Nationwide "Real" House Price Index rose 1.6% in June

Graham_Devon

HAMISH_MCTAVISH wrote: »

You've had a 17% average fall from peak, although much less for quality houses in nice areas, but more for an inner city newbuild. And you may yet see another few percent off. Thats more than enough, so why complain? Why the panic when prices rise? You've got your once in a generation buying opportunity, so why moan about it?:cool:

Errrrrr.

Does this not suggest something is wrong to you?

Property and the economy have to crash taking loads of people down with them for someone to be able to buy?!

Graham_Devon

Just seen this on HPC...

Oh shut up and enjoy the drop, at leasr we dont have another month of hamish waffling crap.

Ho hum

HAMISH_MCTAVISH

Graham_Devon wrote: »

Errrrrr.

Does this not suggest something is wrong to you?

Property and the economy have to crash taking loads of people down with them for someone to be able to buy?!

No, plenty of people could, and did, buy at peak. House buying has never been affordable for everyone. At different points in the cycle the percentage of people who can buy varies, but it's never been more than the top 70% of earners, and sometimes a lot less.

But with houses currently down 17% or so from peak, the bears have their buying opportunity, whether it be now or in 6 months when prices may be a few percent lower still.

So why the long faces?

HousingBear

HAMISH_MCTAVISH wrote: »

But with houses currently down 17% or so from peak, the bears have their buying opportunity, whether it be now or in 6 months when prices may be a few percent lower still.

So why the long faces?

You know very well that the bottom in housing will be longer than just six months. In the 1990s, it was at least three years of stagnation or minimal gains and things didn't really get going again until 1999. So to claim that the bears "have missed the boat" is a load of tripe.

This is a bull trap created mostly by cash buyers. When their cash is gone, there just isn't the mortgage lending to sustain or even increase prices at the moment. It's gone. Get over it.

chucky

HousingBear wrote: »

You know very well that the bottom in housing will be longer than just six months. In the 1990s, it was at least three years of stagnation or minimal gains and things didn't really get going again until 1999. So to claim that the bears "have missed the boat" is a load of tripe.

agree that the bottom shouldn't be only 6 months - however, it has happened in previous recessions that it was 6 months or even less - compare the 1980s or mid-1970s recessions and the return to peak of house prices. they don't mirror the 1990s - we shouldn't just be comparing just to the 1990s recession exclusively.

the only way that anyone can miss the boat in this period if you miss the good mortgage rates before they increase. you can buy near the bottom for a while but getting the opportunity to get a good mortgage rate will be a much shorter period

HousingBear wrote: »

This is a bull trap created mostly by cash buyers. When their cash is gone, there just isn't the mortgage lending to sustain or even increase prices at the moment. It's gone. Get over it.

bull trap/bear trap - it's impossible to predict or determine that this is the case.

your comments about cash buyers is slightly out.
the correlation between housing purchases and mortgage approvals is very close - if it was wider these would have been the cash buyers.
only goes out to April unfortunately but you can see that mortgage approvals are getting closer to property transactions so the cash buyer theory of the current house price rises isn't actually the case.

Yakubu22

HAMISH_MCTAVISH wrote: »

Oh heavens no, I wouldn't touch a new build with your wad, let along mine.....:rotfl:

I'm living very comfortably in a rather nice, 100 year old, solid, granite built house in a lovely part of Aberdeen. Now worth around 6% less than peak, and roughly what I paid for it. Plus I've saved a fortune by not wasting over 30K in rent between then and now. :T

Good times....:cool:

I'll buy it off you in 18 months time for 15% less than what its worth now :beer:

HousingBear

chucky wrote: »

agree that the bottom shouldn't be only 6 months - however, it has happened in previous recessions that it was 6 months or even less - compare the 1980s or mid-1970s recessions and the return to peak of house prices. they don't mirror the 1990s - we shouldn't just be comparing just to the 1990s recession exclusively.

Are you using inflation-adjusted prices?

Also, I would argue that those recessions weren't caused by the bursting of a housing credit bubble, whereas this one was. In which case, I would expect this bottom (when it comes) to be a lot longer.

chucky wrote: »

the only way that anyone can miss the boat in this period if you miss the good mortgage rates before they increase. you can buy near the bottom for a while but getting the opportunity to get a good mortgage rate will be a much shorter period

I might agree with you if those "good rates" were ten years or longer. But in the UK, we seem to think that two years is a "good long-term fix". What happens when remortaging time comes round and (as I think likely) LTVs have fallen further? Oh dear. Maybe that wasn't such a golden opportunity to buy after all.

chucky wrote: »

bull trap/bear trap - it's impossible to predict or determine that this is the case.

your comments about cash buyers is slightly out.
the correlation between housing purchases and mortgage approvals is very close - if it was wider these would have been the cash buyers.
only goes out to April unfortunately.

I agree that it is impossible to be absolutely sure right now - in three years time, we'll know. But unemployment is rocketing, the green shoots are turning to frazzled brown weeds, credit continues to tighten, interest rates are creeping up (despite the base rates staying at historic lows), the stock market is falling again, and the bond markets are looking increasingly fragile. Yet somehow, in the midst of all this, house prices are rising again and will continue to rise in a sustainable manner?

Time for one of those MSE emoticon thingies to express complete puzzlement.

ad44downey

You sound a bit desperate Hamish, you might have to flog your kilt to be able to buy something to eat.

HAMISH_MCTAVISH

Yakubu22 wrote: »

I'll buy it off you in 18 months time for 15% less than what its worth now :beer:

No you won't, because I buy and hold for the long term.:beer:
And year on year prices in Aberdeen are now only down 5.5%, have yet to fall back to Mar 2007 prices, are still rising today, and while they will dip a little over next winter the worst is now well behind us.

Given the rent on a similar 200K-ish property would be costing me 13K plus a year, and mortgage interest this year will cost me 2K, I'm still ahead versus renting since 2007, and that situation will remain the case.;)

chucky

HousingBear wrote: »

Are you using inflation-adjusted prices?

prices straight from the nationwide historic index.
can't argue about the length of the bubble - i have no idea.
however, i would say if it is a short bubble be prepared for another HPC in a few years not the 16 years since 1991.

HousingBear wrote: »

Also, I would argue that those recessions weren't caused by the bursting of a housing credit bubble, whereas this one was. In which case, I would expect this bottom (when it comes) to be a lot longer.

tut tut you haven't been reading up on the reasons for the mid-1970s recession.
it was due to exactly the same reasons we are having the same problems now with banks being bailed out (on a smaller scale) due to house prices dropping and bad lending... this is why i made the comment previously about just comparing to the 1990s recession
http://en.wikipedia.org/wiki/Secondary_banking_crisis_of_1973%E2%80%931975

HousingBear wrote: »

I might agree with you if those "good rates" were ten years or longer. But in the UK, we seem to think that two years is a "good long-term fix". What happens when remortaging time comes round and (as I think likely) LTVs have fallen further? Oh dear. Maybe that wasn't such a golden opportunity to buy after all.

rates about 6 months ago were between 4% and 5% on 5 year fixed for 70% LTV's. historically to me that is a very good rate, when rates have averaged around 7.5% in the past and future rates are due to shoot up.
so if you can get a rate like this on a low LTV with a good price for a property it's a good opportunity to buy.

however, the lack of lending and the low supply of quality property on the market makes this not applicable to anyone - very few people good 'miss' this boat. i think this is a fair comment.

HousingBear wrote: »

I agree that it is impossible to be absolutely sure right now - in three years time, we'll know. But unemployment is rocketing, the green shoots are turning to frazzled brown weeds, credit continues to tighten, interest rates are creeping up (despite the base rates staying at historic lows), the stock market is falling again, and the bond markets are looking increasingly fragile. Yet somehow, in the midst of all this, house prices are rising again and will continue to rise in a sustainable manner?

credit is actually starting to slacken off again.

when you say rates are creeping up - do you think it's due to the tranches of the fixed money being snapped up or swap rates increasing again?

it's not because of the swap rates going up because they've started to creep down again therefore it has to be the money being taken up.
my assumption here is that the banks can increase their margin on the next tranche of money they lend making additional profit on the margin between swap rates and their mortgage rate.
http://www.swap-rates.com/UKSwap.html