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Debate House Prices
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Age of home ownership coming to an end...
Comments
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Jan 2009.HAMISH_MCTAVISH wrote: »
All that article proves, is that if you put enough effort in, anything can be made to sound plausible. Sure Hamish - prices might go up, they might go down. A host of factors from affordability, through supply and demand, and sentiment might come into play. Or they might not. Who knows?
To paraphrase? something. If it looks like a bubble, and sounds like a bubble - will it pop like a bubble?0 -
I thought my position was crystal clear? By emptying my mind of rises and falls I am achieving an inner calm, my chakra becoming as one with my krishna. No more for me the worry about Post Office savings rates, or the likelihood of 600,000 public sector cuts. I am trying to operate on a higher zone in order to reach nirvana before I need to draw my pension.Graham_Devon wrote: »Alright really. Let's leave it there eh?
If you yourself can't even tell me what you are talking about and describe your own words and thoughts when you describe a situation it's no wonder we often end up in these stupid to and fro posts.0 -
I thought my position was crystal clear? By emptying my mind of rises and falls I am achieving an inner calm, my chakra becoming as one with my krishna. No more for me the worry about Post Office savings rates, or the likelihood of 600,000 public sector cuts. I am trying to operate on a higher zone in order to reach nirvana before I need to draw my pension.
LOL, posted on the wrong thread.
You were quick!
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Yes, sorry, lol. Do you mind if I leave it, as it gave me the opportunity to spout a bit more mindless crap for my own amusement?Graham_Devon wrote: »LOL, posted on the wrong thread.
You were quick!0 -
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HAMISH_MCTAVISH wrote: »...the ultra-cheap decade of the 90's was an anomaly, likely never to be repeated in our lifetime...
you're over-egging it somewhat there, H.
look at the following chart. before you get excited about specific values appreciate that: (1) it uses different data sources for both earning and house prices; and (2) it was put together about 2 years ago and as such does not include 2009's 'Brown bounce'.
it shows a couple of things, namely that:
(a) booms and busts are nothing new; and
(b) the 90s lows were indeed low lows... but not crazily low [other than possibly 95-97]. certainly not in the same way that 2007 was a crazy high.
FACT.0 -
Well thanks for posting a graph that proves my point.
The 90's low income to price ratio was unparalelled, both in depth and duration.
Very much the anomaly.“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 -
HAMISH_MCTAVISH wrote: »Credit expansion, clearly.
Which enabled the effective fulfilment of underlying demand in some countries, and created credit fuelled bubbles in others.
But to determine which is which, we really need to look at the performance of the different housing markets once the credit tap was turned off.
The USA, Spain, UK, and Ireland all saw an expansion of credit.
They all saw the credit markets feeze up, and credit availability drop by up to 70% in a short time frame.
They all saw interest rates drop to near zero, and all had government stimulus and liquidity support.
Yet the performance of house prices was very different.....
Three of those markets crashed hard and have not made any significant recovery.
One of those markets crashed, but then recovered rapidly.
What could it possibly be, that would trigger such a different result?
I don't suppose this has anything to do with it......
Empty homes as a percentage of total housing stock.
Ireland 17%
Spain 16%
USA 11%
UK 3.2%
And I note still no response to this.....“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 -
HAMISH_MCTAVISH wrote: »Credit expansion, clearly.
Which enabled the effective fulfilment of underlying demand in some countries, and created credit fuelled bubbles in others.
But to determine which is which, we really need to look at the performance of the different housing markets once the credit tap was turned off.
The USA, Spain, UK, and Ireland all saw an expansion of credit.
They all saw the credit markets feeze up, and credit availability drop by up to 70% in a short time frame.
They all saw interest rates drop to near zero, and all had government stimulus and liquidity support.
Yet the performance of house prices was very different.....
Three of those markets crashed hard and have not made any significant recovery.
One of those markets crashed, but then recovered rapidly.
What could it possibly be, that would trigger such a different result?
I don't suppose this has anything to do with it......
Empty homes as a percentage of total housing stock.
Ireland 17%
Spain 16%
USA 11%
UK 3.2%
I believe that Ireland has a higher house price to income ratio than the UK despite this very large discrepancy in this supposedly important 'empty homes' measure
this is supported by the following chart [select price to income ratio, Ireland & UK, longest timeframe possible]
http://www.economist.com/node/14438245?story_id=14438245
why? the supposed 'supply side' that you focus on obsessively is nowhere near as important as you like to pretend.
the early noughties pwoperdee boom and bust, which is a very long way from being over as I'm sure you yourself suspect, was about three things, namely the supply of credit, the supply of credit, and the supply of credit. everything else is noise, insignificant specks against the 10-tonne elephant in the room.FACT.0 -
the_flying_pig wrote: »I believe that Ireland has a higher house price to income ratio than the UK despite this very large discrepancy in this supposedly important 'empty homes' measure
this is supported by the following chart [select price to income ratio, Ireland & UK, longest timeframe possible]
It's not supported by the chart, as the chart does not cover the time range of the recovery. It ends in mid 2009 for the price to income series comparing ireland to the uk.
I note that the price series, which does stretch to Q2 2010 for both countires, proves my point very well indeed though.why? the supposed 'supply side' that you focus on obsessively is nowhere near as important as you like to pretend.
the early noughties pwoperdee boom and bust, which is a very long way from being over as I'm sure you yourself suspect, was about three things, namely the supply of credit, the supply of credit, and the supply of credit. everything else is noise, insignificant specks against the 10-tonne elephant in the room.
And the supposed credit bubble, that you focus on so obsessively, does not explain why Spain, the USA and Ireland's house prices fell by 30% to 40% and are now either flat or still falling, whereas the UK's house prices recovered strongly.
Yet "the supply of credit, the supply of credit, the supply of credit", fell by around 70% in all those countries.
Those "insignificant specks" of supply are the only difference between the countries.
Your theory has already been proven wrong, yet you repeatedly fail to accept it.
If credit expansion was the SOLE determining factor in house prices, then UK price falls would be at a similar level to that of the USA, Ireland or Spain. All of those countries have engaged in similar levels of monetary and fiscal stimulus, yet prices in the UK have behaved very differently.
So, your assertion seems to be that credit expansion ALWAYS creates an unsustainable bubble, and that ALL price spikes are bubbles regardless of underlying fundamentals.
Whereas my assertion is that Credit Expansion enabled the effective fulfilment of underlying demand in some countries, and created credit fuelled bubbles in others. But to determine which is which, we really need to look at the performance of the different housing markets once the credit tap was turned off.
And nothing in your posts so far explains why those differences in performance happen, AFTER the credit taps are turned off.
Whereas this does.....
Empty homes as a percentage of total housing stock.
Ireland 17%
Spain 16%
USA 11%
UK 3.2%“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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