House price falls would be excellent for the economy

The_Fox_3

I have just gone over this thread, it's hilarious, bulls are saying it time and time again

"You are only suggesting this because you want a house". Lol

YES YES YES

They say it as if they have caught me out, I really am now quite fascinated by the psychology of their mindsets now, are some so spitefull and evil that they get off from their " I have something you don't have nah nah nah" mentality

DervProf

The_Fox wrote: »

I have just gone over this thread, it's hilarious, bulls are saying it time and time again

"You are only suggesting this because you want a house". Lol

YES YES YES

Ah, but they know your cunning plan. You are going to buy a "cheap" house then sell it for a bit, fat profit.

You are not called "The_Fox" for nothing, are you ?

I believe that you might just want to buy a place of your own. What a crazy thought, eh ?

Graham_Devon

Theres merit in the OP.

I think we all know, for the economy to function on a stable level, prices do need to be at a reasonable affordability point.

And yes, everyone can find affordability figures which suit their viewpoint. All of these figures simply depend on whats measured and how it's measured. Personally, I think the average income to average house price, is probably the best measure, as it includes a lot more people by default. Measuring household income vs average price is another way. But measuring those who can afford properties at under 4x their income, and stating property is therefore affordable is a little off the mark, in my humble opinion. Whats more, it's pretty obvious that people who can afford homes and have bought, can afford homes.

Anyway, back to the point. It would be good for the economy. But would take a whole lot of pain first, which would be bad for the economy, and more importantly, very bad for those tied up, hoping for their pensions, and in some cases, pension gamble to play out. These people also run the country. Therefore, it's these people who do their best to direct the economy down the path they see as the best solution.

It would hurt all those who invested in housing assets. It would hurt the banks, probably cripple them in all honesty. It would hurt the government through ratings.

It's currently hurting the younger generation. And that, although a concern, isn't as big a concern as protecting those who do have, rather than have nots.

Best solution would probably be very little movement for a decade, probably more.

Loughton_Monkey

DervProf wrote: »

.....You are not called "The_Fox" for nothing, are you ?
....

Well almost nothing, I expect.

J_i_m

I would quite welcome a house price "crash".... yes simply so I may be able to afford one.

ILW

The_Fox wrote: »

I have just gone over this thread, it's hilarious, bulls are saying it time and time again

"You are only suggesting this because you want a house". Lol

YES YES YES

They say it as if they have caught me out, I really am now quite fascinated by the psychology of their mindsets now, are some so spitefull and evil that they get off from their " I have something you don't have nah nah nah" mentality

The bit you don't seem to get is that if house prices were 30% cheaper people would just buy houses that were 30% better for about the first day, and then them houses would increase in value (due to buyers competing to buy them) until a market value is found. In other words we would just get back to where we are. (Not sure I explained it very well).
The bottom line is that, if you are earning a moderate wage, you can afford to buy now, but probably not as big or in the area you prefer.

Graham_Devon

ILW wrote: »

The bit you don't seem to get is that if house prices were 30% cheaper people would just buy houses that were 30% better for about the first day, and then them houses would increase in value (due to buyers competing to buy them) until a market value is found. In other words we would just get back to where we are. (Not sure I explained it very well).
The bottom line is that, if you are earning a moderate wage, you can afford to buy now, but probably not as big or in the area you prefer.

This isn't really true.

Take a look at Ireland or the US. They continue to fall.

Same goes for the old myth of "if prices fell 25%, investors would be flocking to them". Again, not true. Again, look at Ireland or the US.

chucky

The_Fox wrote: »

House price falls would be excellent for the economy

wrong and very, very far from what is good for the economy.

ILW

Graham_Devon wrote: »

This isn't really true.

Take a look at Ireland or the US. They continue to fall.

Same goes for the old myth of "if prices fell 25%, investors would be flocking to them". Again, not true. Again, look at Ireland or the US.

Not sure about US, but in Ireland they now have more houses than people.

wotsthat

Graham_Devon wrote: »

Anyway, back to the point. It would be good for the economy. But would take a whole lot of pain first, which would be bad for the economy, and more importantly, very bad for those tied up, hoping for their pensions, and in some cases, pension gamble to play out. These people also run the country. Therefore, it's these people who do their best to direct the economy down the path they see as the best solution.

The point is hypothetical, nothing wrong with that, but house prices are where they are now, today, in the real world. If tomorrow the government waved a magic wand and house prices were reduced by 30% there would be a stampede of buyers and, wait for it, no sellers.

If someone needs house prices to fall 30% from here to be a buyer then, realistically, they are not even a potential buyer because there are plenty building up savings who will be entering the market well before that and competing for houses.