where do you think house prices will be in 10 years?

motch

Really2 wrote: »

That graph is inflation adjusted not nominal.

well spotted. Although I think it should be included

I just worked out (on a savings calculator not in my head!) if someone invested a £1 when the romans were about and christ was born, and they got 2.8% average on it a year, they'd have - (well relatives would) ......

£968,789,266,564,660,600,000,000.00

about 9 years ago

bizarre, can't be true surely?

Dan:_4

motch wrote: »

well spotted. Although I think it should be included

I just worked out (on a savings calculator not in my head!) if someone invested a £1 when the romans were about and christ was born, and they got 2.8% average on it a year, they'd have - (well relatives would) ......

£968,789,266,564,660,600,000,000.00

about 9 years ago

bizarre, can't be true surely?

Execellent!

However if you had £1 back then you would have been a millionaire by today's standards.

motch

Dan: wrote: »

Execellent!

However if you had £1 back then you would have been a millionaire by today's standards.

True. I think at least one member of the family tree along the line would of pi**ed it up against the wall at some stage though

Cleaver

motch wrote: »

well spotted. Although I think it should be included

I just worked out (on a savings calculator not in my head!) if someone invested a £1 when the romans were about and christ was born, and they got 2.8% average on it a year, they'd have - (well relatives would) ......

£968,789,266,564,660,600,000,000.00

about 9 years ago

bizarre, can't be true surely?

Reminds me of this, which is over a lot of the internet in one giuse or another:

http://www.wheredoesallmymoneygo.com/was-selling-manhattan-for-24-such-a-bad-idea/

The sale of Manhattan by the natives to Peter Minuit in 1626 often includes a mention of the estimated sale price. The actual exchange was apparently for some trade goods which is estimated to have been worth $24. Often the view that the natives were short-changed is expressed in the same breath. I don’t know what the value of Manhattan would be today, but if we assume that $24 grew at a real rate of return of 5 - 6% (extrapolating the long term rate of return for real estate as sourced from Dr. James DeLisle’s paper: ‘Real Estate: A Distinct Asset Class or an Industry Sector?’, 1995), we might have a better idea…


$24 x 5% real rate of return x 382 years = $2.98 Billion
$24 x 6% real rate of return x 382 years = $111.44 Billion


It’s amazing the impact of 1% isn’t it?


If we try to figure out what $24 dollars was worth in today’s dollars back in 1626 we just calculate using the long term rate of inflation which most seem to agree on as being roughly 3%. Applying the math, we find that the natives received about $1.9 million in today’s dollars for Manhattan.


But if the natives had taken that money and invested in the stock market (bare with me) and earned a 7% real rate of return, they would have just over $4 trillion.



Who’s laughing now!

hundredk

ukcarper wrote: »

why thats not what happened in the early 70s

Thats because salaries increased as fast if not faster than house prices so salary:house price ratio did not increase.

Income 1974 = £2916, Income 1979 = £6000, = x2.06 increase
Income 2002 = £26644, Income 2007 = £35549 = x1.33 increase

House prices increased by approx by x1.75 for both periods, so ppl taking higher % of income to buy their house or get better property quicker.

http://www.mortgageguideuk.co.uk/first_time_buyers/mortgage-income-ratios.html

Can't see income increasing at 70's rates either.

hundredk

pickles110564 wrote: »

Yes but if people started off at the bottom of the price range then moved up in sensible steps there would be no problems. However all the doom mongers expect to jump straight in to a 5 bed detached with an acre of land, they need to get real.

Yes, thats my point - if they start in 2 bed terrace they might only need 3x salary but when banks offer 6x they think why wait, lets have the dream house and worry about paying for it later, after all the banks wouldn't lend it if they thought we couldn't pay it back....would they? 1 credit crunch and repo later....:eek:

Kenny4315

I'd say by 2019, we'll be 40% higher than the 2007 peak, so around the £280k mark.

That's some hefty stamp duty .... better start saving ...

LilacPixie

by 2019 I think we will be around 10% lower than 2007 peak. I think bottom Q1 2010 with a 40% average drop stangnant for 2-3 years then increases of around 5% a year 2013-2019

Kenny4315

motch wrote: »

I just worked out (on a savings calculator not in my head!) if someone invested a £1 when the romans were about and christ was born, and they got 2.8% average on it a year, they'd have - (well relatives would) ......

£968,789,266,564,660,600,000,000.00

I'm sure I've got a pass book in some kids name hanging about somewhere ... opened at the Bethlehem branch of HBOS .... with £1 and a free money box as a gift.

It hasn't had the interest put on for a couple of thousand years .... bet those banking BAR STEWARDS will claim the account now inactive.

ad9898_3

pickles110564 wrote: »

Yes but if people started off at the bottom of the price range then moved up in sensible steps there would be no problems. However all the doom mongers expect to jump straight in to a 5 bed detached with an acre of land, they need to get real.

Disagree with this, ironically it doesn't matter where you step on the ladder, but what is pretty much a certainty is that when you move 'up the ladder' you are taking on more and more debt. So even though you may feel richer, unless you have won the lotto or been given some inheritance the chances are you will be poorer.

It's a bit like 'rich Bev & Kev' and 'poor Bev & Kev' in that crappy daytime advert, when they pulled up by the side of each other at the traffic lights, the advert portrayed 'rich Bev & Kev' were better off because they had a newer car, that facts were they were poorer, because their newer car was funded by more debt.

I know it's against what we have been brainwashed to think in the last 10 years, but nothing really has changed, debt is not wealth.