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Debate House Prices
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NI house prices now down 42% from peak
Comments
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Silence speaks volumes
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that silence certainly does speak volumes...Graham_Devon wrote: »Silence speaks volumesi'd like him to explain how house prices can rise by 50% in one area and rise by less in others when exactly the same lenders are offering the exactly the same rates in both places...
i bet he can't without doing the usual derailing and taking the thread on a tangent...0 -
HAMISH_MCTAVISH wrote: »If base rates are the same in both, why have prices fallen so much more in NI than the mainland UK?
Obviously it ain't the base rates.....Graham_Devon wrote: »Many reasons. Which was the whole point of what I said.
Could you please tell me what you think these many reasons are?Murphy was an optimist!!!0 -
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Graham_Devon wrote: »Hamish has already outlined most of them.
Though he appears to have ignored them for his straight interest rate comparison.
Then accused me of ignoring them.
You should outline them again with an explanation after each to prove your point. That is the way to win the argument. Destroy the debt junkie's Graham_Devon. Destroy them all.0 -
HAMISH_MCTAVISH wrote: »I want to see a prosperous Britain, with lower unemployment, a better economy, and a strengthening recovery.
We won't get that if we raise rates prematurely.
Before either you have paid off your mortgage, or HPI is back again ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Graham_Devon wrote: »Many reasons. Which was the whole point of what I said.
Now, Hamish, are you telling me, higher base rates, of say 4% wouldn't see house prices fall?
Will you go on record and state that?
If the wider economy could survive base rates of 4%, the housing market most certainly could. After all, most people paid their mortgages just fine when rates were at nearly 6% just a few years ago, and 97% of those in work then are still in work now.
But....
Instantly raising base rates to 4% today would absolutely crash the wider economy. So house prices could then fall as a consequence of a wider recession.
Base rates gradually put up over a few years once the economy has recovered properly, would be fine for both the economy and housing market.
None of which is terribly relevant to your theory on Northern Ireland though. After all, they have low base rates identical to ours, yet have still crashed much harder and faster.
Why don't you just admit reality?
Northern Ireland had a massive speculative bubble, without any fundamentals underpinning their price rises.
The mainland UK has a massive housing shortage, and that's primarily what drove up prices with just a tiny bit of froth on top at the very peak.
Which is why prices have fallen very little here, but massively there, despite having identical monetary policy....
Low base rates cannot prop up a speculative bubble.... It didn't work in NI, it didn't work in the USA, it didn't work in the ROI. So if UK house prices are still high after you remove 70% of funding, and after you drop base rates almost to Zero, the only logical conclusion is that it wasn't a bubble to begin with.
“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 -
Before either you have paid off your mortgage, or HPI is back again ?
House prices up here are rising anyway and selling for more than they did in 2007 so it makes little difference to me.
As for rates, we're now so far ahead financially thanks to the last few years of once-in-a-lifetime opportunity for mortgage holders, I can't really complain if rates rise.
So no, it makes little difference to me personally.
What matters far more is the wider economy.....
No rational person wants to see a return to recession, rising unemployment, increased business failures, insolvencies, etc. And raising rates prematurely would do exactly that.“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: »
Low base rates cannot prop up a speculative bubble.... It didn't work in NI, it didn't work in the USA, it didn't work in the ROI. So if UK house prices are still high after you remove 70% of funding, and after you drop base rates almost to Zero, the only logical conclusion is that it wasn't a bubble to begin with.
You simply cannot compare the US to here. Not diresctly on interest rates.
Their benefit and support system is wildly different to ours. Our benefit system is a massive underpin to the housing market value. Remove those benefits, and you would see rents and house prices plunge. I doubt you would argue with me here.
While this isn't going to be removed here, as it would be insane to do so, it cannot be ignored. It's underpinning rentals, it's keeping landlords above water, and therefore underpinning house prices.
Add to that SMI, and we have another benefit underpinning house prices, making sure people don't actually have to face selling something they cannot actually afford.
Add to that actually bailing out banks, and government interference on market conditions (halt reposessions in return for government cash etc) and the whole market is different. Not sure if Ireland had these "incentives", but it seems not, as their repo figures are higher.
The US is completely different when it comes to repo's. People simply walk away.
I find your "it wasn't a bubble" a little weird, especially as your basis is the differnces in the US, Ireland and here, as you have ignored everything and anything which has a large impact on the housing market.
Thankyou for answering my question though. The one where you believe house prices would not fall as a result of interest rates rising. My problem is that interest rate rises apply much higher pressure to all of the above. From the landlord underpinned by LHA rents (which are not likely to increase), to those on SMI (which is not likely to increase) to those already in arrears and just about holding out from reposession.
It's this reason the BO has abolished it's inflation target. There is no point pretending otherwise. Putting rates up would see all those people suffer, and a lot more fall over.
Sure, many were wrong, interest rate rises now look a long way off after the whole mandate of the BOE has somewhat changed, much to the disgust of some, and indeed, even some high flyers, stating this is meddling gone too far at the cost of the current and next generation.
There is some pretty serious underpinning going on in the UK right now. So much so, the entire BOE mandate has been changed, and their main remit, changed, to keep the status quo.
I highly doubt we will see any changes to the LHA system which were talked about. Reason being, any minute change has a large impact. We are just about keeping our heads above water....how long the underpinning can actually hold up is anyones guess.
Personally, I believe we have just delayed the inevitable. May be delayed a few years. may be delayed a decade. But what cannot be argued is that it's been delayed. Meanwhile, with all of the above, we can't even swim to shore. All we can do is just about hold our head above water, while slowly sinking (house prices are not rising, they are volitile at best).
Not a bubble? I'd disagree. What I would agree with is an absolute blinder to mask the issues has been played, and continues to be played. There is no end to what will be done to keep property prices up. That, is what you, yourself are reliant on. But don't believe we are invincible. While the rest of the world recovers and starts building again, the UK will still be applying sticky plasters to their wounds, desperately trying to run before they can even hobble.
You should just be grateful our entire system forces people to stay stuck in their situation. If we had the same rules and regs as the US, house prices would have tanked by now as people just give the keys back and walk away. The fact that people can't, and the fact that the banks are unwilling to posess, because they are largely owned by us....which means if they go down, we all go down, is the only thing keeping this whole sorry state of affairs going.0
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