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If prices don`t fall to 3x income, it will be the first time in history.
Llubrevlis
Posts: 272 Forumite
As an example, he cited the British housing market bubble of 1989. At the time, he said people dismissed the bubble because there was no more rezoning, creating a land shortage and as such, they believed prices would rise forever.
"Seven years later, in 1997, they hit the lowest multiple of family income since the record books started in 1945. It's always the same old argument, they are not making any more land."
Mr Grantham described the housing market as a "time bomb" just waiting for interest rates to increase and become impossible to support.
If the housing market did not return to the normal multiple of family income, he said "it will be the first time in history."
http://www.theaustralian.com.au/business/housing-market-a-time-bomb-says-investment-legend/story-e6frg8zx-1225880119320
"Seven years later, in 1997, they hit the lowest multiple of family income since the record books started in 1945. It's always the same old argument, they are not making any more land."
Mr Grantham described the housing market as a "time bomb" just waiting for interest rates to increase and become impossible to support.
If the housing market did not return to the normal multiple of family income, he said "it will be the first time in history."
http://www.theaustralian.com.au/business/housing-market-a-time-bomb-says-investment-legend/story-e6frg8zx-1225880119320
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or alternatively the first time since 1945 which is slightly less dramatic.0
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Talking about the first time in history just check the base rate on this chart, interesting times indeed.
http://news.bbc.co.uk/1/hi/business/7832714.stm'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
why did you bother starting another thread on the very same topic and article that you had previously contributed too here...Llubrevlis wrote: »As an example
https://forums.moneysavingexpert.com/discussion/25750870 -
Hey Mike you have done well to still be around after 68 posts :beer: respect.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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Chaos_A.D. wrote: »As much as I'd like say they can't hit 3x income. If house prices hit anywhere near 3x average single income (i.e £75k), the economy would be all but dead, banks would be bust, companies would be unable to pay salaries, cash machines empty, it would be close to anarchy, so careful what you wish for.
Indeed, however I wouldn't like to stretch myself on a large mortgage over 25 years betting that they will stay that way over that time span.
Just making a point about how we live in interesting times.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Llubrevlis wrote: ».
If the housing market did not return to the normal multiple of family income, he said "it will be the first time in history."
http://www.theaustralian.com.au/business/housing-market-a-time-bomb-says-investment-legend/story-e6frg8zx-1225880119320
Just a thought the amount of women working as also increased since the 1940's I would guess it has increased every decade since then as a percentage.
Would it not require as many women to be out of work as in previous crashes also? (so when economy's tank household income is greatly affected eg. 1 person losing their job = no money to pay the mortgage)
The problem with historical data to judge the future, it does not take in to account social change.0 -
Hey Mike you have done well to still be around after 68 posts :beer: respect.
Hi Mike!
user reported for continual spamming on mse
Bye Mike!
"I can hear you whisperin', children, so I know you're down there. I can feel myself gettin' awful mad. I'm out of patience, children. I'm coming to find you now." - Harry Powell, Night of the Hunter, 1955.0 -
It's always the same old argument, they are not making any more land
I find it somehow comforting that bubble apologists are trotting out the same argument throughout the decades [and probably centuries]...FACT.0 -
the_flying_pig wrote: »I find it somehow comforting that bubble apologists are trotting out the same argument throughout the decades [and probably centuries]...
Yes it was the same argument in Japan "its a small island there isnt any more land"
But that didnt stop house prices crashing 80%!0 -
Llubrevlis wrote: »If the housing market did not return to the normal multiple of family income, he said "it will be the first time in history."
http://www.theaustralian.com.au/business/housing-market-a-time-bomb-says-investment-legend/story-e6frg8zx-1225880119320
You seem to have missed a wordIf the Australian housing market did not return to the normal multiple of family income, he said "it will be the first time in history."
Incidently the writer of the article also referred to 3.5 x family income and not 3 x income as you refer in your subject title."The price of housing typically trades about 3.5 times of family income and in bubble it goes to 6 or . . . 7.5 (times).
Why do people twist and make things up when it is so easily shown to be incorrect?:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0
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