Advice wanted - house prices to go up or down???

rosa_luxembourg

It's all so confusing. I'm in Scotland, where the press is always saying 'house prices only ever go up!'. But I saw a report on the news yesterday saying that prices in Aberdeen had "plunged".

What's going on? I might be looking to buy sometime soon. That would be a mad thing to do if prices continue to 'plunge' in Scotland.

Would I be better to wait out the coming crash? Or is it true that 'house prices only ever go up'? As far as I can see, they haven't gone up in the last two years, they've gone down.

I'm confused.

poppysarah

Down. Seriously down.

For 10 years or so... maybe forever. Depends if we get the oil/renewables right.

NEH

All i can say is we are selling in Aberdeen and our property is on the market for more than the flats in our area went for in 2008....There is 4 of them on the market at the moment so none of us is geting much interest plus being a flat it's a limited market. Out of the 4, one is slightly cheaper, one is more expensive and tow of us are in the range of those values...

We left Aberdeen as the housing prices were still exceptionally high even in August 09....

There was a bit of a slump last year but come the summer the areas that were worth living in started to pick up again.

Just wanted to give you a practical example....

There is a good 40 years left of the oil industry despite gloom and doom reports and prices will remin high in the area and even then when the oil has run out, Aberdeen is a centre of expertise and a lot of companies will still have business there...

Nosht

Out on a limb here but I think that there will be a massive fall in property prices, stock market &c after the election as, after all, someone has to pay for the bailout & government does not have any money, it's ours.

N.

Jowo_2

I always quote the satirical Private Eye take on property prices

"Today, it was reported that property prices are falling/staying stable, increasing."

ILW

If the Scot Nats get any true power, the whole country will fall apart without being subsidised by the English.

lucylucky

House prices will go up - and down.

It is all a gamble.

Depends whether you want to buy somewhere to live, and can afford it, or are looking to invest.

HAMISH_MCTAVISH

"Rosa Luxembourg" is a troll from the debate house prices board, trying to be funny over here.

GDB2222

Seriously for a moment ---- there are two conflicting theories, and nobody knows which is correct. I have my views but I won't inflict them on you.

Theory 1: Property prices depend on affordability. With low interest rates, mortgage interest is low, so people can afford to take out larger mortgages and do so. The snag with this theory is that interest rates may not stay low forever, and for prices to rise larger and larger loans need to be available.

Theory 2: Property prices are very high now as a multiple of earnings (about 4.7 times average male full-time earnings according to the Halifax) compared to a long-run average of around 3.5 time. So, if prices reverted to the long-run average overnight, there would be a 25% fall. The snag with this theory is that there is no particular reason why a 3.5 times multiple is correct. There have also been changes in lifestyles (people starting families later for example) which mean that basing the multiple on male earnings may be out of date.

franklee

Surely the key to this is inflation. We were told there would be deflation so base rates were cut to 0.5% very quickly. They stay at this level even though the CPI is now high, it's meant to aim for 2%. I remember the first time it went over 3%, that was novel and base rates were nearer 5%. Here we are with CPI at 3.4% and base rate at 0.5%!!! Meanwhile the pound is been trashed meaning our imports get more expensive.

We all know what happens to house prices when interest rates rise.

As for affordability a mortgage is taken out for typically 25 years so choosing the amount to borrow based on short term historically low interest rates is complete and utter madness.

GDB2222

You do of course believe that the BOE MPC is completely independent, don't you?