House prices 'to fall for the next five years' in longest property slump for a lifeti

chucky

Poshbird wrote: »

10.5% down by 2015 is a crash if everything else keeps going up in `price` Property is crashing in `value`...............

do you really think that everything else will keep on going up in price and property will be the only asset class that will exclusively drop?

Poshbird

chucky wrote: »

do you really think that everything else will keep on going up in price and property will be the only asset class that will exclusively drop?

I think its possible and probable that property in the UK may even go up a little in `price` but be crashing in value.

I mean it may flatline or go up priced in Pounds Sterling but measured other ways will be crashing. Like how many barrels of oil or ounces of gold or silver you need to buy an average house.

des_cartes

rxbishop wrote: »

10% drop in real terms in 5 years?

So say 100k house, 20k deposit - 80k mortgage. you'd've surely paid 10% off in equity after 5 years even with a 25 year mortgage so you'd only owe 72k. What will inflation be? 4%, say 20% over 5 years so they're saying the house should be worth 120k, but will actually be worth 108k. but you only owe 72k and therefore have 36k of equity a return of 80% on your original 20k investment. Sounds good to me and I'm a renter, hoping to buy soon. with a 15 year mortgage you'd've prob paid off closer to 25% so you'd have 60k owing and 48k equity - a 140% return. Better than a bank.

Have you factored in the effect of rising interest rates on mortgage repayments and savings along with falling living standards?

des_cartes

chucky wrote: »

do you really think that everything else will keep on going up in price and property will be the only asset class that will exclusively drop?

Food,fuel and clothing all going up in price and property falling in price now. Why is that?

Poshbird

des_cartes wrote: »

Food,fuel and clothing all going up in price and property falling in price now. Why is that?

Its obvious as the currency supply of the world expands there are more units of fiat currency chasing the same amount of goods and services. Its just that property in the UK is still overvalued so will have less units chasing that in the future.

Generali

Poshbird wrote: »

Its obvious as the currency supply of the world expands there are more units of fiat currency chasing the same amount of goods and services. Its just that property in the UK is still overvalued so will have less units chasing that in the future.

The quantity of goods and services is also expanding.

In the UK and many other countries, the stock of money is growing but the money supply is flat or falling.

Poshbird

Generali wrote: »

The quantity of goods and services is also expanding.

In the UK and many other countries, the stock of money is growing but the money supply is flat or falling.

The amount of gold is increasing yes but the amount of silver is decreasing.

Are you talking about outstanding revolving credit?

IveSeenTheLight

Poshbird wrote: »

10.5% down by 2015 is a crash if everything else keeps going up in `price` Property is crashing in `value`...............

Seriously in your opinion a 10.5% drop in "real terms" constitues a crash.

Nominally the price may increase in that scenario but you'll still consider it a crash.

Nominally people may still be paying more but you'll still consider it a crash if a "10.5% real term" fall occurs.

I'm wonderingm would you measure the real term against inflation as normal or against wages?

Certainly, there may be a 10.5% real term fall against inflation and an even bigger gap against wages i.e. inflation increases 20%, house prices increase 9.5% and wages increase 5%

rxbishop

des_cartes wrote: »

Have you factored in the effect of rising interest rates on mortgage repayments and savings along with falling living standards?

No but I haven't factored in that the mortgage may be less than renting, or that you might lose your job or that the article is just one big glorious guess from start to finish.

Poshbird

Generali wrote: »

The quantity of goods and services is also expanding.

In the UK and many other countries, the stock of money is growing but the money supply is flat or falling.

Wealth does not get created out of thin air if that's what you are suggesting, wealth can only get transferred.

The population of the planet is increasing at about the same rate as goods and services.

Gold is a good example the amount of gold getting mined and stockpiled is increasing about the same rate as the population of the world. Silver on the other hand is getting used up and about 95% of all silver even mined has already been used up.

This is indisputable. But I will no doubt get slammed for mentioning the 'S' word!