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Debate House Prices
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House Prices Heading up not down
Comments
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HAMISH_MCTAVISH wrote: »Who cares?
Adjusting price indices for inflation against a basket of bananas, TV's and chocolate bars is irrelevant to the actual price you pay.
You don't pay for houses in bananas, (well, except for Macaque) so measuring house prices in them is pointless.
All a real terms drop means is houses got more expensive, AND so did everything else.
Unless wages increase in line with inflation, and that looks unlikely, potential buyers are worse off even with real terms falls. Whereas existing owners benefit with even small wage rises as the price they paid is locked in.
Investors? In your world where in the future only 30% will own do you think investors will be interested in property if there is no real term growth? Do you think those using their property as a pension pot will continue to do so if there is no real term inflation?
Speculation is what has keep the market going since the beginning of 2009. If people start to believe there will be no real growth i house prices then likely nominal prices will fall also.0 -
where will the 70% that don't own live?
Few people buying in todays market for BTL make any worthwhile money from yields these days. many just cover their rent. Most are relying on Capital Gains and this will not change in the near future. Hamishes talk of 2 couples etc living in a 2 bed flat is a nonsense.
Once IR rise again to normal levels leaving money in a high interest saving account will generate the same yields as BTL0 -
i didn't ask if BTL was worthwhile or not at the moment. i asked where these 70% of people are going to live with your 30% owner occupier scenario...Few people buying in todays market for BTL make any worthwhile money from yields these days. many just cover their rent. Most are relying on Capital Gains and this will not change in the near future. Hamishes talk of 2 couples etc living in a 2 bed flat is a nonsense.
Once IR rise again to normal levels leaving money in a high interest saving account will generate the same yields as BTL
do you think there could be just a slight off chance of demand for rental property increasing if there was 70% of people renting?
that even not considering the increasing population...0 -
i didn't ask if BTL was worthwhile or not at the moment. i asked where these 70% of people are going to live with your 30% owner occupier scenario...
do you think there could be just a slight off chance of demand for rental property increasing if there was 70% of people renting especially with an increasing population?
Only so much people can pay for rent. Does not matter whether there are 5 people for every one property. There is only so much of the their monthly wage they can afford to pay for rent.
We are pretty much up to the limit now so only wage inflation growth likely from now on. Also the more rental properties out the less rent will be.
Dont worry once housing actually becomes a problem the relevant government of the day will build the necessary houses.0 -
It is told slightly differently in the telegraph:
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/7920146/Housing-market-to-stay-flat-until-2013.html
Their 6.7% prediction for this year seems rather optimistic.
On the Nationwide, that would require the index which has shown 2% growth from Jan-July to show 3.7% growth in the last 5 months of the year,
On the Halifax, that is currently -0.9% for the first 6 months of the year and would require growth of 7.6% for the last 6 months of data.
Does anyone really think that is going to happen?0 -
http://www.dailymail.co.uk/news/article-1299358/House-prices-heading-say-experts.html
Basically, shortage of homes + low interest rates = no crash.
:beer:
No, we have a shortage of affordable homes + low interest rates.
We also have a shortage of people able to afford extorionate house prices, a shortage of FTB's, a shortage of jobs, a shortage of mortgage products.
The whole market is being kept afloat artificially because the government knows that once interest rates rise, a lot of people will no longer be able to afford their mortgage and could cause the banks to be bailed out again. They don't really have a choice but to maintain the bubble for now...0 -
Hamishes talk of 2 couples etc living in a 2 bed flat is a nonsense.
As long as population continues to rise faster than new houses are built, the only possible result is more people per house.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
http://www.dailymail.co.uk/news/article-1299358/House-prices-heading-say-experts.html
Basically, shortage of homes + low interest rates = no crash.
:beer:
We've had the crash.
Does this mean they will try and cool the price increases by upping the interest rates?
:A0 -
Procrastinator333 wrote: »On the Nationwide, that would require the index which has shown 2% growth from Jan-July to show 3.7% growth in the last 5 months of the year
No, what they've predicted is that the Q4 2010 average will be 6.7% higher than the Q4 2009 average.
And that looks entirely plausible.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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