the house price problem

nembot

Nicely put.

[note I do not condone the moron comment]

Muppet is far more MSE friendly.

Euphoria1z

ninky wrote: »

okay, so you are taking the last 40 years history as proof that house prices always rise? not a very wide period of time to select from. particularly as it correlates to mortgages becoming more readily available and income multiples increasing.

can you show me a period in history in which house prices have risen whilst mortgage lending has tightened?

just used the last 40 odd yrs, as wasnt sure how far past we have records of house prices.

shall we use the past hundred yrs then? is there any decade where house prices havent increased? (this is more for my curiosity rather than an argument)

sure in the 70s we had inflation, but theres always going to be a reason as to why it increased? theres a reason why it went up in the 70s. the 80's the 90's (over a 10 yrs period, i know most of the 90s it didnt, but im sure it did over 10yrs, i.e 89-99, or 91-2001, etc etc)

this maybe a first where it doesnt, but we will need to wait till 2017 (as the crash kinda started 2007)

chucky

Kohoutek wrote: »

If you look at the evidence, which I know many people are averse too, historically after recessions house prices have dipped considerably.

As you can see, in the early 80s recession, there's a dip of 20% from 75k to 60k. In the early 90s recession, there's a dip of 40% from 110k to just over 70k.

Of course, the HPI morons insist that 'this time is different', despite the fact that QE and ZIRP cannot go on forever.

nice graph but have a look at the latest version - it blows your theory completely out of the water. sorry.

Charterhouse

chucky wrote: »

nice graph but have a look at the latest version - it blows your theory completely out of the water. sorry.

I don't know, I might well be wrong, but I don't think that it is fair to say that a year in which 200bio was literally thrown at the economy and banks were urged to take almost any action possible to avoid repossessions does not necessarily mean that the downturn in house prices is over.

Again, I might be wrong, but I think it is a bit soon to be counting ones' chucks.

chucky

Charterhouse wrote: »

I don't know, I might well be wrong, but I don't think that it is fair to say that a year in which 200bio was literally thrown at the economy and banks were urged to take almost any action possible to avoid repossessions does not necessarily mean that the downturn in house prices is over.

Again, I might be wrong, but I think it is a bit soon to be counting ones' chucks.

i can't argue that as it was bound to have an impact. and it's not £200bn it's £200bn plus. it's not finished and may even solve the problems

but using a graph that is 3 years old paints a different picture to the one that is more recent and blows his theory that he dramatised a bit out of the water

ukcarper

Kohoutek wrote: »

If you look at the evidence, which I know many people are averse too, historically after recessions house prices have dipped considerably.

As you can see, in the early 80s recession, there's a dip of 20% from 75k to 60k. In the early 90s recession, there's a dip of 40% from 110k to just over 70k.

Of course, the HPI morons insist that 'this time is different', despite the fact that QE and ZIRP cannot go on forever.

I take it the blue line is inflation adjusted

Kohoutek

chucky wrote: »

nice graph but have a look at the latest version - it blows your theory completely out of the water. sorry.

It's only because we have artificial measures propping up the housing market at the moment - QE, ZIRP and the £300 billion loan to lenders to provide liquidity. They won't last forever.

ukcarper wrote: »

I take it the blue line is inflation adjusted

Yes

nembot wrote: »

Nicely put.

[note I do not condone the moron comment]

It just annoys me how irrationally obsessed with HPI so many people are. There are far more important measures of our economy, like unemployment and our trade deficit. The house price bubble has had a good ten years, people should get over it.

Really2

Kohoutek wrote: »

Yes

In most crashes how much as the nominal fall been in % and how much has been in real terms.

As far as I know we have had the biggest nominal drop in recent history. Could the rest of falls not be in real terms?

HAMISH_MCTAVISH

ninky wrote: »

the problem is not supply but affordability. affordability of housing has not been governed by income but by availability of credit which has been too easy and at too high levels.

If this was true, then you would not be able to buy a terraced house for 50K in parts of the North of England. When a terraced house of similar size and construction in London can cost 500K.

Credit was available equally everywhere.

Only supply and demand explains the differences between house prices in different parts of the UK.

brit1234

HAMISH_MCTAVISH wrote: »

If this was true, then you would not be able to buy a terraced house for 50K in parts of the North of England. When a terraced house of similar size and construction in London can cost 500K.

Credit was available equally everywhere.

Only supply and demand explains the differences between house prices in different parts of the UK.

Really Hamish lol

So even if there wasn't this credit relaxation then prices will be the same today?

No the trueth was the buble was formed by lax ever expanding credit, fraud and speculation. Credit levels puts the ceiling on prices and that is a fact, denying this is not logical.