House prices could fall another 40% from here.

ad9898_3

I think the article reads quite well, it's based on historical evidence, and what we are seeing in the US at this time, I'm not saying that what happened in '89 -'96 will happen exactly this time, however using historical evidence plus increasing bank rates (compared to falling last time), ballooning public debt (reducing last time), tax rises after the election ( tax falls last time) etc and prices still fell......... all this is fact, not 'talk'. I think another 20% down minimum is odds on, with no HPI for a decade.

Now I've based my assumption on the facts I've just explained, if someone wants to counter this argument, feel free, but give me some facts about the next 5 years, like I have given above.

StevieJ

Graham_Devon wrote: »

I'm now at 3.5%, down from 6.75%.

So 3% above base from around 1% above. Although rumour has it SVR's are gonna go up soon?

You can buy a full house now, good luck, get that fix.

Thrugelmir

kennyboy66 wrote: »

Hindsight is a great thing, but do you imagine anyone investing in share trackers since that article is happy.

I'm a big fan of shares in the long run, but tax relief or not, you would be very lucky to sitting on a gain since he published that article.
I missed the bit where he advised not to invest in banks.

In fact his advice "big is best" would seem to guarantee you would be exposed to some financial sector.

He managed to make the FTSE 100 a buy at its highest value in 5 years.

Probably best to stick to writing about it rather than doing it.

I've held shares in my pension scheme for years. Not a fad. Until GB abolished dividend tax reclaims was even better. Never bought a single dot com share. As couldn't work out where the profit was going to be made. A considerable number of professional investment managers were bailing out of the "mortgage banks" well before the peak.

Never bothered with trackers. Buy for the long term. Cash generating well managed businessess. Don't churn as too expensive.

Yes got financial sector. Held HSBC and Standard Chartered for years. Llloyds was ok prior to HBOS merger. Though longer term a good bet once they rationationlise the 2 operations into 1.

My only investment objective was to grow at inflation plus 5% per annum. As its compounding that ultimately produces investment returns, ie reinvested income.

All very boring nothing exciting. But there again I've worked in finance for over 30 years. So little I've never experienced in one form or another.

Ignore the tax benefits of a pension at your peril. Don't have to invest in shares.

kennyboy66_2

ad9898 wrote: »

I think the article reads quite well, it's based on historical evidence, and what we are seeing in the US at this time, I'm not saying that what happened in '89 -'96 will happen exactly this time, however using historical evidence plus increasing bank rates (compared to falling last time), ballooning public debt (reducing last time), tax rises after the election ( tax falls last time) etc and prices still fell......... all this is fact, not 'talk'. I think another 20% down minimum is odds on, with no HPI for a decade.

Now I've based my assumption on the facts I've just explained, if someone wants to counter this argument, feel free, but give me some facts about the next 5 years, like I have given above.

The article is completly disingenuous when it talks about the ratio of average earnings. It quotes the Halifax figure of 5.01 for 1989 peak, then chooses to use a different denominator, when talking about now.

If he said that the ratio was below 3.5 for almost 10 years from 1992 onwards, and hit a low of 3.09, and then uses that to say the real house prices had another 25% to fall, then I would think that was a fair use of historical data.
He does not even bother to make the distinction between real and nominal house prices.

Finally,

Unemployment went up between 1989 Q4, almost doubling by 1993 Q3
Public debt did not reduce last time (at least not until 1998).
The tax burden did not fall between 1989 and 1995.

Check on the national statistic website.

Are you getting your "facts and talk" mixed up ?

Having said all that i think that no HPI for a decade is almost a certainty (well at least 8 years) and that 20% nominal falls are a possibility, although I would tend to say between 10% and 20% is the most likely scenario.

StevieJ

ad9898 wrote: »

Now I've based my assumption on the facts I've just explained, if someone wants to counter this argument, feel free, but give me some facts about the next 5 years, like I have given above.

You linked to that article so we could all have a good larf, cheers AD :beer:

Graham_Devon

StevieJ wrote: »

You can buy a full house now, good luck, get that fix.

I could have bought a full house when I bought this, but didnt. Certainly not going to now!

If I had, I would have been in about 10k negative equity now, instead of around the 2k I'm in.

ad9898_3

StevieJ wrote: »

You linked to that article so we could all have a good larf, cheers AD :beer:

Well have a good laugh, I'm waiting................

michaels

Now that would be a real kick in the Gonads with libor still falling and off about 50 basis points since the BOE last moved the base rate -for those with a decent deposit rates should by rights be coming down...can we refer the banks to the monopolies commisson cos the current mortgage market looks far from competitive to me!

Graham_Devon wrote: »

I'm now at 3.5%, down from 6.75%.

So 3% above base from around 1% above. Although rumour has it SVR's are gonna go up soon?

Thrugelmir

michaels wrote: »

Now that would be a real kick in the Gonads with libor still falling and off about 50 basis points since the BOE last moved the base rate -for those with a decent deposit rates should by rights be coming down...can we refer the banks to the monopolies commisson cos the current mortgage market looks far from competitive to me!

The majority of institutions don't lend or base their rates on Libor.
As its not the basis on which they secure funding.

bluey890

ad9898 wrote: »

Macaque, is this you in disguise ?:D, on a serious note this guy has made some good predictions in the past, so it's worth a read.

http://www.moneyweek.com/investments/property/house-prices-could-fall-another-40pc-from-here-14923.aspx

Experts couldn't even predict the Spain vs USA result.
I am not going to listen to them anymore!