House Prices 27% Overvalued!

doire_2

chucknorris wrote: »

He'll not be buying one soon then, when they do crash again in about 17 years time they will still be more than they are today, but think of all the rent paid in the meantime.

Can you provide proof why they wont crash again soon? You must be 100% positive with the statement you made above.

doire_2

chucknorris wrote: »

Goal!!!!!!!!!!!!!!!!!

Chucky 1 Bears 0

I wonder if there are any bears on here that were able to buy after the last crash but didn't and saying the same old thing again about crashes continuing etc?

Im a bear. Didnt buy after the "last" crash because in my area they are still falling according to Nationwide the other day

(cue the usual suspects saying they dont give a f**k about my area....*yawn*)

angrypirate

silvercar wrote: »

If people were only given mortgages on the basis that they could afford on current salaries to pay a long term interest rate of 12.5%. Very very few people would get mortgages.

12.5% is 48 quarter point rises in base rate, or if you were talking about pay rate about 30 quarter point rises. Add to that you were basing affordability on current earnings, whereas high interest rates would be inflationary and wage inflation would also occur. Even if the unlikely happened and rates hit 12.5%, I doubt they would stay that way for long.

If everyone didn't take a mortgage because they may be a point in the next 25 years when it would be difficult to pay the bills if they had no savings, no-one would borrow.

My point was the Blacklight said if rates were to raise to 12.5% it wouldnt be the end of the world as at 12.5% the mortgage could still be paid. I was merely demonstrating his numberrs were [EMAIL="!!!!"]!!!![/EMAIL] and the monthyl payments couldnt be made.

I believe that when people take out a mortgage they should consider what would happen if / when rates rise. It irresponsible not too. Maybe 12.5% is a little excessive, but they have been that high before and they may go that high again one day in the future. I bet 5 yeras ago people wouldnt have believed 0.5% intererst rates were possible but we are here now!

chucky

torontoboy45 wrote: »

interesting graphs chucky.

a shame the economist didn't think to use them (or something similar) at the beginning of the yr, when it called the market 29% overvalued......

the 'economist' was right, that's if your just looking at one factor like they were. taking in to account inflation is another matter - it's not so clear.

taking both graphs and saying/thinking that house prices are overvalued means that inflation has also undershot by 28% in that time. Will inflation now increase by 28%?

people can't have it both ways.

chucky

doire wrote: »

Im a bear. Didnt buy after the "last" crash because in my area they are still falling according to Nationwide the other day

so if you're only interested in your own area why do you worry so much about national averages then...

it's always good to be able to switch tactic or dataset if it's not going your way isn't it doire :eek:

phil_b_2

abaxas wrote: »

Simple fact remains that cost of housing > cost of building + land.

So does this make them over priced?

Shouldnt there be any extra premium to cover the time/effort/risk of turning land + materials into a fully built house?

Besides, your point suggests that an alternative option for the more cash-strapped is to buy some land and build a house themselves? Why not try that?

IveSeenTheLight

abaxas wrote: »

I hate all this affordability claptrap.

Simple face remains that cost of housing > cost of building + land.

We could sort this all out, but we choose to limit supply via the natural monopoly of 'planning'.

Therefore the answer to properties being affordable to more, is to increase the supply of properties.

Complaining that houses are unnafordable while others around can still afford will not resolve the problem.

The market sets the prices, mass over supply and the prices would drop.
Undersupply and the prices will increase.
It's a very simplistic overview and of course there are many factors which will affect the supply and demand, but that essentially is the root cause.

doire_2

chucky wrote: »

so if you're only interested in your own area why do you worry so much about national averages then...

it's always good to be able to switch tactic or dataset if it's not going your way isn't it doire :eek:

I dont need Nationwide to tell me that houses in my area are falling. I just open my eyes....then close them again to think of all the money im saving

FTBFun

vaporate wrote: »

I would love to hear your explanation how my generation can get money together without parental help

I'm an FTB buying in London with no parental help.

The trick is to just be sensible about the whole process: don't buy somewhere you can't afford, keep your spending at an acceptable
level, and try and save every month.

:money:

chucky

doire wrote: »

I dont need Nationwide to tell me that houses in my area are falling. I just open my eyes....then close them again to think of all the money im saving

and then the purchasing power of your deposit falling...