When do you think house prices will hit the bottom of the market?

Cannon_Fodder

December 2009

kennyboy66 wrote: »

You are wasting your time, no matter how many pieces of evidence you give people, they will not believe you.

I am still waiting for one person to give me a statistic that shows that average salaries fell in the last 5 uk recessions.

Average weekly earnings went up in all sectors (public, private, services & manufacturing) between Sept 07 & Sept 08, despite the credit crunch starting in Aug 07 & no economic growth in uk since April 2008.

Despite this people give more credence to anecdotal tales about some bloke in the pub.

Kenny, I am starting to mis-understand your point, I think.

You seemed to be supporting Mitchaa in the premise that continued upward movement of Average Salaries will support the recovery of the housing market...? Have I got that correct?

Assuming I have, for now, well maybe you have made everyone elses' points for them...


Precisely because, as you say, through 2007 into 2008, despite the credit crunch etc, the Average Salary figures have looked healthy...

And despite this "ongoing support for the housing market" we have still suffered the steepest downturn in house prices recorded.

So, can you clarify how Average Salaries support the housing market? On their own.

They have an effect, I'm not going to say no effect unlike some, but there are more things than just Average Salary to influence house price crashes.


Into some nitty gritty; Does the calculation of Average Salary takes salaries and divide by the number employed, or the total population?

Can't find a definition, do you have one? I suspect the former, which means the growing unemployed list does not factor in your Average.

Do you have average household incomes over the previous recessions?

During recessions, the redudancies are often on a LIFO basis (last in first out), so the junior/lower paid individuals are disposed of, with the effect of raising the average salary, but reducing average household incomes.



As for, "pieces of evidence", you say Mitchaa has shown us, do you mean;

"I can only imagine that within the next 6-9mths, banks will ease off on this a little, but then perhaps not"

"I suspect there are massive numbers just waiting to buy and i supsect the points above were not as relative as to what they were back at the time of the last crash."

"a rise in unemployment will have absolutely no bearing on the figures."


Seriously? absolutely no bearing?

Say "not much effect", or "only a minor effect", fair enough that can be debated. But such blatant black and white statements, are neither evidence nor credible.

Cat695

December 2009

mitchaa wrote: »

In such a small minority, in such a small minority.

I bet your bottom dollar, the hundreds of thousands of workers in the Armed forces, NHS, police, fire brigades, councils and all those employed where the country has no choice and cannot do without (Lorry drivers, train drivers, pilots, engineers, and so on and on) all receive annual inflation pay increases next year.

I'll tell you when i get my pay rise next Apr.....but we (forces) depending on rank get about 2.5-3% rise (in my rank anyway)

Cannon_Fodder

December 2009

mitchaa wrote: »

In such a small minority, in such a small minority.

I bet your bottom dollar, the hundreds of thousands of workers in the Armed forces, NHS, police, fire brigades, councils and all those employed where the country has no choice and cannot do without (Lorry drivers, train drivers, pilots, engineers, and so on and on) all receive annual inflation pay increases next year.

The average salary will continue to rise, a rise in unemployment will have absolutely no bearing on the figures.

Your point is about small and underperforming companies, that is all. When there are no soldiers, nurses, doctors, firemen and policemen left on the streets, i may take a little notice

The police just signed away 3 years at 2.6%...doesn't cover todays inflation, let alone fuel any HPI.

http://news.bbc.co.uk/1/hi/england/london/7672188.stm

And it will have the effect of Govt being able to parade it as a fair deal to all the other public sector workers, so they won't get much different either...

...ok average salary may keep edging up, but it will not help them make big strides to save increased deposits.

Really2

December 2009

Cannon_Fodder wrote: »

The police just signed away 3 years at 2.6%...doesn't cover todays inflation, let alone fuel any HPI.

.

Most probably will more than cover inflation over the period though.
It is expected to be below 1% or - the start of next year.

kennyboy66_2

Cannon_Fodder wrote: »

Kenny, I am starting to mis-understand your point, I think.

You seemed to be supporting Mitchaa in the premise that continued upward movement of Average Salaries will support the recovery of the housing market...? Have I got that correct?

.

My point has nothing to do with supporting house prices, it is purely to counter those that say that in a recession, average salaries or earnings fall and this will contribute to making debt more expensive.
People repeatedly state this but provide no evidence or no coherent reasoning - usually followed by some guff about wages in China or deflationary spirals.

I repeat - all the evidence suggests that average earnings or salaries do not fall, but in fact rise.

The definition is fairly clear - it is the average for those that are employed (otherwise you are not earning).

It is scarely any comfort that average earnings go up if you are unemployed.

As far as house prices go although you could argue that such increases support house prices, I personally feel that at the moment that this is outweighed by

1) The prospect of further falls.
2) Unemployment or the fear of it.

I have no idea on falls in average incomes, but I think it is less meaningfull statistic.

I would also think that the Police settlement of 2.6% from Sept 2008 will exceed inflation by the time we get to 2009 - although possibly not in future years.

Cannon_Fodder

December 2009

Thanks for clarifying.

I would have thought that its the household incomes that matter more than salaries...as you say no comfort for the unemployed that salaries are increasing, and if there are less salaries to go round then debt servicing etc must be harder.

Maybe its a case of mistaken terminology, when "doom-ers" are saying, look at unemployment, its got to hit confidence/ability to buy/ability to service debt etc...

...then "anti-doom-ers" say but salaries are going up...when its not really salaries that matter, because the unemployed have no salary...

??

Cannon_Fodder

December 2009

mitchaa wrote: »

Your point is about small and underperforming companies, that is all.

I think tens of thousands of employees at Woolworths, MFI, JCB, Rosebys, etc, etc, etc may disagree with you, where their livelihoods are concerned.

mitchaa

June 2009

My point about the unemployed having no bearing is that the survey carried out by the ONS only takes into account those in continual employment for 12+ months.

So if they sampled it from a rate of 20m workers this year, next year with 1m job losses they will sample it from 19m workers. The figure will therefore not change for the worse unless those 19m have been asked to take a pay drop.

I suspect only a very sheer minority will be asked to do so though.

NHS/Police/Armed forces etc are all on banded pay structures meaning they receive 2 pay increases per year. Likewise for many other employment areas, I receive incrementals + inflationary in my pay awards as i suspect many people/industries do.

Even if the awards are below inflationary at the time, that average will still keep creeping up year in year out.

I personally cant see how the ONS figures could show a drop as the majorities will receive some form of pay increase over the year.

Perhaps a better indication for the housing market as you say are the average household income figures. When i first thought about it, average to me means Mr and Mrs average so that would put the average income at around £52k, but then thinking about it a little deeper, it also takes into account every household working or not, so the figure is a lot lower. I believe it is currently at around £37k.

veggiecar

longleggyblonde wrote: »

I'm recently divorced and fortunately had a very good settlement so I shall be looking at investing in a couple of properties.

I thought, I landed on a dating agency site by accident!:eek:

Sorry LLB, couldn't resist a giggle, no offence intended.;)

DaveyDave_3

I've just looked at the poll results and laughed. I'm pretty damn sure we are in for at least a couple of years of falls and then probably another 2 of stagnation. Have a look at the HPC graph and look what happened in the early nineties, and we didn't have a credit crunch then either - it's going to be bad.


There was at least a 5 year fall. Another interesting feature of this graph is the repeated 18 year cycle. This looks like a fundmental economic cycle that's unlikley to be affected by anything that Mr Brown can put in place. I suspect this is destined to repeat itself. Therefore we should look forward to another property boom in 2018 with another bust shortly after!!.