50% rise in house prices needed before crash

F_T_Buyer

Doozergirl wrote:

It wasn't a criticism of you; I hope you didn't take it that way

No criticism taken. I would like meanmachine to explain a little more... or link to a post of his/hers.

Afterall, I could be wrong - but only with the timing! :eek:

FaTB

THE_PROPHET wrote:

Oh no, Mrs. Welly.
It is not glue that I am smelling. It is the smell of HIS success.

The 2nd of the Five Final prophecies is thus:

On the Day of Fools,
In the House of Fools,
You will smell what HE is cooking.

Its that MONKEY bloke from the HPC forum !! :j

You always made me laugh, good to see you posting again !

claz

correct me if i am wrong but if house prices crash etc and what everyone is predicting can i ask what would happen to the rental market

i have just bought a house and in 3 months time my partner will be a qualified electrician so luckily we will not have any problems money wise, if the market did crash we would still be able to meet the monthly repayments on the mortgage and still have a roof over our heads

Pal

I am letting this run because I am curious. However please note that prophecy three was near enough to the knuckle, so if five isn't good I am going to delete all your strangely off-topic posts.

Or I might move them to the Arms where they seem to appreciate people posting drivel!

Heres hoping for an interesting and house price related prophecy five!

van_persie

claz wrote:

correct me if i am wrong but if house prices crash etc and what everyone is predicting can i ask what would happen to the rental market

i have just bought a house and in 3 months time my partner will be a qualified electrician so luckily we will not have any problems money wise, if the market did crash we would still be able to meet the monthly repayments on the mortgage and still have a roof over our heads

Have you got a fixed rate mortgage? That's the only way to know whether you can afford monthly payments - you'll lose out when IRs drop but benefit when they rise...and rise they will, IMHO.

The rental market may see an increase in demand as people hold off buying in the event of a crash, leading to raising of rents. But this will ease off as buyers return to the market and crucially, it's cheaper to buy than to rent.

meanmachine_2

I'm not sure what would happen this time should property "crash" again.

I know that last time you had to fight others for a decent rental place - and you were paying well over the odds for the privilege.

Buying simply wasn't on most people's radar - not because it was expensive. Quite the opposite. Years of falls had driven everyone away.

Why would you buy when the place could be worth even less next year? It really was only the brave who bought (and the smart, as it turned out).

People think in packs.

It can be very lonely having a mind of your own - particularly in this country. The masses will think you're an idiot....or mad.

Sound familiar?

Wow, the mid 90s really were different times. I remember approaching a broker about a mortgage and being refused as I was on a 12 month contract.

Now I think I'd be lucky to get out of the office alive without them stuffing cash into my trousers.

FaTB

meanmachine wrote:

People think in packs.

It can be very lonely having a mind of your own - particularly in this country. The masses will think you're an idiot....or mad.

Sound familiar?

Too right mate !!

I spent most of last night in a restaurant getting an ear bashing from all my freinds for not buying a place at the moment.

I got the usual "House prices only go up" sort of crap.

When I asked why House prices could not come down again (as they did big style in the early '90s) they had no argument other than "I can't see that happening"

Also none of them seemed to have any understanding of why Ir's fluctuate, and why they might be under pressure to put them up this year !!

They are ignorant, but think they are financial wizzards, just because they happened to buy during the biggest speculative bubble in history.

For 99% of people it was more luck than good judgement !!!

I stood alone last night, and they think i'm mad because I don't think with the crowd !!

Sand_Man_2

if the Housing market crashes, all these FTB would flood the market. but would'nt this just drive up the price again

so why would there be a crash in the first place

NervousYetFeisty

Sandman, I think meanmachine has partly answered this:

Buying simply wasn't on most people's radar - not because it was expensive. Quite the opposite. Years of falls had driven everyone away.
Why would you buy when the place could be worth even less next year? It really was only the brave who bought (and the smart, as it turned out).

F_T_Buyer

Sand_Man wrote:

if the Housing market crashes, all these FTB would flood the market. but would'nt this just drive up the price again

so why would there be a crash in the first place

Because most house buying at the moment is speculative, from the FTB buying now fearing they will miss the boat, to the struggling couple who doesn't want to sell up because they think "it's going up in value."

Housing demand = genuine demand for shelter + speculative demand

Infact, you could argue all house buying is speculative at todays prices because renting is in general cheaper than owning!

What happens when you remove the 'speculative' part?