The 70% club

Heyman_2

Well nothing's impossible.

Not on this forum anyway :rolleyes:

StevieJ

Good to see the sensible forum participants have joined us.

Cannon_Fodder

Struggling to find decent stats on the real Japan situation...

http://www.moneyweek.com/investments/property/a-bull-market-in-property-is-just-beginning---but-where.aspx
"From 1990 to 2000, real estate prices in Japan fell between 50% and 90% (depending on where in Japan we’re talking about, and what type of real estate we’re talking about). And they’ve stayed down."

"Amazingly, property prices continued to fall, even in a 0% interest world."

Land...http://news.bbc.co.uk/1/hi/business/6478769.stm
"Japan's residential land prices are still on average half of what they were at their 1990 peak, the survey showed."

http://www.spectator.co.uk/archive/features/24361/dont-mention-house-prices-to-the-japanese.thtml?SelectedIssueDate=5%20August%202006
From 2006 - "Property prices in the Land of the Rising Sun have so far fallen by 54 per cent since peaking in 1990. In some parts of Tokyo they have lost nine-tenths of their value."

"In response, the government tried some old-fashioned Keynesian recipes, spending huge sums on public works; this achieved nothing other than to push the national debt to crippling levels"

dopester

You also have to look back at how things have been in the past....

Your focus of gradual falls each year to arrive at 70% isn't at all how I see it going.

I see me saying to a bank or fully authorised creditor in possession... "I'll give you £120,000 cash for it. No messing about. Full payment to be with you in 7 days."

You'd be surprised at the discounts and deals to be made when times are hard and cash is short.

StevieJ

Heyman wrote: »

Ahhhh yes, sorry I was having a blonde moment. :rotfl:

Yes you are totally correct and I am totally wrong! Does make it even more unbelievable though doesn't it?

That could be classed as insulting Blondes, apparently we are not doing the insulting any more (are we Downey?). Oh apart from Dervish.

greggymagic

Dopester - Thats a real possibility. And there will definitely be bargains to be had...... I don't doubt for a minute that they'll be instances where you can do a quick deal and get a huge reduction. . . but "average" falls of 70 percent . . . across the whole country?

IveSeenTheLight

PayDay wrote: »

How? You have already told us that you have only got enough for 3 months if you lose your job. Even allowing for your tenants keep paying their rent, that still leaves you well short of being able to buy 3.

I was being facetious, hence the smiley, however while I mentioned I had a 3 month emergency fund, I didn't disclose other finances I have and ways I can re-divert those finances.
If property in my VI area was to drop to average £60k, you can be sure that I would be seriously re-structuring to buy more.

At £60k, 25% deposit is only £15k.
With everyone here predicting a long stagnated time at the bottom, I would definately be working on buying as much as possible at those prices

IveSeenTheLight

dopester wrote: »

LOL ISTL. You're already committed with debt levels on two houses, and another abroad. A 70% crash would put you in the hole (not laughing at prospect of that) and unlikely to make you any sort of good credit risk for more money, as you service existing debt.

Your partly right. Right in the fact that I have 2 UK properties and 1 abroad.
None of which I personally am paying for, so with my increased allowance earnings as a tax free ex-pat, it's very easy to obtain cash very quickly over a couple of months.

IF and its a big IF, my properties were to drop 70%, then one would be in Negative Equity, just, with the other a little more into Negative equity.
As you know, I have been for quite some time (with the help of my tenants) paying down the mortgage debt.
Even with house prices already dropping, I still have an estimated 47% and 62% equity in the properties

But all this is hypothetical and in my opinion unrealistic.
70% average falls :rotfl:

IveSeenTheLight

dopester wrote: »

Were you complaining on the way up?

Were you appreciating the difficulties of FTBS forever stretching themselves further and further for borrowing and debt from 1998 onwards to get their first property?

Honestly, considering you have at least one BTL, or a second home that you let out in your capacity as a landlord, that your sympathies are not that genuine or balanced.

Dopester,
Do I correctly recall that you almost bought in Aug 2007?

IveSeenTheLight

dopester wrote: »

...but perhaps more realistic than some of the optimistic "15% crash maximum*", or "gentle slowdown", or "green-shoots - recovery coming" posts of others.

*As was ISTL's forecast back at the start of May.

remember to post a link when you quote me.
I'll be happy to respond and show other links