First-time Buyer fear - Will house prices crash??

WesternExpress

It also shows that someone buying in 1995 have made much more "profit" than someone in 1989 who took a decade to for prices to increase to more than when they bought.

Whilst it is fairly certain over the timeperiod of 25 years house prices will increase, there are large flucuations and anyone who buys at a high point will need a large amount of spare money to be able to pass over the low points.

dougk_2

My point is you can read into or use statistics and charts to prove or disprove anything and there is always an alternitive answer.
Lets all just wait and see what happens my bet is no crash for certain in the next 2 years (minor variations maybe of up to say 3-5% downwards in some area perhaps but hardly a crash,, but after prices have risen further this/next year).

observer_2

Bless the HPC bulls for crashing the post. I too am prepared for the 'new world order' and have lots of beans in the cellar. They sit next to my gold.

RHemmings

dougk wrote:

My point is you can read into or use statistics and charts to prove or disprove anything and there is always an alternitive answer.
Lets all just wait and see what happens my bet is no crash for certain in the next 2 years (minor variations maybe of up to say 3-5% downwards in some area perhaps but hardly a crash,, but after prices have risen further this/next year).

You can't prove anything with statistics. And frequently properly used statistics suggest only one outcome. Let's see you use statistics to prove that thumbs are longer than legs. The frequently used "you can prove or disprove anything with statistics" statement looks dangerously like a cop-out approach by people who either wish to deny a likely outcome they don't like, or whom can't be arsed to examine the evidence properly, and hence wish to deny that examining the evidence properly would add to our knowledge.

dougk_2

So how comes all these various statistics on house prices never all tie up then? Because spin can be put on any angle or "selective" ressults can be used.

"There are lies, damned lies and statistics." - Mark Twain

sums it all up really

Viz_2

SunnySusie wrote:

I wouldnt worry, protect yourself with a large deposit, if prices do crash then it just makes the next step up the ladder easier for you - thats not so bad is it?! I bought a house as a home, not as an investment. Of course there is some cross over between the two concepts, but the former means more to me. Also ensure you buy somewhere that you actually like, so that if you get stuck there, it wont be a problem.

Have a look at this first time buying guide story, written by a friend of mine.

Best of luck to you desperadoV2

Well said ! :beer:

We have done exactly that.

richgirl

WesternExpress wrote:

It also shows that someone buying in 1995 have made much more "profit" than someone in 1989 who took a decade to for prices to increase to more than when they bought.

Whilst it is fairly certain over the timeperiod of 25 years house prices will increase, there are large flucuations and anyone who buys at a high point will need a large amount of spare money to be able to pass over the low points.

Lets hope we don't go through a period of global deflation, i.e. like what Japan has suffered where prices are still less than where they were in 1989 !

The risks are many and growing, once the decline starts, if it results in deflation, then wages will also start spiralling lower as will the price of goods being sold in the stores from hamburger upwards. The key culprit to this global deflation are India / CHina and the rise in price of crude oil which is the trigger for deflation.

movieman

Lets hope we don't go through a period of global deflation, i.e. like what Japan has suffered where prices are still less than where they were in 1989 !

One way or another in the next twenty-five years, British, Chinese and Indian wages have to come into line, based on relative productivity. Quite what the result will be, I'm not sure, but either it will be a major rise in standard of living in China and India, or a major drop in the UK (or both, if they meet in the middle).

If British wages stay the same and foreign wages rise, then commodity prices will explode and we'll have far less money to waste on housing once we've paid for petrol and other essential items. If British wages drop to foreign levels, well, we're obviously screwed.

Either way, I don't expect the next 25 years to bear much comparison to the last 25. That's why I've eliminated all my debts, rent a cheap place in a nice area and have my savings in multiple currencies... the idea of putting all my savings into a house in the UK, and taking on huge debts on top to cover the difference between what I have saved and what people expect to sell their house for would seem scary, to say the least.

natwill_3

Bil2 wrote:

I think that some of you doom-mongers are missing the point of WHY people buy houses to live in.

People buy houses so that after 25 years of paying a mortgage, they will own the house outright (hopefully before they retire!). For those of you in rented acommodation sitting around waiting for a crash- whether the value of my home falls or not (presuming I can meet the repayments if the interest rate soars)! at least I will not have to make anymore payments on my home once I'm retired.

To me, this is the major reason why most people buy a home to live in.

Thank you...I totally agree

observer_2

movieman wrote:

Either way, I don't expect the next 25 years to bear much comparison to the last 25. That's why I've eliminated all my debts, rent a cheap place in a nice area and have my savings in multiple currencies...

Would you like some cans of beans for the cellar? i have a few going spare and if you buy enough i'll chuck in some tamiflu as well.