Moneyweek - UK house prices will plummet: look at this scary chart

StevieJ

Generali wrote: »

Also, comparing nominal prices from the 1970s and from the C21st just show that the pound buys you less today than it did then.

The FTSE comparison is interesting though.

Good time to measure when the Ftse is on its knees

Generali

StevieJ wrote: »

Good time to measure when the Ftse is on its knees

It's got further to fall yet, IMO at least. A good chance it'll see 3000 and possibly even lower.

I can't see where any good news is going to come from for non-bank corporates for quite a while.

JWF

Fortunately i don't get paid in either stocks and shares or solid silver bars, so in a lot of ways the graphs are a bit meaningless. Yes, they may indicate that one may outperform the other, but that's only of value if you view the purchase of either as a pure investment. After all, if i sell my house and buy silver, I can't live in it!

Maybe we could express the value of monkey enclosures in kg of bananas and draw some startling conclusions about the long term returns likely to be attained through investment in Howlett's Zoo.

Time2Go_25

penguine wrote: »

I think the implication is that even those buying well below market value at the moment are making a mistake.

It's only a mistake if you regard buying a house as a way of making money instead of a place to make a home and to enjoy with your family.

buglawton

The market value is defined as the price that houses are actually changing hands at.

So how would anyone go about buying well below market value?

Conrad

As ever these charts are rear view affairs falling to spot the bends in the road ahead.

One such unseen bend is ultra low returns on cash, meaning property yields are much higher.

mbga9pgf

Conrad wrote: »

As ever these charts are rear view affairs falling to spot the bends in the road ahead.

One such unseen bend is ultra low returns on cash, meaning property yields are much higher.

Cash in bank earning between 0.5% and 3.75% (tesco online saver, 1.5% 12 month bonus).

Housing losing (currently) 17% P.A.

How are you making up your 20% loss on a highly geared asset Conrad? :rotfl:

purch

Has my eyesight gone wonky....but how can anyone say the two charts are a mirror of each other ???

The 'Denial' 'Bull Trap' 'Fear' 'Capitulation' 'Despair' and 'Return to Mean' bits aren't on the Nominal House Prices chart............and as yet nobody can say for certain whether they will "exactly" mirror whats above, or even get close !!!!

piggeh

The article mentions interest rates being artifically low. However I don't necessarily think that is a good indication currently regarding mortgage affordability for FTBs or new mortgage customers. Many will still be offered a mortgage at 5-7% which has little bearing with the current BOE interest rate at 1%. I do agree that generally people will find it more of a struggle once rates go up, but will mortgage rates remain at +4% or so above BOE rate? I'd imagine some of the increase will be absorbed back by the banks so an increase in interest rates will not have as dramatic an effect on house prices as it has done historically.

The silver measure is also a bit sensationalist by using the rations when silver spiked in price.

House prices still have a long way to fall though, regardless.

nickmason

These graphs are rubbish. "Virtual Mirror" my backside. It suggests that the bubble cycle is from 1973-c2015; 40 years?! If you wanted to map it from about 1993, then it would actually corrolate a little better; you see a first sell-off around 2003/4. But it is still a vastly oversimplified view - this is really tabloid stuff.

Which is confirmed by his intriguing house price/ftse graph. I quite like it, it tells a story, but also he claims it illustrates a long term mean of 10. Not to my eyes.

It's all bunkum. Well, hyperbole, anyhow.