If prices don`t fall to 3x income, it will be the first time in history.

BLT_2

SingleSue wrote: »

My gut feeling is that the big drops will/have already finished and that what we will see for the next few years is very small increases/very small decreases, whilst we bump along at the bottom.

Then they will start going up but not on a spectacular basis initially and then gradually gather speed as more confidence returns.

Nothing to base it on apart from what happened in the 90's and good old gut feeling, so could be completely and utterly wrong! Of course, this could all depend on area...as with everything, some areas will always out perform others and others will always do more poorly than others/take longer to start to rise.

I'm not an expert here I hasten to add, but does anyone actually see house prices going up and up, gathering speed, even after the next few years that the OP mentions.

If so is the country not making a rod for its own back, many of the disastrous economic occurrences have resulted from over inflated house prices.

The situation is starting to creep slowly back to normality, to start the cycle of excessive increases, followed by slow reductions would seem to make no financial sense whatsoever.

I take what is said in the news with a pinch of salt. Building societies who release the information clearly have their own axe to grind and will manipulate figures to suit their agendas. Estate agents valuations are of a similar ilk. And how many times have we read in the papers one day about huge repossessions, negative equity and downward spiralling prices, only to read in another paper the next day that house prices have risen by 1%

Its all gobbledygook, it's driven by supply and demand and demand is low due to the banking debacle and the difficulty in obtaining mortgages.

Average house prices are just a joke, along with average wages. If I live in a street of 6 individuals who earn a 200k a year, and I earn 10k a year, the average wage down my street is 172k a year.

ctrlaltdelete

Hamish is going to be proved right gold and silver are about to crash.

Generali

HAMISH_MCTAVISH wrote: »

a relatively obscure publication, 'The Australian'.....

It's probably the best newspaper over here, not that it faces any strong competition.

Llubrevlis

ctrlaltdelete wrote: »

Hamish is right about gold and silver going crash soon 100% guaranteed he was just a little early.

He has been saying gold and silver were going to crash soon 100% guaranteed for a long time.

Gold has doubled since then and silver is 3x what it was when he said it was going to crash.

I hope you are better at you job Hamish than your understanding of financial markets.

AD9898_2

House prices can not go up significantly from here unless approvals fall more or wage inflation comes into play. Without these two scenarios we have reached a limit, dual income families, 0.5% base rate and still hundreds of thousands struggle.

There is nowhere for prices to go unless maybe 'inter-generational' mortgages come about where, god forbid, mortgage debt is passed down through the family (50+ year mortgages)

IveSeenTheLight

AD9898 wrote: »

There is nowhere for prices to go unless maybe 'inter-generational' mortgages come about where, god forbid, mortgage debt is passed down through the family (50+ year mortgages)

If that were to happen then it would slide the indicator more towards renting being favourable
or
you cold consider that buy buying, although the assett and debt would be passed down, it could negate inheritance tax and provide an opportunity for the children to have a better start, even if it was simply to sell and take the profits from the mortgage being paid down over that time.

Over course this is not ideal and it would be preferably for more to own in their own right within their own timeframe.
Is it not an indicator that more supply needs to be met to curtail the demand and HPI?

aqueoushumour01

i think that comparing house prices relative to a long term historical trend is dangerous. Things can shift over time and the 'right level' now may be higher than than over the period 1945-1960, say. The financial landscape changes over time, demand may shift with relatively small changes in supply... and it is quite feasible for the 'natural' level to be higher than 3 or 3.5 now. No doubt that things got a bit silly with banks betting on constant house price increases and they needed a correction but I don't think the correction will be back down to 3 and lower. But who knows? As a relatively young person though, I really hope house price growth like that pre 1997 never happens again as it will be so much more expensive to trade up. Ultimately, rising house prices only really benefits those who are downsizing or with a property investment portfolio. For most, this will not be the case and rising house prices just is not in our best interests. Personally, I'd be overjoyed if house prices stayed constant from now on - i retain my deposit in my house, save up some more money in a few years and can trade up to the next house as my family expands. With the long term supply and dynamics of this country, though, I cannot see this happening.

Graham_Devon

IveSeenTheLight wrote: »

If that were to happen then it would slide the indicator more towards renting being favourable
or
you cold consider that buy buying, although the assett and debt would be passed down, it could negate inheritance tax and provide an opportunity for the children to have a better start, even if it was simply to sell and take the profits from the mortgage being paid down over that time.

Over course this is not ideal and it would be preferably for more to own in their own right within their own timeframe.
Is it not an indicator that more supply needs to be met to curtail the demand and HPI?

No matter which way you look at it, debt passed onto the kids would be a !!!!!! situation.

sabretoothtigger

Its pretty much a universal truth that its only worth what people are prepared to pay for it.
That would seem strongly related to average wages but rather then a house price crash I'd expect average wages to rise and vs gold silver or copper even, all of them to drop

Australia is different to us, their rates are about 5% higher for starters. Since that article was printed, their prediction on higher rates was confirmed I think plus they'd already raised six times, meanwhile uk didnt anything and havent done anything in years