House prices, according to Mum and Dad

roswell

sanfrancisco wrote:

Yes that is true most young families I know don't pay for council tax and utilities.

:-) well most might not pay council tax :-)

I have seen many personal wind turbines / hydo electric schemes that everyone in my street is using for electric and as for gas well we just drill for that ...

The fact is buying a house isnt only about getting a mortgage .. its the cost of running / keeping that house that is also increasing. And there not much use in getting a house when you cant pay the water / electric / council tax .... seems a bit pointless having a empty property just to say you have one.

EdInvestor

And there not much use in getting a house when you cant pay the water / electric / council tax ....

Of course these things come free to people who rent.....;)

Hereward

sanfrancisco wrote:

The point also is that inflation has been rampant on all non discretionary items, and has been falling (now rising watch out) on non discretionary items (DVD's etc). Tell me one item that people HAVE TO BUY that has/is not rising at 10% plus a year - council tax, gas, eletricity, petrol, train tickets, TV licence etc etc. I can only think of communication (internet and phones). Sky has gone up.

Easy: food (this makes up a very large proption of most household budgets). Altough the price of wheat, and therefore bread, has risen this year due to poor crop yeilds, the price of most other food stuffs has remained static or even fallen slightly due to the supermarket price wars.

sanfrancisco

Hereward wrote:

Easy: food (this makes up a very large proption of most household budgets). Altough the price of wheat, and therefore bread, has risen this year due to poor crop yeilds, the price of most other food stuffs has remained static or even fallen slightly due to the supermarket price wars.

I sort of agree, food a couple of years ago was cheaper than before, but recently food has gone up massivesly. Orange Juice, Milk, all bread products (pizza etc). Watch out over the next few months. With oil going up so much over last year or two this feeds into EVERYTHING.

Hereward

sanfrancisco wrote:

I sort of agree, food a couple of years ago was cheaper than before, but recently food has gone up massivesly. Orange Juice, Milk, all bread products (pizza etc). Watch out over the next few months. With oil going up so much over last year or two this feeds into EVERYTHING.

Everything that you have listed, expect milk, has increased in price recently due to poor crop yields making the raw ingredients more scarce compared to supply. Around here I haven’t seen a large change in the price of milk so I can’t comment about that. Oil prices have been falling as of late, so I do not expect to see a large increase in food prices as farmers and suppliers are forced to absorb these costs as the supermarkets are not willing to increase the price they are willing to pay to purchase the food that is produced. The same will be true about other sectors of the economy: fuel prices are rising, but other costs are falling.

sanfrancisco

Oil has trebled from $25 in 2001 to now. The recent (minor) falls are a blip and after the US elections the price will be up again. Expensive oil is here to stay. You will see milk rising soon.

What other costs are falling?

meanmachine_2

I'm not much of a boozehound and was in Threshers yesterday for the first time in a couple of years.

I couldn't BELIEVE the price of wine and spirits. The cheapest was 5.99.

Also went for a pub lunch the other week. The prices were astronomical.

Low inflation? Maybe on some imports. But on a lot of goods and services it's through the roof.

Add to that utilities and rising mortgages (which seem to go up on average by around 20K every year) and the situation can't go on for much longer.

All that's been stopping us from a recession is cheap borrowing.

By the way, in my industry there has been ZERO wage inflation for the last 10 years.

dougk_2

Electronic goods are constantly falling!

The balance is shifting in terms of implementation costs to renewable energy and alternitive engergy forms. If oil prices rise to high then the alternatives will simply take over, it is the main reason why oil has been used up to now- because it has been cheap.

If you compare like with like i.e. what peopdle had in 60's and 70's to now you will see that houses are more affordable e.g. people didn't all have cars,tv's electronic items, mobiles and still couldn't buy a house. Perhaps if people gvae these things up you would see how much better off people are now.

The big difference is peoples expectations over the ages - we all expect more now.

The dreams of our parents was possibly to have a house a family and a good job - now we all have bigger and better dreams.

meanmachine_2

dougk wrote:

If you compare like with like i.e. what peopdle had in 60's and 70's to now you will see that houses are more affordable e.g. people didn't all have cars,tv's electronic items, mobiles and still couldn't buy a house. Perhaps if people gvae these things up you would see how much better off people are now.

Oh yes, let's do that, shall we?

1970
Wage: £2000
House: £8000
TV: £200
Wage inflation: 10%

2006
Wage: 25000
House: 200,000
TV: £500
Ipod: 150
Wage inflation: 3%

I know which decade I'd rather be living in thanks. 1970 house prices high? Initially, yes. In 2-3 years, my 1970s pay packet would have fattened out nicely.

Not anymore.

Hereward

sanfrancisco wrote:

With oil going up so much over last year or two this feeds into EVERYTHING.

sanfrancisco wrote:

Oil has trebled from $25 in 2001 to now. The recent (minor) falls are a blip and after the US elections the price will be up again. Expensive oil is here to stay. You will see milk rising soon.

What other costs are falling?

Using your example about the trebling of the cost of a barrel of oil then all goods sold in the economy should have increase by a similar percentage of the oil. Now let me think: where was this huge inflation that we have just experience it the price of everything we buy? :rolleyes: I can't think of one thing that has trebled in price since 2001; therefore, the economy has somehow absorbed some of this this cost to help keep prices down.

Edited to add:

You place a lot of confidence in the fact that the reason that the price of oil is currently falling is due to the US elections next month. As OPEC produces most of the world's oil, and the US is not part of this cartel, there are most probably more factors that are influencing the prices rather than the US.