to countries that supported Israel? In that regard there was a genuine shortage of fuel as much as prices rising.

StevieJ

Generali wrote: »

I was 2 years old in 1973 so forgive the ignorance but wasn't the oil crisis in the early-70s connected to middle eastern countries refusing to sell oil to countries that supported Israel? In that regard there was a genuine shortage of fuel as much as prices rising.

No, I think they wised up that they could achive higher prices for a dwindling resource and basically increased the prices that then stayed at the higher levels. Israeli politics was also involved but I think this was more of sideshow. The point is that after the Yon Kippur politics finished the price stayed high. I think at the time there was greater dependency on the Middle East for oil than now.