"Why I hate high house prices"

geoffky

HAMISH_MCTAVISH
Serious MoneySaving Fan


Join Date: Jan 2009
Post Count: 871
Thanked 1,064 Times in 511 Posts





2.) Bad for first-time buyers

Untrue.... The biggest barrier to entry into the housing market is not the house price, it is the deposit size. Far more potential FTB's could have bought a house in 2007 than can today, due to the excessive size of deposit
that the crash has caused.


THIS JUST MAKES YOU LOOK SILLY....

Generali

inspector_monkfish wrote: »

what would an equivelent poky 2 bed terrace cost in a halfway decent Paris/New York/Madrid suburb or any major european city cost?

Like for like, my experience of most other housing markets (excepting Tokyo and the Asian city states) is that suburban London is expensive and you get less for your money than other cities.

London is still a fantastic city IMO. Just housing is expensive and scarce.

lostinrates

inspector_monkfish wrote: »

what would an equivelent poky 2 bed terrace cost in a halfway decent Paris/New York/Madrid suburb or any major european city cost?

This is an important question. A fmily member sold a large split level flat in a ''desirable'' one two area and boguht a vastly better one in a good equivalent NY address with the same input. We were staggared because we had the received impression that it would be more expensive, and while I'd say he was lucky, it seems fair. On rents, we paid vastly less in Milan than in London, but the areas/flats weren't eqivalent, and there were other considerations. My s-i-l was living in Paris at the time, paying less than london or new york, more equivalent to our rent in Milan, I have no idea what she pays now in nother major US city. The interesting thing would also be how averages are made up (extremes of nice/poor housing or more availability arougn the middle).

inspector_monkfish

lostinrates wrote: »

This is an important question. A fmily member sold a large split level flat in a ''desirable'' one two area and boguht a vastly better one in a good equivalent NY address with the same input. We were staggared because we had the received impression that it would be more expensive, and while I'd say he was lucky, it seems fair. On rents, we paid vastly less in Milan than in London, but the areas/flats weren't eqivalent, and there were other considerations. My s-i-l was living in Paris at the time, paying less than london or new york, more equivalent to our rent in Milan, I have no idea what she pays now in nother major US city. The interesting thing would also be how averages are made up (extremes of nice/poor housing or more availability arougn the middle).

...and breath out.....

PasturesNew

Bad for renters because ultimately the amount of rent landlords ask for covers the mortgage of the property, however much that was.

The choice between renting, or being homeless, quickly becomes a reality for many.

Where I used to live, there were people living in sheds - and still paying rent on them, but it was a bit cheaper than renting a bunk bed space in a room in the adjoining house. 4-6 to a room they were in the house ... and 3 in the 10'x8' old shed (not even a nice shed).

Afriend_2

PasturesNew wrote: »

Bad for renters because ultimately the amount of rent landlords ask for covers the mortgage of the property, however much that was.

The choice between renting, or being homeless, quickly becomes a reality for many.

Where I used to live, there were people living in sheds - and still paying rent on them, but it was a bit cheaper than renting a bunk bed space in a room in the adjoining house. 4-6 to a room they were in the house ... and 3 in the 10'x8' old shed (not even a nice shed).

I wasn't aware Landlords could let sheds as accomodation. It sounds a little illegal to me.

Harry_Powell

3.) Bad for labour mobility

Isn't this the case for home ownership in general rather than releated to cost? Certainly people who rent have far greater mobility than people who own.

dharm999

Personally they are very bad for my wallet as they make my wife believe we have more money because the equity we have in our house goes up. As a result, many handbags and shoes are bought! Its good for Lulu Guinness, Modalu and Biasia retailers. Its like Christmas every day.

DaddyBear

HAMISH_MCTAVISH wrote: »

1.) Bad for businesses

Untrue... Good for businesses. Up to 8% of consumer spending was from MEW, and a booming housing market creates tremendous need for all sorts of household furnishings, appliances, consumables, etc.

2.) Bad for first-time buyers

Untrue.... The biggest barrier to entry into the housing market is not the house price, it is the deposit size. Far more potential FTB's could have bought a house in 2007 than can today, due to the excessive size of deposit that the crash has caused.

1. You use this argument so many times. The %of GDP you quote is from boom times. Maybe you should look up the % of GDP that MEW accounted for in the late 90's. How can you think that excessive MEWing is good for the economy? It is one of the factors that led to this recession.
Low house prices lead to lower mortgage costs which lead to higher levels of disposable income because people don't need to take out 5 times joint income for a starter home. Simples.

2. I still don't know whether you actually believe the !!!!!! you type or if you are trolling. I agree that deposit size is a issue but it's a function of the house price. If the average house price was 100k like it should be, the deposit is much less of an issue. If you are suggesting that we return to 100% mortgages then you are an idiot.

wolvoman

DaddyBear wrote: »

Low house prices lead to lower mortgage costs which lead to higher levels of disposable income because people don't need to take out 5 times joint income for a starter home.

That is not sustainable. People with big deposits or those who can afford higher earning multiples would just buy up more property and push prices higher very quickly.


The more property falls in price, the bigger the next boom will be.