Deconstructing Moneyweek: Why British House Prices Won't Fall

lemonjelly

HAMISH_MCTAVISH wrote: »

Ahhh, so not a "substantive house price issue" then......

(gosh I miss the rolleyes smiley)

Sorry old bean, but you're rather proving Chucky's point......

So a personal attack against a poster doesn't merit an apology as it isn't important enough, as it doesn't relate to house prices eh?

Still can't bring yourself to do it can you.

Harry_Powell

the_flying_pig wrote: »

That's pretty much why it's generally much easier & fairer just to sling a bit of abuse in his direction rather than getting bogged down in silly detailed debates.

Why are you guys logged onto this 'DEBATE house prices and economy board' if you don't want to debate anything?

If Hamish is so wrong, then surely it'd be easy to pick him apart?

I almost had him in tears a few months back while discussing his personal finances, come on bears, rise to the challenge!!

HAMISH_MCTAVISH

Harry_Powell wrote: »

If Hamish is so wrong, then surely it'd be easy to pick him apart?

You're playing devils advocate quite well this week Harry....

Why don't you give it a go?

I'd actually like to hear a credible explanation for why the discrepancy in housing vacancy rates isn't the main reason for the difference in HPI performance amongst countries, given that most resorted to QE, low rates and stimulus.

doire_2

HAMISH_MCTAVISH wrote: »

Sorry doire, should I have done one of these.......

"But had they followed your advice, they'd have lost the best part of £20,000 as a result.* PLUS the money they wasted in rent in the meantime.**"


























* Except in Northern Ireland
**More like £100,000 in the nicer bits of London

So you are now suggesting everywhere except NI and London

Harry_Powell

HAMISH_MCTAVISH wrote: »

You're playing devils advocate quite well this week Harry....

Why don't you give it a go?

I'd actually like to hear a credible explanation for why the discrepancy in housing vacancy rates isn't the main reason for the difference in HPI performance amongst countries, given that most resorted to QE, low rates and stimulus.

I'm sure a bear will be along shortly to discuss and debate the intricate issues and problems of this discrepancy, providing us all with an insight into this weighty and complex issue.

Either that, or they'll call you names and throw their rattles at you. My money is on the latter.

Thrugelmir

HAMISH_MCTAVISH wrote: »

As you well know, the 3.5 times income average was established primarily during the three decades of the highest interest rates in the BoE's nearly 400 year history. Where actual mortgage rates were usually above 10%, and sometimes above 15%.

This period of high interest rates was a blip..... The long term average remains around 5%, but as both Morgan Stanley and the BoE themsleves have pointed out, the base rate in the future is likely to remain well below this level.


1. It's not just you..... No credible commentator sees rates increasing immediately, or increasing significantly in the next 3-5 years. Some (like your fellow bear Bootle) see rates below 1% for 5 years.

Income to loan ratios is actually in relation to risk on loan lending books. So is an acturial computation and has nothing to do with interest rates. Historically mortgage books of banks and building societies are maintained at a 3 to 3.5 times ratio across total lending.

The cost of wholesale (and retail money is rising). You may not have noticed that 3 month Libor has risen around .5% in the past 3 months.

As for the SLS. The factor you omit to consider is that it has to be repaid at some point. HBOS is the primary recipient and the easy solution for Llloyds is to contract its loan book. Which it is already doing, plus there will be capital receipts from downsizing the business with the sale of C&G (possibly) in line with the EU's request.

Sir_Humphrey

The use of the term "deconstruction" by Hamish is appropriate considering his reading of economic reports is worthy of Jacques Derrida himself.

BTW: That is not a compliment!

HAMISH_MCTAVISH

Harry_Powell wrote: »

Either that, or they'll call you names and throw their rattles at you. My money is on the latter.

Looks like you won this hand of "bear bingo"....;)

HAMISH_MCTAVISH

Thrugelmir wrote: »

The cost of wholesale (and retail money is rising). You may not have noticed that 3 month Libor has risen around .5% in the past 3 months.
.

The cost of wholesale money may be edging slightly upwards, but the cost of retail money continues to decline.

Witness today's announcement of a market leading 3.99% five year fix from the co-op.

As predicted, more competition is reducing lender margins....

Yakubu22

the_flying_pig wrote: »

Detailed point by point debate with Hamish is, well, pointless. No-one is prepared to invest as much time in it as he is. However repetetive and/or fallacious the points he's making might be, he'll always have the last word.

Hamish's posts are pretty much all based around a few pertinent facts repeated ad nauseum. These are: (1) low (and possibly persistently low) interest rates; (2) low rate of housebuilding; and (3) rising prices in Q2-Q4 2009.

But he doesn't think, or even try to think, like any kind of professional economist/analyst/financial person. He takes his facts and goes straight into Daily Express mode, predicting 'soaring' or even 'rocketing' inflation.

He doesn't ever seriously think about the relationship between average incomes and house prices, e.g. he might attempt to posit something along the lines of, 'maybe with a decent level of housebuilding a ratio of about 3.5 is the norm but with low housebuilding a higher, even a much higher, ratio of 5 or so may be sustainable' - rather, he prefers to [implicitly] assume that any ratio whatsoever [6? 7? 67?] is perfectly sustainable.

He doesn't ever seriously think about the relationship between interest rates and inflation (e.g. back in the days of the very high interest rates that he's fond of referring to, double digit wage inflation had often been absolutely the norm, quickly rendering historic debts more or less meaningless).

He doesn't ever seriously think about the relationship between employment and house prices. His observation above that house prices rose in the same year as unemployment rose [2009] is literally pathetic when the exact same argument could be applied to falling interest rates & falling priecs in 2008 [but reliance on such a snapshot would be so fatuous that I doubt anyone with half a brain would do so].

The truth is that there are very decent arguments on both sides but Hamish [day after day, month after month, repeatedly] extremely clumsily cherry-picks his favourites, backed up with a few very cynically chosen bits of casual empirics, and never makes any attempt to guesstimate what he thinks a sustainable price level is.

His arrogance and foolishness in thinking that he's given a Cambridge-educated economist, with 20 years' worth of financial experience, and who writes well, some kind of 'roasting' by recycling his provincial estate agent's mantra is the icing on the cake.

That's pretty much why it's generally much easier & fairer just to sling a bit of abuse in his direction rather than getting bogged down in silly detailed debates.

Beautiful!