At least a decade for prices to return to 2007 levels.

skap7309

mitchaa wrote: »

Times have moved on from the last crash that many refer too, we are a lot more greedy now and our attitudes to housing over the last 10yrs or so have changed 10 fold.

ONLY due to HPI. Now that does not exist, why bother 'investing' in properdee? Location, Location, Location / Property Ladder / Watch Us 'Experts' Buy A House Then Sell It 8 Months Later For A 25% Profit Not Due To Our Ability But Due To HPI are all running repeats from 2006 - 2007.

Coincedence? No, they cannot physically make that type of program anymore! BTL is also dying on its feet, so the greed you talk about has well and truely gone.....

Cannon_Fodder

http://www.allagents.co.uk/house-prices-from-1952/

as per graph in the link, the last crash in 1989 took until after 1997 to reach peak again.

...and that was without a Financial crisis.

Barclays admit that it will be another year or two for lending to be resumed, by which time, what sort of drops will have occured? Taking it that much longer to get back up to peak...

Even if late-2010 or 2011 sees the bottom, any HPI is going to be offsetting the drops of 2009...then 2012 growth will be offsetting the drops of 2008...then 2013 growth has to offsets the drops of 2007...

So 2014 is a "possible" future peak...

...and if sentiment is hurt by the recession &/or the unique lending delay slows "normal" recovery, then 8-10 years is a perfectly sensible prediction for peak to be reached.


Although, I too wish too know what constitutes "good HPI". IMO, it is a contradiction in terms.

"the old banks dont have any money argument"

But the point is, that it is NOT an "old" argument. It is a very new argument, in the scale of economic activity. Wishing it away, will not work.

Watching a "car crash" like this, as it is happening, makes for painful viewing, but you cannot shorten it just because you are getting a bit bored of the same "old" comments - it has to work its course...

mitchaa

the_ash_and_the_oak wrote: »

Mitchaa I see what you mean and you may well be right but why do you think there was stagnation for around 4 years last time around?

Perceptions and attitudes to housing, its as simple as that.

Did we have late 20's, early 30's professionals still living at home with parents in the early 90's? Did we have a booming property development and BTL culture back then?

I would say around 50-60% of my old school friends (25/26) are still living at home with their parents. I wonder what the figures were back in 1990?

People have witnessed in the last 7-8yrs or so the amount of wealth some ordinary people have made on properties, either through property development or BTL's.

I think if the opportunity arises again after this correction, many will not ''miss the boat'' this time round.

I may be completely wrong and if so, it will make me bolder and wiser come next crash in 2025;)

penguine

mitchaa wrote: »

Little stagnation period ........I find the idea of 4-5yrs stagnation ludicrous, we are far too greedy to let that happen, BTL, property developing and the STR's will see that it will be much shorter time frame than that. I would say 6-9 mths whilst confidence grows will be about as much stagnation as we'll see.

Logically, house prices would rise at a rate comparable to inflation + increases in average pay. This hasn't happened recently. In my area, prices pretty much doubled between 2001 and 2004. Salaries didn't double in that period, the cost of everything else didn't double either. So there was no logical reason for that to happen -- other than banks were lending more money and to more borrowers than they had been previously. Given that banks aren't going to be able to do that again soon (if you haven't realised this you've not been paying attention), there's not going to be any money floating around in system to return house prices to previous levels anytime soon.

mitchaa

skap7309 wrote: »

Coincedence? No, they cannot physically make that type of program anymore! BTL is also dying on its feet, so the greed you talk about has well and truely gone.....

Quite possibly yes

But, when the bottom is reached, do you not think the old money to be made in housing mindset will return?

mitchaa

Cannon_Fodder wrote: »

Even if late-2010 or 2011 sees the bottom, any HPI is going to be offsetting the drops of 2009...then 2012 growth will be offsetting the drops of 2008...then 2013 growth has to offsets the drops of 2007...

So 2014 is a "possible" future peak...

So you accept that it may not be 10 yrs, more like 6-7yrs should the bottom be reached 2010/2011?

Is this best scenario in your view? You really think another 24-36 months of continual drops/stagnation?

Not disagreeing with you, i dont know, just intrigued as to why the long time frame?

Cannon_Fodder

mitchaa wrote: »

Obviously not as strong as the last time, but i suspect Sept 2007 prices to be back before Sept 2012.

I think another 10% or so will come off the value of an average house, possibly 15% and then a little stagnation period.

Little stagnation period ........I find the idea of 4-5yrs stagnation ludicrous, we are far too greedy to let that happen, BTL, property developing and the STR's will see that it will be much shorter time frame than that. I would say 6-9 mths whilst confidence grows will be about as much stagnation as we'll see.

As you can tell im not in the D+G brigade, i do believe there is light at the end of the tunnel.

Im not an expert though, im just another ordinary Joe like everyone else on here;)

The point others are making is that after stagnation, there will not be an immediate return to 10-15% HPI, two years straight back to peak...sentiment simply does not work like that.

After stagnation, there will be 3-4 years of moderate HPI, 5%, 7%, 9%, 11% for example, to get that 30% drop back, which, after 2 years of crash, and a year of stagnation, is a minimum 7 years if there are no other factors...

but, with this recession looking to be deeper than anyone predicted, the lending staying limited for another year or two in Barclays' own words, plus the tax burden yet to hit...

another 2-3 years on top is not particularly outlandish, if at all.

sabretoothtigger

mitchaa wrote: »

Quite possibly yes

But, when the bottom is reached, do you not think the old money to be made in housing mindset will return?

Not in the same way, people would rather spend money then invest it and in future it will be more of their own money they are gambling on a rise

It all depends on the area as well, I guess London will return to form after also seeing the largest falls?

mitchaa

Cannon_Fodder wrote: »

The point others are making is that after stagnation, there will not be an immediate return to 10-15% HPI, two years straight back to peak...sentiment simply does not work like that.

After stagnation, there will be 3-4 years of moderate HPI, 5%, 7%, 9%, 11% for example, to get that 30% drop back, which, after 2 years of crash, and a year of stagnation, is a minimum 7 years if there are no other factors...

but, with this recession looking to be deeper than anyone predicted, the lending staying limited for another year or two in Barclays' own words, plus the tax burden yet to hit...

another 2-3 years on top is not particularly outlandish, if at all.

You'll notice a thanks

I wont argue with that as i cannot. I just believe the situation will begin to improve much sooner than some of the predictions being quoted around here. Sept 2017, i think is too drastic for a crash ending, IMO anyway in the next 12 mths or so. I can see 25%-30% down and this will have bottomed out come this time next year.

Many think it will be a much longer drawn out process, simple answer is, no-one knows

skap7309

mitchaa wrote: »

People are buying now though, why??

6-9mths of continuous stagnation (+0.5 to -0.5) i would say would be enough to tempt people back into the buying market.

So let me ask you a question...If we had 9 months of stagnation from now until Sept 2009, up 0.5%, down 0.5%, up 0.5% down 0.5% would this not tempt you into buying Sept 2009? If not, why not?

Nationwide did report a -0.4% drop last month;)

No i dont think this will happen so soon, but come Sept 2009 i think we will start to see this kind of stagnating pattern emerge

1) Transactions are sticking at a historic low of around 32-33,000. A good indicator would be if these rocketed to over 100,000 we would be seeing HPI. Below 100,000 we see HPC so there is a long way to go yet.

2) If prices stagnate i would buy if i reach my target deposit - see sig. Should i reach it before this i would still look providing we are not seeing rampant MoM negatives. If HPI begins before my target is reached i would start looking immediatley. TBH i should reach target towards the end of 2009 so could time it perfectly.

3) No ta, Halfax -2.6% got me, also last month......;)