Are House Prices Going to Crash?

whambamboo

Yes, within the next year

jyonda wrote:

A house price crash by general concensus would be very handy indeed as I'm sure it would benefit almost everyone except those who bought their first property in the last 3 years. That's probably not such a big number of people and it's not like they didn't get any warning!

A crash would benefit them too - if they ever wanted a bigger house it would be more affordable.

The only people it doesn't benefit are people who have a house and would like a smaller one.

aderbyshirelad

jyonda wrote:

A house price crash by general concensus would be very handy indeed as I'm sure it would benefit almost everyone except those who bought their first property in the last 3 years. That's probably not such a big number of people and it's not like they didn't get any warning!

Very handy for who exactly?

Abaxas sums it up perfectly in their last post...

Lets just have a house price crash, mini recession then get back to making money again. If people can hold on they'll not loose out in the medium/long term. But that doesnt mean it won't hurt in the soft term (3-5 years).

It seems a lot of posters here want a great big crash, instigated by the government if necessary, so they can pick up a house on the cheap BUT then they would like rampant HPI to start again to boost their wealth, even though half of them profess that they just want a home and don't see it as an investment.

The hypocrisy, bitterness and downright selfishness shown be some here leaves me gobsmacked. Good luck to you all...

jyonda

No, they will stabilise and wages will catch up

whambamboo wrote:

A crash would benefit them too - if they ever wanted a bigger house it would be more affordable.

I'm not sure how being in negative equity would help them really. Either they'd be handing in their keys and blacklisted or paying through the nose and trapped.

aderbyshirelad wrote:

Very handy for who exactly?

Renters looking to buy, investors looking to rent out, homeowners looking to upgrade. Just about everyone except those 'left holding the bomb when it goes off' as one poster put it.

lynzpower

I've absolutely no idea

House price crashes dont happen in a vacuum.

I anticipate they will mean job losses and further cuts in the state machinery, leaving us all worse off.

Or am I missing smething here again?

wibble68_2

Sisyphus wrote:

A question to all those who say/think that house prices are going to flatten out and not rise further or crash. What makes you think that? I look at charts of asset prices all day long. I've yet to find one where prices just flatten after a sustained cycle of inflation. Could you give me an example of another asset where this has happened?

This has always been my argument against the mythical soft landing.

When HPI was near to, or slightly above CPI, many experts had declared a soft landing. Even someone like me, who has always believed in the cyclical nature of markets, was starting to believe the soft landing was on the cards.

With HPI nearing double digits, the soft landing process has had to be restarted. Hence the interest rate hikes we've seen this year.

At some point the BOE may have to engineer a hard landing to avoid a complete melt down.

Pobby

Yes, but not yet

lynzpower wrote:

House price crashes dont happen in a vacuum.

I anticipate they will mean job losses and further cuts in the state machinery, leaving us all worse off.

Or am I missing smething here again?

I would have thought you are correct lynz.

cupid_s

I've absolutely no idea

jyonda wrote:

I'm not sure how being in negative equity would help them really. Either they'd be handing in their keys and blacklisted or paying through the nose and trapped.

But not all first time buyers would be stuck in negative equity. In my opinion buyers who have bought within the last 3 years or so when interest rates were low should have realised they would rise and accounted for this when looking at how much they could afford to borrow. It surely isn't that difficult to work out if you can still afford the repayments if interest rates were much higher. I managed it. If you couldn't afford higher rates, don't buy.

People have overstretched themselves and thats their own fault. I was a first time buyer in 2004 and I certainly wouldn't be in negative equity if there was a crash. As whambamboo said, it's the most likely way I'll be able to afford to buy a bigger house.

I don't want a crash, as I know people who will be in the sh*t and I don't want that for them. But they were told before they bought to be careful of overstretching and half of me (the very mean side) thinks 'serves you right'

jyonda

No, they will stabilise and wages will catch up

You may not be in negative equity but you may have seen the size of your equity shrink to nothing which would still be a massive setback if you'd spent years renting and saving up for a big deposit. you'd have lost the fees too. If you bought at ANY point and your property falls below what you paid for it you'd be better off if you hadn't bought it. Surely?
Even those saying 'well that 4 bed detached is much closer now' are over looking the fact that you'd be much closer to it if you didn't buy in the first place.

BobProperty

Yes, within the next year

mr.broderick wrote:

..... i dont care if i dont make a penny on it, its all relative anyway.....

I wonder why you bother posting on a money saving site then?

whambamboo

Yes, within the next year

aderbyshirelad wrote:

It seems a lot of posters here want a great big crash, instigated by the government if necessary, so they can pick up a house on the cheap BUT then they would like rampant HPI to start again to boost their wealth, even though half of them profess that they just want a home and don't see it as an investment.

The hypocrisy, bitterness and downright selfishness shown be some here leaves me gobsmacked. Good luck to you all...

You what?

I've seen people calling for a crash, so that people can buy for more a reasonable price, but who here as then said they want rampant HPI following this crash???? You seem to be imputing your own selfish greed onto others without any evidence to support this.

I've explained this already, but HPI does not benefit owners of housing (only people selling it), so why would I want it? You've fallen for the 'HPI has made me richer' nonsense hook, line and sinker.

If I buy a 3-bed detached with a small garden now, I will want a nicer house with a bigger garden in a few years. SO how is HPI going to benefit me?

Housing should not be an instrument of speculation: it should be possible for young families to afford suitable housing, and this implies some kind of crash. Why you think that means we won't learn our lesson, and will proceed to inflate prices all over again is quite beyond me.