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

WTF?_2

rizla01 wrote: »

Surely we have had unsustainable rises in property prices before this 'New fangled' finance vehicle was thought up.

Property prices have ALWAYS risen and fallen and the fact that the stupid lending by the banks caused this fall to be more noticeable and painful this time, doesn't mean that it wouldn't have happened as a matter of course anyway. Trouble is we will never know how long and painful it would have been if different methods were used for financing the mortgages.

We've had the biggest credit bubble since, well, forever. Certainly in modern times.

It was all made possible by 'new financial instruments' to get the debt off the balance sheet and a determined 'light touch' by the authorities who wanted to stoke a bubble.

There's no doubt that all this chicanery in Wall St. and the City could and should have been controlled by regulators. They failed to do so either through incompetence or design (likely a bit of both) and we are now left dealing with the consequences.

There was a fantastic programme on C4 quite a while back about just how clueless the regulators were and the mess we were in for - I think the presenter was some top private equity manager, he certainly knew his stuff better than the people at the FSA and BoE.

rizla01

But surely you have to ask WHY did people want to borrow so readily, even though they couldn't afford to repay if things went wrong, especially since the introduction of the ' Your home is at risk......Etc wording added to EVERY mortgage deal.

Can you say that the banking institutions are responsible for creating the almost insatiable desire as well as providing the means?

WTF?_2

rizla01 wrote: »

But surely you have to ask WHY did people want to borrow so readily, even though they couldn't afford to repay if things went wrong, especially since the introduction of the ' Your home is at risk......Etc wording added to EVERY mortgage deal.

Can you say that the banking institutions are responsible for creating the almost insatiable desire as well as the means?

When you offer people lots of free and easy money in a consumer society where owning stuff is seen as a sign of status and success, it's no surprise they will take as much debt as they can get. Especially with the media cheering them on and promoting the 'celebrity culture'.


Boy, our society has really gone off the rails along with the economy. Hopefully we'll get a collective national grip.

StevieJ

!!!!!!? wrote: »

When you offer people lots of free and easy money in a consumer society where owning stuff is seen as a sign of status and success, it's no surprise they will take as much debt as they can get. Especially with the media cheering them on and promoting the 'celebrity culture'.


Boy, our society has really gone off the rails along with the economy. Hopefully we'll get a collective national grip.

Same as why the shops are locked at night, to stop people helping themselves.

rizla01

It's a bit like the way young girls want to be size zero, thanks to the media controlling our society.


This is the main fault...... Society!!


Our society, and Americas, tells us all that we are successes if we own property and failures if we don't. THAT is the cause of this credit crunch.


I have seen this worsen ever since the days of Dallas (Tv Program) where so many aspired to be rich and live the life of luxury, have big cars and live life to the full.


Yet we all choose to blame the providers of this credit. Isn't that like blaming the gun-shop owner when i went on a rampage and shot a few civillians?

Despite the debts, I expect overall, that society has become wealthier as a consequence.

North_Sea_Bubble

rizla01 wrote: »

But surely you have to ask WHY did people want to borrow so readily, even though they couldn't afford to repay if things went wrong, especially since the introduction of the ' Your home is at risk......Etc wording added to EVERY mortgage deal.

Can you say that the banking institutions are responsible for creating the almost insatiable desire as well as providing the means?

People bought into the belief that house prices can only go up, so if they couldn't afford to pay, due to unemployment for example, they believed they would always have positive equity.

The banking institutions are not directly responsible for this belief, but they inexcusably also held this belief, probably due to blind faith in some complicated mathmatical model. I'm amazed that their subsequent over-leveraging of debt, to the point where they knew that if the debt went toxic then the government (i.e you & me) would have to bail them out, isn't illegal.

setmefree2

North_Sea_Bubble wrote: »

People bought into the belief that house prices can only go up,

In the US they only ever did - this is the first time HPs have fallen there....:cool: So some might argue it was a fair assumption.

the_worried_one

Just about stabilising at around that time, after a further 15% drop over the next year.

scousethife

setmefree2 wrote: »

In the US they only ever did - this is the first time HPs have fallen there....:cool: So some might argue it was a fair assumption.

Didnt they drop at the start of the 90's? I thought they did

Realy

scousethife wrote: »

Didnt they drop at the start of the 90's? I thought they did

I belive this is their first ever housing bubble. They may have had minimal drops but not a crash.