Property crash soon???

Pal

dwsjarcmcd wrote:

njwd wrote:

Something that can't be disputed is that once your mortgage is repaid, that is cheaper than renting, which is my point

In a stagnant property market, once you have saved up £300,000 into a savings account, instead of paying it to buy a house, you are probably financially better off renting. No maintainance, stamp duty, fees...

There threads are facinating in that posters always seem to start arguing about the wrong thing, namely home ownership. ("its always better to buy" "houses always go up in the long term" "rent/mortgage interest is dead money" etc etc")

These are all completely irrelevant.

The ONLY people who visit this board are those that already own and are concerned about house prices falling (and so try and talk them up), and those that do not own and either want to talk prices down, or are asking whether it is currently the right time to buy. Everyone reading or posting on these threads knows full well the benefits of home ownership over renting, particularly when you own a house outright instead of mortgaged. (What we need is another button next to "thanks" called "Thanks for pointing out the blindingly obvious".

The real question is NEVER "Should I buy a house?" or "Should I rent?".

The real questions are: "Should I buy a house NOW?" or "Should I sell my house and rent for a period NOW". Essentially the title of this thread is correct "Is a property crash going to happen SOON?"

It is inevitable that one will happen eventually, whether next week or next century. It is also inevitable that house prices will rise again at some point, although whether that will be from the current high levels or from a lower level is anyone's guess.

The real debate is WHEN (not IF) one of these is going to happen, and is it worth taking action so we can profit from it, either by selling to rent, or waiting to buy.

These threads really should be about economics, rather than home ownership vs renting.

NSR2

Pal wrote:

...
The real debate is WHEN (not IF) one of these is going to happen, and is it worth taking action so we can profit from it, either by selling to rent, or waiting to buy.
...

I agree with this.
Now I want to try and put together a buch of economic checks, to see where the markets heading next.

I suggest looking at:
1) House building compaines
2) DIY chains
3) Home improvement firms.
4) Job losses vs job gains

Looking at sales volume, as well as overall sales.
Any suggestions where to look? (have to goto work now.... bye )

Pal

NSR2 wrote:

I suggest looking at:
1) House building compaines
2) DIY chains
3) Home improvement firms.
4) Job losses vs job gains

Looking at sales volume, as well as overall sales.

A few problems with some of these indicators, particularly when taken in isolation.

Home building companies are all announcing record profits, but firstly that is historical information (no guide to the future) but also it may have more to do with accounting than actual number/price of houses built and sold.

DIY chains are currently really struggling, but summer is late, so comparison performance to March last year is going to be poor. Anyone looked at the stats for B&Q etc?

Home improvement firms? No idea, but probably doing well. Extending is the new trading up, apparently. Presumably that restricts supply, but also indicates a fall in the number of buyers. Probably irrelevant if the supply of houses and number of buyers is rising or falling in proportion. It is demand/supply inbalance that causes prices to rise or fall, along with mortgage interest rate costs and lending criteria, of course.

Job losses are rising, job gains falling, unemployment up, albeit slowly. Pending housing price problem?

Sales volumn and overall sales can be as much about lack of supply than demand, so falling stats can still be an unreliable guide to future price movements. It doesn't matter if only two people in the entire country want to buy if there is only one house for sale. (You get my drift. )

Still, a much better starting point for discussion than "Renting is dead money"!

nmiah786

WOW...who started off this lovely thread!!!!

Been stuffing myself with popcorn for the last two days!!! :rotfl:

Let buyers buy and renters rent........no point having the same discussion for the 100th time....

Those who want to buy will buy and those who want to rent will rent regardless. Its their personal informed choice, thats life!!!

van_persie

Pal wrote:

dwsjarcmcd wrote:

In a stagnant property market, once you have saved up £300,000 into a savings account, instead of paying it to buy a house, you are probably financially better off renting. No maintainance, stamp duty, fees...

There threads are facinating in that posters always seem to start arguing about the wrong thing, namely home ownership. ("its always better to buy" "houses always go up in the long term" "rent/mortgage interest is dead money" etc etc")

These are all completely irrelevant.

The ONLY people who visit this board are those that already own and are concerned about house prices falling (and so try and talk them up), and those that do not own and either want to talk prices down, or are asking whether it is currently the right time to buy. Everyone reading or posting on these threads knows full well the benefits of home ownership over renting, particularly when you own a house outright instead of mortgaged. (What we need is another button next to "thanks" called "Thanks for pointing out the blindingly obvious".

The real question is NEVER "Should I buy a house?" or "Should I rent?".

The real questions are: "Should I buy a house NOW?" or "Should I sell my house and rent for a period NOW". Essentially the title of this thread is correct "Is a property crash going to happen SOON?"

It is inevitable that one will happen eventually, whether next week or next century. It is also inevitable that house prices will rise again at some point, although whether that will be from the current high levels or from a lower level is anyone's guess.

The real debate is WHEN (not IF) one of these is going to happen, and is it worth taking action so we can profit from it, either by selling to rent, or waiting to buy.

These threads really should be about economics, rather than home ownership vs renting.

I read your points with interest and on the whole, agree. Timing is everything in a cyclical market and this one is no different. I would argue, however, that not all homeowners posting on here all have a vested interest in talking prices up. Yes, there are many who are seduced by their paper wealth but for many of us (myself included) a property price correction would be most welcome as it would make trading up so much cheaper! I despair at friends who openly boast about the value of their 2 bed houses but then end up shelling out 100K more than they should be for a 3 bed when the family grows...a false economy if ever there was one. And the banks are the only winners.
A house price crash would benefit so many more than just FTBs and STRs.

Doozergirl

I'm thinking that a cafe bar of some kind might be quite lucrative.

Several different types of coffee, juices, paninis, sushi and wine by the glass to encourage a convivial atmosphere. :cool:

Or am I aiming at the wrong target audience? Should it be hot dogs, nachos and M&Ms (peanut and plain I think) for those wishing to purely spectate?

Answers on a postcard.

:A

BobProperty

Flippin' 'eck! You go off forum for a couple of days, watch a tv prog about estate agents and when you come back there's two huge thread that take an hour each to read.

Deemy - have you got some long oil calls or is that too risky? Nearly 50% retracement, is that Fibonacci's 62%? (I haven't studied this for years!)
Didn't interest rates in Japan go up recently? I think it was only by 0.1% but when you're starting from 0.0% that's a significant step.

When will it happen (house price crash)? Well I'm going for it starting with the introduction of HIPs next year, which will quieten the market and be an excuse/trigger for lower prices. So last 2 quarters 2007, really noticable by 2nd quarter 2008.

I'm agreeing with a lot of what has been said about the wages / price ratio being out of line with the long term trend and think that the low interest rates have just delayed the start of a correction. (Makes note to self to bump post in 18 months time ).

meanmachine_2

The irony here is that, although some of us hate the recent rampant HPI, really it's the reason why these threads are the most popular of all.

Housing is seen as a great wealth generator.

I promise you, during any prolonged correction, if you tried to start a topic about housing as an investment you'd get a couple of replies at best.

Like after the early 90s crash, people would have looked at you very strangely had you talked about property in terms of yield, profit etc.

I have an odd feeling that, the moment property starts to fall in value, I'll go right off it!

Anyway, as Pal points out, yes of course over the longer term, buying makes perfect sense. No one would dispute that. We're talking about whether now is a good time to buy. And since none of us have foresight, it really is all guesswork.

But again, the point to stress is that, those who bought five years ago, well done for buying before the boom - you've certainly gained there - but you've only just started paying off your capital. There's a long way to go yet, and that's not taking into account a remortgage or a move up the ladder, which puts you right back where you started.

tomstickland

Well, I've been looking at rental prices in the local paper tonight. In Cheltenham and Gloucester a studio flat is about £300-£450 pcm, a 1 bed flat around £450-500 pcm and 2 bed flats/houses £450-£600 area.
My 1 bed flat that I'm buying will cost me £490 per month (repayment mortgage + service charges), so I'm paying slightly more than the average rental price for the same property.

F_T_Buyer

meanmachine wrote:

Housing is seen as a great wealth generator.
QUOTE]

Generator? More like distributor/transferer.

From: The FTBs
To: Existing HomeOwners


Remember: Wealth is never lost, it is merely transfered.