Lack of supply boosting prices...

Sibley

Found this accurate article:

Really is getting silly now. Do any of the bears really think prices will drop 70%?:rotfl:


http://www.bloomberg.com/news/2011-01-17/u-k-home-asking-prices-rise-as-property-supply-shortage-props-up-values.html

Bangerchick

If it is a "shortage of properties propping up prices" then I wonder how big the impact of increased numbers of repossessions coming on the the market would be, if this starts to happen once interest rates rise. A market propped up by a specific issue doesn't seem entirely sustainable to me.

HAMISH_MCTAVISH

Bangerchick wrote: »

If it is a "shortage of properties propping up prices" then I wonder how big the impact of increased numbers of repossessions coming on the the market would be, if this starts to happen once interest rates rise. A market propped up by a specific issue doesn't seem entirely sustainable to me.

Supply and demand is the only issue. There is nothing else.

You cant describe the absolutely fundamental Market price setting mechanism as a "prop".

Bangerchick

Hmmmm, if the short supply is only a temporary effect of the current economic climate, then yes, I do believe it could be described as a prop. Not exactly firm foundations is it?

HAMISH_MCTAVISH

Bangerchick wrote: »

Hmmmm, if the short supply is only a temporary effect of the current economic climate, then yes, I do believe it could be described as a prop. Not exactly firm foundations is it?

Short supply is a result of a decade of underbuilding, leading to a million house shortage getting worse by 150000 houses a year.

Population is growing by 400000 a year, we add 250000 households but build only around 100000 houses.

That's why we have a shortage, and that's why prices here held up so well and are now just 10% below peak despite artificial leading restrictions cutting 70% of mortgage funding.

macaque_2

Sibley wrote: »

Do any of the bears really think prices will drop 70%?

In a word, yes! When you say 'accurate' I assume this means it aligns with your hopes. The article in question is a puff piece scourced from an employee of Rightmove and refers to asking prices. The box jellyfish in the bath is the divergence between the blue line and the red line in the graph below.




http://www.moneyweek.com/news-and-charts/economic-indicators/uk-house-prices/02-uk-net-mortgage-lending-00011.aspx

smeagold

HAMISH_MCTAVISH wrote: »

Supply and demand is the only issue. There is nothing else.

You cant describe the absolutely fundamental Market price setting mechanism as a "prop".

Affordability. People can demand all they want but if they can't afford they can't buy. You expecting all the FTBs to suddenly get rich enough to find a min £30k deposit, so they will be fighting over property and banks will be showering them with loans? no chance.

from the same article:

Some reports still suggest the housing market is weakening ahead of the biggest spending cuts since World War II. Acadametrics Ltd. said on Jan. 14 that house prices fell in December as a lack of mortgage finance prevented buyers from making a purchase. Hometrack Ltd. said on Jan. 12 that banks won’t step up mortgage lending this year

No mortgages, no buyers, no buyers, no price rises

AndyGuil

Lack of supply is a superficial way of propping up the prices. It ultimately doesn't solve the issue of lack of lending particularly to FTBs. Until lending increases house prices won't increase.

Sibley

Over the last few years I've seen every graph and heard every reason why house prices are going to drop next month etc.

They never have. Houses in SE especially Kent and South London have risen. Homeowners refuse to drop prices and there are no decent homes in EA's cheap.

That's fact.

If there were bargains about you lot would be looking at them instead of posting what you would like to happen on here.

Face it. The only time prices looked like crashing was when the government stepped in and stopped it happening. Doesn't that tell you something?

We will not allow it to happen.

Procrastinator333

Sibley, I asked in a previous thread (a few times actually) and you never replied. How many properties do you own? I thought there was a thread where you referred to your property being worth about £250k. Do you really only own 1 property?

DervProf

Sibley wrote: »

Really is getting silly now. Do any of the bears really think prices will drop 70%?:rotfl:

No. And I don't think many did.

However, if you want to believe that a significant number of bears did predict that, and it keeps you :rotfl:, then carry on.