Disaster for Britain as housing becomes more affordable

Really2

Wookster wrote: »

How sad that your test of who's a better man depends on who has a job and who doesn't.

No great whites around the South Coast of the UK so unlikely, but hold your breath anyways, lets see you blue :cool:

Better than picking on some one with dyslexia.

You are a moral justice warrior.:rotfl:

beingjdc

Really2 wrote: »

So falling house prices are bad for the economy bubble or not once you pop it, it is bad for the economy.

Deflation is bad for any economy houses or not.

If you were looking to build a factory, and you had a choice of two countries which were otherwise identical, where would you build it?

The country where your workers needed £200,000 to buy a family home
The country where your workers needed £50,000 to buy a family home

Deflation is bad primarily if you're in debt. But the hangover analogy is apt. The problem isn't the hangover, it's the embarrasing state you got in the night before.

Austin_Allegro

Really2 wrote: »

So falling house prices are bad for the economy bubble or not once you pop it, it is bad for the economy.

Deflation is bad for any economy houses or not.

Well steady prices would probably be better. The falls are a correction to a more sensible and sustainable level IMO, so although it will be painful in the long term it's better for the economy.

StevieJ

Austin_Allegro wrote: »

That's a logical fallacy - post hoc ergo propter hoc.
Because an economy doing badly has falling house prices, it does not logically follow that falling house prices are the cause of that.

Indeed, it is more likely that the falling house prices are the result of them rising too high in the first place and causing the economy to go bust.

Falling prices are bad in this instance because of their link to CDO's and the contagion to other forms of credit. That is not to say that the problem could not have been avoided if property had not risen so much in the first place, a valid point you make.

Really2

Austin_Allegro wrote: »

Well steady prices would probably be better. The falls are a correction to a more sensible and sustainable level IMO, so although it will be painful in the long term it's better for the economy.

I agree, I was just comenting unfortunatly falling house prices are bad for the economy.(Even though it was a bubble that caused the crash)
I think that is true bubble or not because of consumer confidence and bank losses etc.

mr.broderick

beingjdc wrote: »

If you were looking to build a factory, and you had a choice of two countries which were otherwise identical, where would you build it?

The country where your workers needed £200,000 to buy a family home
The country where your workers needed £50,000 to buy a family home

Deflation is bad primarily if you're in debt. But the hangover analogy is apt. The problem isn't the hangover, it's the embarrasing state you got in the night before.

Suppose it would depend if the government where houses were £200k decided to give me £5 million to build it there.

StevieJ

Austin_Allegro wrote: »

Well steady prices would probably be better. The falls are a correction to a more sensible and sustainable level IMO, so although it will be painful in the long term it's better for the economy.

The correction could have been handled via stagnation and inflation, this was dashed by the US inspired credit crunch.

Really2

beingjdc wrote: »

Deflation is bad primarily if you're in debt. But the hangover analogy is apt. The problem isn't the hangover, it's the embarrasing state you got in the night before.

Look I am not saying house prices should go up but falling prices are bad for the economy.

Sorry defaltion is bad even if you have no debt as people stop buying knowing they can get it cheaper next month, so on, and so on.

StevieJ

beingjdc wrote: »

If you were looking to build a factory, and you had a choice of two countries which were otherwise identical, where would you build it?

The country where your workers needed £200,000 to buy a family home
The country where your workers needed £50,000 to buy a family home

Deflation is bad primarily if you're in debt. But the hangover analogy is apt. The problem isn't the hangover, it's the embarrasing state you got in the night before.

What about a country where properties are the equivalent of £16 million when measured against local wages (as Really pointed out),China :eek:

beingjdc

StevieJ wrote: »

What about a country where properties are the equivalent of £16 million when measured against local wages (as Really pointed out),China :eek:

Oh for pity's sake. What was actually pointed out was that a 1000 square foot property in the financial capital was the equivalent of £16 million in national average wages.

I imagine most people buying a 1000 square foot property there are rich businessmen, comparing it to the average wage of a country that still has hundreds of millions of agricultural labourers is silly.

What's the average house price in Mayfair compared to the average wage in Lincolnshire? There's a 2-bed flat currently for sale in Mayfair for £5.25m, so...