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Debate House Prices
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Have BoE Lost All Credibility Over IRs?
Comments
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HAMISH_MCTAVISH wrote: »ILW-- A plane might fall on my house.
Hamish--- What makes you think that is remotely likely?
ILW--- It's a big sky with a lot of planes.
Hamish--- Again, can you explain why you think there is more than a 0.00000000001% chance of a plane falling on your house?
ILW--- Well a plane once fell on someones house...... There's a lot of planes....
Hamish--- Never mind.
I definitely wouldn't put rates rising to 3% or above in the same category as a plane falling on my house. Just as a side question Hamish, if you were say 25, just starting out in life, what would you like to see happen to house prices from their current level.Have owned outright since Sept 2009, however I'm of the firm belief that high prices are a cancer on society, they have sucked money out of the economy, handing it to banks who've squandered it.0 -
He's wrong. If anyone would give me a thousand to one even I'd bite their hand off (odd expression on reflection).
Well, I don't think a million to one is accurate, nor even a thousand to one, but I do think the chances of it happening are vanishingly small.
If I had to put odds on it, somewhere around 100-1.
The BoE have already stated they believe the neutrality level for base rates is now somewhere around 3%. Other commentators suggest it's actually lower, at 2.5%.
I'm just not seeing where the expansion of money supply will come from in the next decade to require demand destruction of the magnitude that would happen with base rates at nearly double the neutrality point.“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 -
Apparently you know that rates will still be under 5%.
I know that risk is quantified by the probability of an occurence times the impact of an ocurrence.
So assuming rates will remain below 5% for a decade is very far from risky.“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 -
The current rates do worry me slightly, as the projected buying date for us is just over a year it might be clearer then, but right now I would liek to bet either way and I get a feeling whichever path we choose will be the wrong one.Have my first business premises (+4th business) 01/11/2017
Quit day job to run 3 businesses 08/02/2017
Started third business 25/06/2016
Son born 13/09/2015
Started a second business 03/08/2013
Officially the owner of my own business since 13/01/20120 -
The current rates do worry me slightly, as the projected buying date for us is just over a year it might be clearer then, but right now I would liek to bet either way and I get a feeling whichever path we choose will be the wrong one.
You can bet that interest rates will head higher as they can't really go much lower. When and by how much? Nobody knows.0 -
HAMISH_MCTAVISH wrote: »I know that risk is quantified by the probability of an occurence times the impact of an ocurrence.
So assuming rates will remain below 5% for a decade is very far from risky.
All depends on what the impact will be.
My earlier point was that if someone is RELYING upon IRs staying below 5% in then years that is a pretty big gamble.0 -
Hamish, if you were say 25, just starting out in life, what would you like to see happen to house prices from their current level.
If I was 25 and starting out in life I'd know full well that the sticker price of the house was the least important component of total cost.
I'd want interest rates to stay as low as possible for as long as possible, as this will have a far bigger impact on the total cost I pay than the sticker price of the house itself.
Given the choice, the young should be praying for peak prices and base rates of 2%, rather than 20% falls and base rates of 5%....“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 -
If we are talking a bout 10 years isn’t some of that gamble off set by wage inflation?0
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My earlier point was that if someone is RELYING upon IRs staying below 5% in then years that is a pretty big gamble.
Why?
Once again I ask you to explain the conditions under which you think a rise to 5% in a decade is a probable scenario, and why the impact of a rate rise over that timeframe would be devastating. In other words, why is it "very risky" as you claim.
If you can't, then there is no point continuing this discussion.“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 -
If we are talking a bout 10 years isn’t some of that gamble off set by wage inflation?
Now we're getting somewhere.....;)“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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