Demographia 2009: It IS a supply shortage after all.....

abaxas

Please note that Hamish McBruno is always right.

You cant reason with delusion.

michaels

But what determines demand? Having traded a fair few things in your time I would have thought you could see that future price expectations are a key component of demand for assets, often overriding any fundamentals in the short term and after all in the long term we are all dead.

Generali wrote: »

It is supply and demand. That's all there is to set prices.

My belief is that demand fell as availability of mortgage funds dried up. Subsequently supply has fallen too so prices have risen.

chucky

Generali wrote: »

It is supply and demand. That's all there is to set prices.

My belief is that demand fell as availability of mortgage funds dried up. Subsequently supply has fallen too so prices have risen.

you shouldn't be saying things like this Generali, it's not in the scope of people's viewpoint to understand this.

the market sets the price - not what people on this forum wish that they should be.

chucky

michaels wrote: »

But what determines demand? Having traded a fair few things in your time I would have thought you could see that future price expectations are a key component of demand for assets, often overriding any fundamentals in the short term and after all in the long term we are all dead.

it's more what drives demand than determines demand - multiple factors will drive demand. the same factors could drive or even reduce supply too.

HAMISH_MCTAVISH

chucky wrote: »

you shouldn't be saying things like this Generali, it's not in the scope of people's viewpoint to understand this.

the market sets the price - not what people on this forum wish that they should be.

:rotfl:

I preferred the unedited version.:D

Generali

michaels wrote: »

But what determines demand? Having traded a fair few things in your time I would have thought you could see that future price expectations are a key component of demand for assets, often overriding any fundamentals in the short term and after all in the long term we are all dead.

Demand is defined (by me) as being the number of purchases possible by people willing and able to pay any given price.

If people think the price of something they want is likely to rise in future then they will be willing to pay more today in order not to pay even more tomorrow.

The other part of demand is ability to pay. For UK housing that's usually a function of incomes, employment, Government subsidy on house purchase using debt (eg MIRAS) and credit availability.

michaels

We are agreed, but it is my contention that prices over the recent 'cycle' have been more influenced by expectations than credit market conditions

Generali wrote: »

Demand is defined (by me) as being the number of purchases possible by people willing and able to pay any given price.

If people think the price of something they want is likely to rise in future then they will be willing to pay more today in order not to pay even more tomorrow.

The other part of demand is ability to pay. For UK housing that's usually a function of incomes, employment, Government subsidy on house purchase using debt (eg MIRAS) and credit availability.

Generali

michaels wrote: »

We are agreed, but it is my contention that prices over the recent 'cycle' have been more influenced by expectations than credit market conditions

I think it's both as falls in house prices started as credit dried up. I don't think there's any way either of us can be shown to be right.

wigglebeena

phil_b wrote: »

Ahhh good choice. Alcohol and ginger beer, 2 of my fave things. Think I'll nip to saino's and load up.

They don't do the extra strong hold-on-to-your-socks own-brand anymore. ********. As if knocking the black pepper olive oil fried crisps on the head wasn't bad enough.

HAMISH_MCTAVISH

baileysbattlebus wrote: »

A family across the road do the same, they sold 2 houses and bought a bigger one - the mother also has downstairs living accommodation.

This type of living is quite common in the Mediterranean countries - who knows it could become more common here.

In the housing boom of the 1980's I knew several people who bought property together - and they were only work colleagues - it was the only way they could afford a house - it was quite common in London for 2, 3 or 4 people to buy together. It's not unheard of.

Correct.

Extended family living is the most likely, but friends have been buying houses together for decades, it's not new.

The point remains people have to live somewhere.

The more earners there are in a house, the more that household can afford to pay for housing. Whether it be rented or bought.