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Debate House Prices
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CPI FALLS to 4%
Comments
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Have a look at this link https://forums.moneysavingexpert.com/discussion/3169124
I'd read this as retailers increasing prices without accepting a corresponding price increase from their supply base i.e. buncing. If there was real and effective competition this wouldn't be possible.
i know only to well what goes on in the food retail industry and competition is happening, its just the big 4 are making huge profits from some lines but can still compete with the other big 3 by offering promos0 -
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Thrugelmir wrote: »The promos are backed by marketing and price support from the food manufacturers.
My mate used to supply [agricultural commodity] to [large supermarket chain].
They'd ring him up now and again and tell him he was doing bogof in a couple of weeks so they'd need twice the quantity at half the price per unit.
I heard a very good description recently of the modern supermarket. 'Suppliers rent shelf space'.0 -
Thrugelmir wrote: »The promos are backed by marketing and price support from the food manufacturers.
read my comments , that is what i said already in the thread.0 -
Intersting that Hamish is happy about a drop in inflation, and yet he champions inflation in house prices as a good thing. Once again proving that his views are just based on vested interests and selfishnessHAMISH_MCTAVISH wrote: »One day you'll learn the difference between consumer goods and investment assets.
Straight from the horses mouth ............ houses are an investment asset ..........0 -
Straight from the horses mouth ............ houses are an investment asset ..........
Of course they are.
Many assets have utility value.
Agricultural land, commercial property, classic cars, vintage wine, even precious metals..... Houses are no different.
Houses, like other assets, also deliver you a financial return. You pay far less to buy one, even with a 25 year mortgage, than you would to rent one for the same time period. And then you live rent and mortgage free for the rest of your life.
So you can call it whatever you like.... House....Home.....Property.....Asset etc.
But any way you cut it, something that delivers you a financial return for owning it is an investment.“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 -
HAMISH_MCTAVISH wrote: »Of course they are.
Many assets have utility value.
Agricultural land, commercial property, classic cars, vintage wine, even precious metals..... Houses are no different.
Houses, like other assets, also deliver you a financial return. You pay far less to buy one, even with a 25 year mortgage, than you would to rent one for the same time period. And then you live rent and mortgage free for the rest of your life.
So you can call it whatever you like.... House....Home.....Property.....Asset etc.
But any way you cut it, something that delivers you a financial return for owning it is an investment.
I was listening to an economist on the tv yesterday and she was talking about the american housing crash, and saying she thinks people have finally realised that housing is a place to live and not an investment.
The main cause of the banking crisis (and recession) was people viewing housing as an investment. If you dont accept this then you are crazy.I am not a financial expert, and the post above is merely my opinion.:j0 -
I was listening to an economist on the tv yesterday and she was talking about the american housing crash, and saying she thinks people have finally realised that housing is a place to live and not an investment.
The main cause of the banking crisis (and recession) was people viewing housing as an investment. If you dont accept this then you are crazy.
The USA and UK have very different housing markets. Traditionally, US housing has gone up with inflation as it is relatively easy to build in most areas so the land doesn't really appreciate in value except in the nice bits of city centres and a few other areas chased by the rich for one reason or another. Housing as a speculative investment has traditionally been a lousy one as there aren't the price spikes you need to buy a house, hold it and flog it while making a good profit after costs.
That is the market that is returning in the US IMO. There has been a one-off spike in prices and now they are falling back. The spike was caused initially by extending lending to groups that wouldn't normally be able to get a mortgage (the non-conforming or 'sub-prime') and was then fuelled by people betting on rising house prices.
Housing as an investment to provide an income stream or to avoid paying rent is a different thing to buying houses to flip. Warren Buffet describes his house as his best investment in his latest Letter to Shareholders.0 -
The main cause of the banking crisis (and recession) was people viewing housing as an investment. If you dont accept this then you are crazy.
Not directly.
People who bought thinking (hoping) for an excellent return didn't really cause anything. It was lenders lending far too much on two counts - LTV and Income Multiple.
Many American borrowers lost very little. In most cases, they are allowed to 'walk away' from the loan simply by giving back the keys. So if you bought on 100% loan, then had a crash, you either consider your mortgage as 'rent' and stay, or simply hand back the keys and move on - dissappointed that your 'investment' didn't take off.
So the banks, having committed sin number 1, then committed sin number 2. All these loans were 'securitised'. Put simply, they are parceled up, bankers take a 'commission' from them, and they are sold on to investers to [theoretically] make money out of them instead of the original lender.
Just like the Lloyds of London crash. Bad risks were hawked in ever decreasing circles around the market. Someone gets a 'wedge' at every turn, and whoever is left holding the baby when the music stops has lost thier shirt. Banks took ages to discover how 'toxic' these were - on top of the 'direct' loans that were toxic as well.0 -
The USA and UK have very different housing markets.
True.
They have a significant housing surplus, for starters. We don't.“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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