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Debate House Prices
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It can make a lot of sense to buy now.
Comments
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it's always a good time to buy - it's just that some opportunities are better than others.
it's not always a good time to sell though... selling at the right price and the right time is the tough part.
I would have to agree in part.
If your requirements are non standard, when something you want comes. You should buy.0 -
I was pondering some applications I'm currently dealing with. At the same time I was thinking back to people I know who bought in past recessions, particulary in 1973, 1978 and 1991.
Current case - apllicants have sold thier home for £500k, having paid £140k in sept 1999.
It's a semi in Surrey.
They are buying a detached wreck for £615k on a huge plot.
He will do it up himslef in evenings (did this with last home) and it could easily be worth £1m in todays market, let alone 5 or 15 years time.
The new mortgage is £300k on C&I basis, fixed for 3 years at £1390 pm which for them is about 1 third of net income.
Sure rates may rise after 3 years (a certainty) but they will cope and will be sitting on a mass of equity. He really does transform a property.
Back to 1973. I have an applicant aged 68 who bought a big pile bear Jamie Oliver for £2,500! It's now worth £700,000.
Imagine you were on this forum and we were in the same economic times as 1973 - all the bears would say it was reckless to buy!
1978 - a current client bought a huge detached home with 20 acres back then for £60,000. It's now valued at about £3m.
Again if we were experiencing the economic tapestry of 1978, the bears here would be urging restraint.
THE POINT - It's always difficult to see the light when times are dark, but the brave / carefree will be investing now and sitting pretty in 20 years time.
Your thread title [something about buying now] and your post [in effect something about why it wouldn't make sense to wait 15-20 years] don't quite match up.
Buying now [at anything other than a knockdown price] would be highly questionable because the short-term outlook is dire.
The numbers you chuck around in your thread are meaningless, on a par with "if someone had given Jesus a one-pound note as a christening present and he'd invested it in a mediocre savings account earning an interest rate of 2.0%, his nest egg would now be worth two hundred thousand trillion quid". true but not terribly useful as investment advice.FACT.0 -
you didn't do very well at reading or understanding my post - did you?do you really believe that? i wonder how some people get through life with such limited understanding. I could have bought 3 years ago. I didn't. The exact same house is now £40,000 cheaper while I've increased my deposit by £40,000. Tell me why 3 years ago was a good time to buy for me?
if your story is correct and even true you're better off taking the opportunity now than 3 years ago for others it was a better opportunity 3 years ago. why is that so complicated to understand...it's always a good time to buy - it's just that some opportunities are better than others.0 -
Conrad - you are right. where I work (land developers), recessions are considered good as we pick ups bargins and make a killing in the good times. Its the same for the people you mentioned - they understood the risks, did something about it, and profited massively. good for them.0
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to be pedantic and taking it further than the ticket price of property - compare buying now on a 3.99% 5 year fix to buying in 5 years time on 6%.the_flying_pig wrote: »Your thread title [something about buying now] and your post [in effect something about why it wouldn't make sense to wait 15-20 years] don't quite match up.
Buying now [at anything other than a knockdown price] would be highly questionable because the short-term outlook is dire.
buying now saves you 2% on interest repayments which becomes 10% saving over that 5 year period plus any capital repayments - so about 14% total saving i think.
if you expect prices to drop more than 10% and rates not to go up - now is not the time to buy.
if you expect prices to drop and rates to go up - you have a tough decision to make.
if you expect prices to stay the same and rates to go up - now is the time to buy.
i've generalised a bit but i hope you udnerstand what i'm trying to say.0 -
I bought a pack of polos when i was a kid for 11p. Now look at the price!!! I should stock up on them as in 10 years they'll be sold for at least a quid! that's a 1000% increase in 30 years!! You might think this is a joke statement, but it applies almost directly to what Conrad is stating. Remove inflation from the scenario and things don't look as pretty.
Have the bulk of pensions or other package investments grown from £2500 in 1973 to £700,000 today without any further capital contributions?0 -
MissMoneypenny wrote: »State worker job cuts; benefit cuts; rising interest rates. I can't see house prices going up. Better to wait and buy a house at the lower prices so people don't have to borrow so much.
And what was is it like in 1973 and 1978? Opec crisis, 3 day weeks, strikes, rubbish on streets (1979), Japan and Taiwan stealing our manufacturing en mass, unionised Britain, basket case Britain, the sick man of Europe, high unemployment and power cuts.
You would have taken a chance and bought in 1973 or 78 with that backdrop?0 -
the_flying_pig wrote: »
Buying now [at anything other than a knockdown price] would be highly questionable because the short-term outlook is dire.
And the same was true in 73, 78, 80, 91 etc0 -
THE POINT - It's always difficult to see the light when times are dark, but the brave / carefree will be investing now and sitting pretty in 20 years time.
I saw the light when it came to purchase and massively overpaying to reduce the LTV on my properties.
the amount of interest and the reduction in amortization time is fantastic.
Certainly it brightened up my future
:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
...if you expect prices to drop more than 10% and rates not to go up - now is not the time to buy.
if you expect prices to drop and rates to go up - you have a tough decision to make.
if you expect prices to stay the same and rates to go up - now is the time to buy...
yeah, that's the right way to think, one also needs to take into account stuff like how much one expects prices to fall by [a little or a lot] and how cheaply or expensively one is able to live whilst waiting to buy...FACT.0
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