In real money, British house prices are down by 70%

Asheron

As far as advocates of sound money are concerned, the UK housing market peaked in 2005.

Since then it has fallen by more than 70%.

Yes, 70%. House prices are now at levels last seen in the early 1990s, at the bottom of the last bear market.

The average house price is currently 25% below its average of the last 40 years.

"But, but, but," I hear you say. "The housing market has barely fallen. The latest Nationwide and Halifax data has been showing year-on-year price rises. The crash never really came. This is insane. You're talking rubbish."

Am I?

http://www.moneyweek.com/investments/property/uk-house-prices-in-ounces-of-gold-02110.aspx

new_home_owner_3

Asheron wrote: »

You're talking rubbish."

Am I?

i think you are;)

Cleaver

Asheron wrote: »

As far as advocates of sound money are concerned, the UK housing market peaked in 2005.

Since then it has fallen by more than 70%.

Yes, 70%. House prices are now at levels last seen in the early 1990s, at the bottom of the last bear market.

The average house price is currently 25% below its average of the last 40 years.

"But, but, but," I hear you say. "The housing market has barely fallen. The latest Nationwide and Halifax data has been showing year-on-year price rises. The crash never really came. This is insane. You're talking rubbish."

Am I?

http://www.moneyweek.com/investments/property/uk-house-prices-in-ounces-of-gold-02110.aspx

<sigh>

People don't measure how much houses are worth in gold though, do they? They measure how much they are worth in money. You know this, presumably, so what's the point of measuring it in gold?

As I've said before, is there anything else you'd like to measure house prices against? A certain share? Mars bars? Panini sticker albums from the 80s? Precious and rare wine? A vintage pair of shoes? The price of timber? I'm sure there's loads of stuff we can find to compare the price of a house to and declare them cheap or expensive. But, again, as people buy houses with money, surely money would be the best tool with which to measure their value?

Graham_Devon

LOL.

It's like a bear version of Hamish

"If you measure house prices in the cost of banana's, they have actually dropped, especially when you ignore the rises and then base the cost of bananas on zibabwe currencies".

phil_b_2

Oh dear oh dear oh dear...

Loopgames

I actually found it interesting - a different point of view to value property in REAL terms. I think that many of us are sceptical because we have forgotten the bigger picture and how gold has been the standard as true money throughout history especially when things become uncertain in the financial markets.

Oh and also history tends to repeat itself.

purch

Well if your house was worth £ 250,000 in May 2005 it was worth $ 475,000.

......by the middle of 2007 and it stayed at £ 250K it was worth $ 515,000, and now if it's still valued at £ 250,000 it's worth $ 360,000

So you've lost $ 155,000 in the last 3 years, and $ 115,000 over 5 years :eek:of course you made $ 40,000 between 2005 and 2007 so that should cheer you up a little :T

Personally I would recommend you value your house in Angolan Kwanza'a

in 2005 your £ 250K house was worth Kwanza 27,250,000........by 2010 your £ 250K house is worth Kwanza 33,375,000

That's a monster Kwanza 6,125,000 PURE PROFIT !!!!!! :T

CLAPTON

I'm sure it's a fair comparison for those of us who are paid in gold; for others it's not much good.

Cleaver

Loopgames wrote: »

I actually found it interesting - a different point of view to value property in REAL terms. I think that many of us are sceptical because we have forgotten the bigger picture and how gold has been the standard as true money throughout history especially when things become uncertain in the financial markets.

There is no 'bigger picture'. I guess it's vaguely interesting to compare one asset to another, but if you never own one of those assets then it's pointless, isn't it? I get paid in sterling, I buy stuff and pay bills in sterling and I buy and sell properties in sterling. Sterling is therefore my measure of how much a house is worth. I think it's fair to say 99.99% of the population would agree with me.

Loopgames

purch wrote: »

Well if your house was worth £ 250,000 in May 2005 it was worth $ 475,000.

......by the middle of 2007 and it stayed at £ 250K it was worth $ 515,000, and now if it's still valued at £ 250,000 it's worth $ 360,000

So you've lost $ 155,000 in the last 3 years, and $ 115,000 over 5 years :eek:of course you made $ 40,000 between 2005 and 2007 so that should cheer you up a little :T

You would have only benefited if you had liquidated your house and traded in the FOREX.

What the article is pointing to is if you can buy gold today at the value it is today it will increase and within a 3 year time period you should sell as soon as the value of 100 ounces of gold is equivalent to buying an average priced house.

Whether you have 100 ounces is irrelevant.

Here's the gamble for homeowners:

Sell your home today before the masses do and salvage as much of your capital as you can. Then put your capital into gold because it will rise in value and hopefully (!!!!) you will be able to buy a house outright with no mortgage.

That is unfortunately a very risky business for most.

But I do think it if you research the market and history you may decide it is more of a gamble staying in your home than selling it. But again that depends on how risky or risk averse we are.

Cleaver

Loopgames wrote: »

Here's the gamble for homeowners:

Sell your home today before the masses do and salvage as much of your capital as you can. Then put your capital into gold because it will rise in value and hopefully (!!!!) you will be able to buy a house outright with no mortgage.

That is unfortunately a very risky business for most.

But I do think it if you research the market and history you may decide it is more of a gamble staying in your home than selling it. But again that depends on how risky or risk averse we are.

Oh for goodness sake. Most people buy a house because they work nearby. And because they like their garden. And it's a good place to keep their stuff. And because their kids go to the local school. They don't own it because they think it will outclass gold as an asset.

So your 'gamble' doesn't depend on whether you are risk averse or not, it depends on whether families want to uproot their entire life to make a bet on gold. And none of them will want to do that.