Houses overvalued still?

nembot

RDB wrote: »

When was the last time house prices were undervalued then? Mid 90's?

When will they be undervalued again?

Possibly in about 2/3 years time - nobody really knows.

Sir_Humphrey

I agree that houses were undervalued in the mid-1990s, but based on income multiples and rent/value ratios they are clearly still overpriced now.

Looking at flats in the postcodes and I am interested in (mainly South Croydon), I am seeing flatlining prices in 2009 with very low volumes. This was confirmed for me today by looking up asking and selling prices on home.co.uk. Meanwhile, I continue to save about 20% of my net income a year.

Only another 15% fall would be enough for me to afford to buy what I am after on my current income and deposit - with a promotion I could buy at current levels. However, this is with lots of parental help.

So all-in-all there is little risk on me waiting longer. Even an (unlikely IMO) 10% rise next year would just indicate a renewed bubble with the predictable outcome if it were allowed to inflate.

EDIT: I have worked out that I am over £10-20k better off from not buying from the time I could have done (which would have been a far inferior place to what I am looking at now). This is on the most conservative estimate, taking into account all factors, such as interest not paid, rent, principle I would have paid off, HPI in the area I could have afforded, Stamp Duty, Council Tax (which is included in my rent), maintenance and furnishing/fittings depreciation since Jan 2006.

RDB

HAMISH_MCTAVISH wrote: »

Yes, houses in the UK in the mid 90's were significantly undervalued, both against long term trend here, and against other comparable countries internationally.

The 90's were not normal prices, they were the buying opportunity of a lifetime.

This graph illustrates just how cheap they were compared to other countries.

Hamish do you think there will be a time again when house prices are undervalued like they were in the 90's?

If your answer is yes when would you say?

chucky

Sir_Humphrey wrote: »

So all-in-all there is little risk on me waiting longer. Even an (unlikely IMO) 10% rise next year would just indicate a renewed bubble with the predictable outcome if it were allowed to inflate.

a good strategy - have you accepted that mortgage rates will not be higher until you buy or will you be needing a mortgage?

sss555s

Thrugelmir wrote: »

I'm aware of what a solution is. You need to understand the basics of problem first to work it through though. Basing it on hopes is little more speculating.

No one said they were good solutions but solutions all the same and yeah i think speculating has a lot to do with the housing market and when/when not it's over priced.

HAMISH_MCTAVISH

RDB wrote: »

Hamish do you think there will be a time again when house prices are undervalued like they were in the 90's?

If your answer is yes when would you say?

I think it is extremely unlikely as long as we continue to add 408,000 people a year to the UK's population, needing 250,000 new houses, but only build 80,000 per year.

When population growth ends, as it surely must eventually, and housebuilding catches up, as it no doubt will, then prices will stop rising, and a long term decline against real income will begin.

This will not happen in my lifetime though, nor the lifetime of anyone posting on this board. The children of this generation may see such a thing towards the end of their life, and the grandchildren almost certainly will.

HAMISH_MCTAVISH

Sir_Humphrey wrote: »

EDIT: I have worked out that I am over £10-20k better off from not buying from the time I could have done (which would have been a far inferior place to what I am looking at now). This is on the most conservative estimate, taking into account all factors, such as interest not paid, rent, principle I would have paid off, HPI in the area I could have afforded, Stamp Duty, Council Tax (which is included in my rent), maintenance and furnishing/fittings depreciation since Jan 2006.

I'd be interested to see the workings of that calculation, as I've done somthing similar and estabished that I am over £30,000 better off by buying in 2007 than I would have been by renting since then.

doire_2

nollag2006 wrote: »

I have done it already !!

I have sold my house and children, and am buying lots of gold, while STR'ing

You have children? I thought you were about 12

RDB

GDB2222 wrote: »

The Bunker-Hunts were tried/convicted for cornering the silver market around 1980, so the price of silver then was vastly inflated.

You like most people have just read a few things about what happened to gold and silver in 1980. But like most people you dont have your facts right.

The actual top of the spike was over $52 oz.

Yes the Hunt brothers had a lot to do with it, but how can you explain the same thing happening to gold?

Gold has already way passed its 1980 high, silver is nowhere near yet.

RDB

HAMISH_MCTAVISH wrote: »

I think it is extremely unlikely as long as we continue to add 408,000 people a year to the UK's population, needing 250,000 new houses, but only build 80,000 per year.

When population growth ends, as it surely must eventually, and housebuilding catches up, as it no doubt will, then prices will stop rising, and a long term decline against real income will begin.

This will not happen in my lifetime though, nor the lifetime of anyone posting on this board. The children of this generation may see such a thing towards the end of their life, and the grandchildren almost certainly will.

Can you post where on Earth you get these figures from.

I was just reading something the oposit, how all the forigners are leaving in droves because the pound is falling so much they can earn more in their own countries.