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Debate House Prices


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This can't go on: house prices must drop or wages must rise.

Graham_Devon
Graham_Devon Posts: 58,560 Forumite
Part of the Furniture 10,000 Posts Combo Breaker
in Debate House Prices & the Economy
One veteran fund manager warns that he has only ever seen two bubbles that have failed to deflate. How much longer can the UK property market remain one of them?

Not very long, apparently.

Need to read the full article for his reasonings. Pretty interesting viewpoint.

http://www.guardian.co.uk/business/2010/oct/10/halifax-grantham-housing-bubble
«1345

Comments

  • THE_GHOULS_PARADISE
    THE_GHOULS_PARADISE Posts: 107 Forumite
    Nothings "nailed on". The government wont let anything fall. House prices are too big to fail.
  • undetterred
    undetterred Posts: 635 Forumite
    500 Posts
    Good to have you back ghoules,can't keep a good man down.
  • Silverbull
    Silverbull Posts: 369 Forumite
    Graham_Devon wrote: »
    Not very long, apparently.

    Need to read the full article for his reasonings. Pretty interesting viewpoint.

    http://www.guardian.co.uk/business/2010/oct/10/halifax-grantham-housing-bubble

    "In the UK market, he's referring to the affordability of houses as measured as a multiple of earnings. Indeed, the Nationwide each month provides a "house price to earnings" graph alongside its own price index. The latest shows prices running at 5.4 times earnings, compared to the long-run average of four times. The difference may not sound vast but the numbers imply that the value of an average house would have to fall 25% tomorrow to get back to the long-term average instantly. That's a powerful statistic.
    The gap could, in theory, be closed from the other direction – earnings could rise. But how likely is that in the next few years? "

    How likely is that the next few years? About as likely as the new Bruno THE_GHOULS_PARADISE joining Mensa.
  • nearlynew
    nearlynew Posts: 3,800 Forumite
    THE_GHOULS_PARADISE wrote: »
    Nothings "nailed on". The government wont let anything fall. House prices are too big to fail.


    Another ghoulie talking ghoulies.


    The clown production factory must be working overtime this weekend.
    "The problem with quotes on the internet is that you never know whether they are genuine or not" -
    Albert Einstein
  • undetterred
    undetterred Posts: 635 Forumite
    500 Posts
    nearlynew wrote: »
    Another ghoulie talking ghoulies.


    The clown production factory must be working overtime this weekend.


    Enjoyable all the same.
  • madnessofBruno
    madnessofBruno Posts: 82 Forumite
    edited 10 October 2010 at 2:05PM
    Doctor_Gloom wrote: »
    Won't be long now...



    THE_GHOULS_PARADISE


    PPR

    Good choice Bruno a breakthrough on usernames. Next step in your wrong mis-guided direction.

    AKA THE_FOOLS_PARADISE
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I particularly like this one.
    Almost the only force acting as a support to affordability is ultra-low interest rates.

    The only support is that mortgage payments much are lower than in the past icon7.gif

    http://www.housepricecrash.co.uk/graphs-base-rate-uk.php
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    StevieJ wrote: »
    I particularly like this one.



    The only support is that mortgage payments much are lower than in the past icon7.gif

    http://www.housepricecrash.co.uk/graphs-base-rate-uk.php

    Yer. Because of ultra low base rates.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Graham_Devon wrote: »
    Yer. Because of ultra low base rates.

    Yer, and likely to be with us for some time yet.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    StevieJ wrote: »
    Yer, and likely to be with us for some time yet.

    Good.

    But the point is that once that goes, the bubble bursts. Or bursts on a bigger scale anyway.

    Saying they should be with us a while doesn'd detract from the article, more kicks the can.
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