UK Property to HALVE Between Now and July 29, 2010

Graham_Devon

mewbie wrote: »

Does that mean that the recent Bubble wasn't really a bubble at all? That house prices are perfectly reasonable? I'm confused, because I thought FTB's gave up buying about six years ago and it was only the laxity of credit and the BTL's snapping up overpriced property out of mewed equity that kept the whole charade going.

Do you honestly believe that housing is now fairly priced Mr. McTavish?

Queue Aberdeen....

HAMISH_MCTAVISH wrote: »

The extremes illustrate the dichotomy that exists within the statistics better than anything else.

What language is this please?

HAMISH_MCTAVISH wrote: »

Bears rightly point out prices reached 7 times earnings....... Which can be done when you include the earnings of the very lowest paid in society, who will never be in a position to buy a house, and never have been.

Bulls rightly point out that averages of actual buyers never crossed 3.5 times even at peak. And that the most consistent and longest running record of average multiples is the Halifax, which also shows todays prices are in line with long term averages.

There are lies, damn lies, and house price statistics. Pointing out the extremes, on both sides, is key to countering the opposition.

If you want the truth, I'll give it to you, but you may not like it and it won't lead to an entertaining debate....

Right, so your problem is that you regard average wage earners as people who should never be able to afford a house.

Not gonna bother getting into the actual average wage and the fantasty 38k average wage halifax use, as it means getting a graph out, which means the whole is a chart / doodle / flying rhino argument comes to the table once again.

Average is not 38k. End of.

HAMISH_MCTAVISH

mewbie wrote: »

Do you honestly believe that housing is now fairly priced Mr. McTavish?

Housing is currently in line with the long term average in terms of income multiples on the longest running and most consistent tracker of these things (halifax index).

Whether that is fair or not is a rather more subjective question.;)

Graham_Devon

HAMISH_MCTAVISH wrote: »

Housing is currently in line with the long term average in terms of income multiples on the longest running and most consistent tracker of these things (halifax index).

Whether that is fair or not is a rather more subjective question.;)

Do you believe it though? Do you honestly believe the average wage for a male is currently £38,000?

Thats £3116 a month, £790 a week, £160 per day, or £22.80 per hour.

Bear in mind, minimum wage is something like £5.60 per hour. Also bear in mind that that above would be average, i.e. LOADS earning over it.

This is my problem with the bulls just saying "HALIFAX, HALIFAX" every time in their arguments, they never actually look any further than what halifax tells them, as it suits.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Not gonna bother getting into the actual average wage and the fantasty 38k average wage halifax use, as it means getting a graph out, which means the whole is a chart / doodle / flying rhino argument comes to the table once again.

Average is not 38k. End of.

Which is irrelevant. Housing IS currently at the long term trend when measured against full time male income (mean) today versus the last half century average.

If you want to argue that it is more expensive to lesser paid people, I can't dispute that. If you want to argue that women make less money, I can't dispute that either. If you want to argue that there are less full time jobs in society today than there were 50 years ago, I'd take your word for it.

But if the central thesis of your argument then becomes that houses should decline in value against the long term full time male average to compensate for the fact that there are less full time males than there were, then I obviously will dispute that.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Do you believe it though? Do you honestly believe the average wage for a male is currently £38,000?
.

I believe that the data set is consistent.

In other words, I believe that if the internet had been around 50 years ago, there would have been just as many people sitting around saying....

Graham_Devon wrote: »

Do you believe it though? Do you honestly believe the average wage for a male is currently £100 a year?
.

(or whatver it was then)

Graham_Devon

It's a simple question.

Do you believe it?

The dodging of the question seems to suggest you do not believe it as you know it is silly to suggest the average male is earning 38k a year. You don't want to tell us you believe it, so you simply dodge..

So why use it? Why live in this fairy land, posting statistics even you do not believe?

I know they suit your argument, house prices at 158k or whatever are 4x wages. You know this is not the case though, so why pedal it? Why not speak about reality instead as thats what actually counts.

Can you not see that picking statistics and pedaling them, but not actually believing them yourself is a little pointless?

HAMISH_MCTAVISH

Graham_Devon wrote: »

It's a simple question.

Do you believe it?

The dodging of the question seems to suggest you do not believe it as you know it is silly to suggest the average male is earning 38k a year. You don't want to tell us you believe it, so you simply dodge..

So why use it? Why live in this fairy land, posting statistics even you do not believe?

I know they suit your argument, house prices at 158k or whatever are 4x wages. You know this is not the case though, so why pedal it? Why not speak about reality instead as thats what actually counts.

Can you not see that picking statistics and pedaling them, but not actually believing them yourself is a little pointless?

You miss the point.

If you want to argue that house prices are too expensive today, and always have been too expensive, then I obviously will not use stats to disprove such a subjective assertion.

If you want to argue that most people do not make the "average" full time male wage, then I will agree with you.

If you want to argue that prices today are too expensive, and they used to be more affordable, then there is data that exists to contradict you, so obviously I will point it out.

Graham_Devon

HAMISH_MCTAVISH wrote: »

You miss the point.

If you want to argue that house prices are too expensive today, and always have been too expensive, then I obviously will not use stats to disprove such a subjective assertion.

If you want to argue that prices today are too expensive, and they used to be more affordable, then there is data that exists to contradict you, so obviously I will point it out.

I miss the point?

No, I don't think I do.

I'm not arguing with the stuff you keep saying "if you want to argue". I am asking a very very simple question which you seem very reluctant to answer.

A) Do you believe the average wage is 38k? (I think your reluctance has answered this, no you don't).

So if you don't actually believe the stats yourself. Why use them to try and tell all us lot something which you don't even believe yourself?

I don't think I'm going to get any further on this. I think the point I appear to be missing has been well and truly proven.

By the way, your not the only one to not believe the stats you use. I have asked the same question to two others who insist on using them, they simply declined to comment

HAMISH_MCTAVISH

Graham_Devon wrote: »

I miss the point?

No, I don't think I do.

I'm not arguing with the stuff you keep saying "if you want to argue". I am asking a very very simple question which you seem very reluctant to answer.

A) Do you believe the average wage is 38k? (I think your reluctance has answered this, no you don't).

Again, it's not relevant. The average single wage is not 38K. (although the true average household income probably is close to it)

So if you don't actually believe the stats yourself. Why use them to try and tell all us lot something which you don't even believe yourself?

I don't think I'm going to get any further on this. I think the point I appear to be missing has been well and truly proven.

Far from it. You have yet to make a point. Let alone prove it.

Cleaver

Graham_Devon wrote: »

I miss the point?

No, I don't think I do.

I'm not arguing with the stuff you keep saying "if you want to argue". I am asking a very very simple question which you seem very reluctant to answer.

A) Do you believe the average wage is 38k? (I think your reluctance has answered this, no you don't).

So if you don't actually believe the stats yourself. Why use them to try and tell all us lot something which you don't even believe yourself?

I don't think I'm going to get any further on this. I think the point I appear to be missing has been well and truly proven.

By the way, your not the only one to not believe the stats you use. I have asked the same question to two others who insist on using them, they simply declined to comment

I don't think the average wage is 38k. But the 'average' people who buy houses tend to be couples. A lot of couples (dunno about average) will earn between 40k and 50k a year between them. An average house is what, around £155k? So that's about 3.5 x earnings.

I still think it'd nice for houses to be more affordable, especially down south. But the above scenario I've given isn't that mental is it?

Take where I live, Manchester. And let's take an 'average' couple. One is, I dunno, a police officer earning £30k. The other works part time (so they can look after the kid(s)) and earns around £9k a year working around 20 hours per week as a admin office type person. They want to buy a house as they've spent the last 4 years saving 15% of their net wages and have a £20k deposit.

They could buy this 3 bed semi in Eccles:



It's on for £120k, so after their deposit they would need to borrow about 2.5x their earnings.

Or they could buy this, a 4-bed terrace in Failsworth:



At £130k, they'd need to borrow about 2.8x earnings.

Or maybe this 3-bed bungalow in Beswick:



It's on at £99k, so they'd need to borrow around 1.9x earnings.

So whilst I think falling prices are still a good thing, I'm not that sure (in my area) that all houses are somehow out of the reach of average people, which is often the impression given on this site. Move to areas outside of Manchester (Wigan, Bolton, Bury etc.) and your money goes even further.

Not trying to score bull / bear points here, just my point of view.

Edit: Can I just add that all of the above is why I don't see property halving between now and this time next year. It would mean the top house being on for £60k, the middle one being on for £65k and the bottom one for £50k. It would mean that the 'average' couple I've outlined above would be able to buy a house with an average-y deposit and only need to borrow less than 1x their earnings. I think demand for housing would be too high for prices to fall anywhere near this.

Could new build developments in Manchester halve by this time next year? Of course they could. Everyone knows they are made out of paper, there is zero demand and too many of them around. But these new-builds are a small percentage of the market and a bit of an amonaly in the grand scheme of things.