Ladders can be dangerous, especially housing ladders

julieq

Peakoil, you're in the ideal situation there (I was going to say "Position A" but under the circumstances that's a little too much of a double entendre).

Make your views known, concede graciously anyway, and you either have a sound decision to celebrate, or a lifetime of "I told you dear" opportunity.

abaxas

What gets me is the 'bears' tend to understand financial matters, when the bulls dont.

The housing latter has always (and will always be) been wage inflation. Without that, it's a snake.

julieq

The odd thing about that assessment abaxas is that the "bears" tend not to interpret statistics accurately (for example Macaque's risible attempt to understand the effects of price falls) and their conclusions are not borne out by what actually happens.

The key point you're missing is the shortfall between homebuilding and household creation. Until that's sorted out, prices will rise with or without general wage inflation. The housing stock ends up concentrated in the hands of fewer and fewer people proportionately and they can afford higher prices because they're higher earners. You can get effective wage inflation without actual wage inflation by excluding lower earners.

abaxas

julieq wrote: »

The odd thing about that assessment abaxas is that the "bears" tend not to interpret statistics accurately (for example Macaque's risible attempt to understand the effects of price falls) and their conclusions are not borne out by what actually happens.

The key point you're missing is the shortfall between homebuilding and household creation. Until that's sorted out, prices will rise with or without general wage inflation. The housing stock ends up concentrated in the hands of fewer and fewer people proportionately and they can afford higher prices because they're higher earners. You can get effective wage inflation without actual wage inflation by excluding lower earners.

We do not have accurate figures on household formation and destruction. Hence no-one actually knows.

Also it's what 'value' is relative to, that counts the most. Your home can increase by 400%, but that is no good if everything else has gone up by 1000%.

Interesting few years ahead of us :P

julieq

Errrr, we do have accurate figures. The ONS keeps them. And anyway prices are being sustained despite mortgage rationing, and rents are going up. That ought to tell you something.

And your second statement is just wild and nonsensical. What's your point exactly?

geneer

julieq wrote: »

Errrr, we do have accurate figures. The ONS keeps them. And anyway prices are being sustained despite mortgage rationing, and rents are going up.

Except in the places where they are falling.
Or where it turns out that they've increased just 2% in 3 years.

abaxas

julieq wrote: »

Errrr, we do have accurate figures. The ONS keeps them. And anyway prices are being sustained despite mortgage rationing, and rents are going up. That ought to tell you something.

And your second statement is just wild and nonsensical. What's your point exactly?

No they dont.

They only track household formation, there is no data for 'households' where the people change all the time. Eg student lets, foreign students etc.

Also the housing building figures do not include conversion.

The figures are a guide, not a fact.

abaxas

julieq wrote: »

And your second statement is just wild and nonsensical. What's your point exactly?

My point is.

Take Q3 2002 house prices.

To us brits... they are now up 50%.
To a german (in euro terms)... they are exactly the same.

So if you are a German who is moving to the UK, house prices have not changed since 2002 (9 years).

With any valuation, you need to see what it is relative to. Not the pure number.

Another good example of this is buying a 2nd hand car.

Eg I didnt lose any money, I bought it for £3000 then sold it 2 years later for £3000. the £3000 now has less value than the £3000 2 years ago.

This is something lost of most people, your house may have doubled in £ value. But actually it could be worthless.

It is ALL relative.

HAMISH_MCTAVISH

abaxas wrote: »

No they dont.

They only track household formation, there is no data for 'households' where the people change all the time. Eg student lets, foreign students etc.

Also the housing building figures do not include conversion.

The figures are a guide, not a fact.

Sane person--- We're short somewhere around 150,000 houses a year.

Abaxas/geneer/Graham etc--- Well we don't know precisely, it might only be 149,000 a year. Or even 148,000 a year. Nobody knows exactly how many we're short. A few thousand college kids probably moved back in with their parents. And a cold winter might kill off a few hundred extra old people. And some foreigners might go home. Or move in with mates. Hell, that shortage could only be 147,000 by the time we're done obfuscating the issues.

Sane person--- Alrighty then.....

tartanterra

abaxas wrote: »

What gets me is the 'bears' tend to understand financial matters, when the bulls dont.

I beg to differ.

This forum is all about debate, and in general most of the posters do debate. i.e.:
"What effect will low interest rates/immigration/recession/lack of new build have on the housing market?"

This isn't the case with the most of the uber bears on here, who always seem to debate (rant?) from the same point of view. i.e.:
"I can't afford a house, so house prices must drop"

Thinking that the world revolves around your own particularly tragic circumstances doesn't really come under the heading of "understanding financial matters" does it?

Disclaimer: I'm not talking about Geneer in particular, just in general.:D