House prices....

A.L.D.A

wanchai wrote: »

There is no shortage of houses as far as I can see, there are thousands of them standing empty! There is a massive oversupply.

There is a lot of them in Tigers Bay and similar and there are a lot that also need knocked down or repaired. Yes there are houses unfinished, but they are unfinished because no one is going to tie up more money if there is the possibility that they will not sell. Is that a good sign? I don't think it is.

You can see an empty house, the reason it is empty is often less clear. What also is less visible are houses being shared, grown children living at home (often with families) or emergency accommodation hostels.

highrisklowreturn

The bay.....I see it's been half-demolished at N Queen St, very sad.

x12yhp

A.L.D.A wrote: »

If I see no point in selling a house as I believe that it is worth more than anyone is willing to pay then that may well be my deluded state, but if enough people are of that opinion then we fast get to a situation where we have few sales.

Yes, that is precisely what has happened. What you and your fellow bulls must rely upon is that the financial situation improves in such a way that people can afford what YOU think the property is worth before things get far enough that the interest rates rise. At the moment, a great many people can do just as you say because rates make it such that it costs less to service a large loan than it would to sell up and try to decrease debts. Raise the rates and that situation ceases to be the case. Now these owners find themselves in a tight spot and really quite needing to sell, the market finds itself still wanting to buy but now having access to less money. So there we have the scenario where the type of person you describe loses big time.

Now there are no guarantees that this will occur but think of the alternative such that these people get what they want. Options... short and rapid upturn, people have money but central bank delays in raising rates. Best case scenario there is a 6 month window, most likely only a couple of months if it is this rapid. Perhaps a slower recovery... but isn't that what we supposedly have now? The housing market is still going down and there is a looming threat of rate rises.

Frankly, anyone with a debt that would become unserviceable with a BoE rate of 5% should not be sitting smug. They should be getting out. The chances of things coming together for them are just too low. Of course, if you own outright or have no trouble in affording an elevated mortgage, then you are just right - stay put. I would!

motorguy

saverbuyer wrote: »

Between last year and this year you can knock approx 17% off. That's how much they have dropped.

Also bear in mind that someone purchasing a 420k house would need to be earning 130K.

Did you buy the site closer to peak? Did you finish it a year ago? When did you start the foundations?

Now I’m not going to get bogged down on what you or anyone else thinks your house is worth. It maybe 4000 square foot and the RV may be 1 million but it will only be “worth” something when you put it on the market and try to sell it.

The market does not care what it cost you to build and the site was only worth what YOU paid at the time. This means nothing.

A better idea of value is a bank’s valuation. This tell you that in a distressed sale the bank can expect to get x back. But look at some of the repos around the banks are probably shouldering losses here.

I'm telling you to challange the valuation unless you are happy paying 3K of rates a year?

valuation was done by rates office jan 2011. not sure of the revance of when site was started, cost of site, etc?

there seems to be a steady consensus here that houses are roughly worth a little more than their rv. however you seem adamant that my houseis some sort of massive exception to that and that the rates offive have made some sort of massivee error with my house as it cant possibly be worth that? yet you havent seen it and know practicially nothing about it?

or are you sayimg that everyone who has had an rv done recently should contest it as a matter of course?

or just me because you dont think my house is worth it?

A.L.D.A

x12yhp wrote: »

Yes, that is precisely what has happened. What you and your fellow bulls must rely upon is that the financial situation improves in such a way that people can afford what YOU think the property is worth before things get far enough that the interest rates rise.

I am no Bull. All I am suggesting is that if we do not build houses for a growing population that two things will happen;

• More people will be homeless.
• It will tend to cause an upward pressure on future house prices.

What I would like to see is stability, by whatever means, so we can all start to plan effectively. The longer the current situation lasts the worse our future prospects.


What I paid for my first house would be around £150,000 now. Was looking at what the equivalent house now, Asking price around £180,000 but there are also some crazy prices.

I don't want to see expensive houses quite the opposite. Just suggesting we have problems ahead.

wanchai_2

A.L.D.A - may I ask when you bought your house?

Also, an asking price is precisely that.

saverbuyer

No, there seems to be a steady consensus that houses are at 2004-2005 levels and falling this is not the same as saying for all house prices RV is the current value. If you actually look at houses you’ll know that RV setting in 2004 was not an exact science. Some RV are very high and some are low. (There isn’t a hope in hell of selling at RV minus 30% for some, particularly the bigger houses where credit just isn’t available and the lower rungs of the ladder can’t trade up) Your house is not an exception. 2004-2005 was still a time of loose credit. What we can say is that the houses sell at the moment are at the low end of the market.

I’m not obsessed with your house RV you are. You resurrected this tread not me. I was merely pointing out that you would benefit (with money saving as this site suggests) by presenting land and property with evidence that its value is closer too 300K as your bank suggests. The bank who’s valuation gave a value they thought they could expect to recover if they were forced to sell your house and recover your borrowings.

I didn’t make this actual value you up. Your bank with (I presume) the aid of an RICS member did.

I’m saying everyone who has access to the evidence of value you have, should in the interest of saving themselves money contest their RV. It only makes sense.

The market has fallen massively in the past 4 years. It fell a further 17% in the last 6 months. I’m sorry for all those who bought or built in the last 7 -10 years and have to service massive loans on deprecating assets. I’m sorry for people who continue to pay interest on massive loans and will do for the length of the mortgage. If only they could have been objective and see that the housing bubble was unsustainable and prices will drop to affordable levels.

saverbuyer

A.L.D.A wrote: »

Saverbuyer

I think the Office of National Statistics believes the population is rising. http://www.nisra.gov.uk/archive/demography/publications/Pop_Trends_NI_Article.pdf
Have you any proof that it is falling for I would be interested.

Fortunately we do not live in the type of state that throws the elderly out of the houses they own. So please let us not go down that road.

Most believe we have a housing shortage. I would tend to heed the various housing associations, charities, housing branch etc. I think we do have a housing shortage. Here is a link from the Telegraph. http://www.belfasttelegraph.co.uk/community-telegraph/east-belfast/news/housing-shortage-is-at-lsquocrisis-pointrsquo-14917685.html It is a year old, but be assured that nothing has improved since last year.

House completions peaked in NI in 2006 and have fallen ever since. That is 4 years plus ago.

I see rents going up on good housing stock, I think that is a bad sign, but you do not believe that either. Time will tell.

I am not an advocate for expensive housing, quite the opposite. Because I believe housing needs to be affordable all I am saying is that there is a major problem looming.

Time will tell who has the right of it.

One article is about East Belfast only (and actual talks about a drop of 1K in the numbers on the waiting list from the previous year). Also numbers on waiting list mean nothing. As I’ve said previously I can live in a 5 bed on the Malone road and still be on the list. There’s also a culture in some part where it’s encouraged to get on the last as soon as you hit 18.

The first report is a boom time report. It actually talks about lowering birth rates and how “in-imigration” coming from the Eastern block. NI has been in recession for a few years now whilst England has emerged last year. Do you seriously think the Poles will be flocking over for all the construction jobs. Oh Wait… There are none…

We have no housing shortage.

We have no homeless problem.

What we do have is a culture where older people are encouraged to live in 4 bed houses on there own. Single mothers pop children out and are assured a house. Household sizes have decreased. They’ll inevitably get larger. No-one will be homeless.

RENTS ARE NOT GOING UP more than inflation. They are at the same level they were years ago. Please back those broad sweeping statements up with evidence.

x12yhp

A.L.D.A wrote: »

I am no Bull. All I am suggesting is that if we do not build houses for a growing population that two things will happen;

• More people will be homeless.
• It will tend to cause an upward pressure on future house prices.

What I would like to see is stability, by whatever means, so we can all start to plan effectively. The longer the current situation lasts the worse our future prospects.


What I paid for my first house would be around £150,000 now. Was looking at what the equivalent house now, Asking price around £180,000 but there are also some crazy prices.

I don't want to see expensive houses quite the opposite. Just suggesting we have problems ahead.

But your sentiment about what your house is worth (i.e. denial of market value) is extremely bullish. You have said nothing about your actual equity in the property but many of those who bought at the low to middle end of the market are highly leveraged. As I outlined, your 'take' on the situation, combined with high leverage is a potential disaster scenario.

We all complain about the banks and risk taking but there are an awful lot of people who see that they can afford something now and decide that means it is OK. This includes absolutely no risk analysis and makes the general population as bad as the bankers they whinge about.

A.L.D.A

wanchai wrote: »

A.L.D.A - may I ask when you bought your house?

Also, an asking price is precisely that.

It was back in the mid 70's. It was hard going at times; interest rates were nothing like now, but on the up side inflation eroded the value of the initial loan as wages were rising with inflation and not as now.

I would not like to see anyone have it any harder than I had, and do not believe that any average person benefits from expensive housing. Expensive housing is a burden on the economy. However if someone cannot buy a piece of land and build a few houses and make a reasonable profit then in the long run we have problems as the population is increasing. Also every year some of the housing stock needs to be replaced as it is beyond its useful life.

I know the asking price, is not necessarily the agreed price. Never was!


Saverbuyer

I think there is a housing shortage, and most of those in the social housing sector believe there is a housing shortage, you don't. I have yet to read an article that proclaims the housing surplus in NI. There are enough reports saying the opposite.