Why are posters so Obsessed with House Prices?

chucky

LydiaJ wrote: »

Cost of living inflation can be affected by many things - to take just one example, consider fuel costs (directly, and indirectly by inflating the costs of transporting goods). But rising fuel costs don't inherently cause wage inflation.

If your salary is still the same but your weekly supermarket shop costs more, there's no reason why you'd be willing to spend more on a house.

Wage inflation is the only kind of inflation that stimulates HP inflation.

i'm not talking about getting HPI here - i'm talking about a potential FTB trying to get a deposit together and not being able to because of general inflationary pressure on their disposable income.

you can have wage inflation less than general inflation and still get HPI like in my post above. general inflation 6%, wage inflation 4% and HPI 2%, i don't see negative HPI in this scenario. what i'm saying is that you don't get negative HPI in this scenario.

Graham_Devon

Where would 4% wage inflation come from?

Lets talk about the fundementals. Could, say, the public sector look forward to 4% wage rises while they are being laid off?

chucky

Graham_Devon wrote: »

Where would 4% wage inflation come from?

no idea but you can't really be that stupid, or can you?

that's why i put it is an example not a prediction - can't you read?

something along the lines of this example - general inflation 6%, wage inflation 4% and HPI 2%, i don't see negative HPI in this scenario. that's just an example not a prediction.

Graham_Devon wrote: »

Where would 4% wage inflation come from?

Lets talk about the fundementals. Could, say, the public sector look forward to 4% wage rises while they are being laid off?

the UK workforce isn't made up exclusively of the public sector... didn't you know that?

Procrastinator333

chucky wrote: »

i'm not talking about getting HPI here - i'm talking about a potential FTB trying to get a deposit together and not being able to because of general inflationary pressure on their disposable income.

you can have wage inflation less than general inflation and still get HPI like in my post above. general inflation 6%, wage inflation 4% and HPI 2%, i don't see negative HPI in this scenario. what i'm saying is that you don't get negative HPI in this scenario.

I see the point about it becoming more difficult to genereate a large deposit if general inflation > wage inflation. That is of course true.

But if that kicks in as a real limitting factor to the FTB, I think it feeds back in to house prices because you end up with even less FTB's which in turn puts downward pressure on house prices.

chucky

Procrastinator333 wrote: »

I see the point about it becoming more difficult to genereate a large deposit if general inflation > wage inflation. That is of course true.

exactly - but the unpredictable thing is that small amount of wage inflation maybe enough to support house prices. any nominal increase is not good for any potential FTB.

Procrastinator333 wrote: »

But if that kicks in as a real limitting factor to the FTB, I think it feeds back in to house prices because you end up with even less FTB's which in turn puts downward pressure on house prices.

i see that happening in the longer term not in the near future especially if the above happens.

Graham_Devon

chucky wrote: »

no idea but you can't really be that stupid, or can you?

that's why i put it is an example not a prediction - can't you read?

Oh right. I am a little stupid, cus when you said:

chucky wrote: »

all your arguments are based on if this happens or if that happens never on any fundamentals.

I never would have thought you would have done the exactly what you were stating in the post directly after saying it.

Silly me

chucky

Graham_Devon wrote: »

Silly me

oh dear... but at least you can admit not knowing the difference between an example and a prediction...

Graham_Devon

chucky wrote: »

oh dear...

I agree, that was an absolutely awful response.

Exocet

chucky wrote: »

i don't see rates rising either - you've answered my question.

i see the possibility of inflation however, i see wage inflation and i can even see HPI.

i'm thinking something along the lines of this example - general inflation 6%, wage inflation 4% and HPI 2%, i don't see negative HPI in this scenario. that's just an example not a prediction.

so... for a FTB saving for a deposit it's not great, better than rampant HPI but not a great scenario compared to them hoping for prices to crash.

I love this wriggling. Poster creates a set of thoughts that outline their point of view and then immediately denies those thoughts and pass them off as an 'example'. Well lets have the other examples then? I mean it all seemed a bit specific.

No interest rate rises. Inflation 6%. Wage inflation 4%. HPI 2%.

Or were they just a set of meaningless numbers?

Procrastinator333

Exocet wrote: »

I love this wriggling. Poster creates a set of thoughts that outline their point of view and then immediately denies those thoughts and pass them off as an 'example'. Well lets have the other examples then? I mean it all seemed a bit specific.

No interest rate rises. Inflation 6%. Wage inflation 4%. HPI 2%.

Or were they just a set of meaningless numbers?

To be fair, I believe Chucky was just making the point that in such a scenario, it isn't all gravy for the FTB. That is not the same as making a prediction that the world will look like that in the future.