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Real Vs Nominal - Lets Nail It
Comments
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In 2005 when the HPC website really kicked in there were pronouncements about how much house prices would fall and, correct me if I am wrong, there were forecasts of around 50% which many thought realistic.
What is this HPC website of which you talk?
It's been around since 2005 you say - how come you've never brought it to our attention before?0 -
Around 2005, you would have been laughed at by many of the more bullish types. I'm obviously bearish, and predicted 25 - 35% falls, but would have probably agreed with you that in 6 years time, prices would be about the same (maybe a little lower, if I'm honest).
Anyway, it's getting tiring, all this "I was right, you were wrong" business. The fact is that I don't recall many people predicting a credit crunch, followed buy massive government intervention. I felt that things were going to go pear shaped in the near future, and said to more than 1 person "the money will run out". One of my mates laughed at me when I said that. This wasn't me being an economic genius or anything, it was just good old fashioned common sense. Instead of bathing in the glow of high HPI and ever higher borrowing, I looked at some of the people around me, listened to and read the news, and thought "this will have to stop".
I also thought -35%. I predicted that house prices would initially drop of a cliff, before years of grinding falls (real and nominal).
Which doesn't seem that shabby.
I would say that the credit crunch was indeed predicted on HPC, and other sites.0 -
HAMISH_MCTAVISH wrote: »It obviously isn't.
"Real terms falls" are a desperate fall-back position for argumentative housing bears when they realise the game is up and they've lost the debate.
Because if the bulk of a correction is through inflation adjustment, you might as well go ahead and buy.
I don't know Hamish. I would have thought "desperate fall-back position" would be a more accurate description for the efforts of those forced to fabricate ever more elaborate arguments to make up for the argument that they decisively lost.
For example....HAMISH_MCTAVISH wrote: »Even putting aside all the low lifetime trackers that were around pre-crash, had you walked into any high street branch of major lenders such as Nationwide or Lloyds TSB you could have had a 100% LTV mortgage at base + 0.5% for 2 years, reverting to base plus 2% for life. And a great many people do.
Assuming a purchase at absolute peak in Q3 2007, the numbers work out roughly as follows:
200K mortgage.
After 4 years 25K of the capital has been repaid, 175K remaining.
After 5 years 32K of the capital has been repaid, 168K remaining.
The mortgage payments in total, capital and interest, would have been equivalent to a rental yield of 5.3%,which is pretty much bang on the national average.
The property value today, based on the Nationwide average, would be 180K.
So for those on a typical variable rate mortgage in 2007, and assuming average falls from peak and average rents, it is now cheaper to have bought at absolute peak, even with a 100% mortgage, than to have rented the same property since.
This is why time is the enemy of housing bears.:cool:
Fall back position. Its obvious. Isn't it.
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:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
Ah, I see. I was a bull all along.
I think not.
We wouldn't know as you only joined last year
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Not really the same as supporting your assertions with evidence though eh?
Who was your previous AE then? BTW I thought I had supplied evidence earlier n the thread.Originally Posted by StevieJ
I said they would fall by 20% and bottom in the spring of 2009, some may say optimistic, not for me to comment, to paraphrase the baddie in a famous poitical series
https://forums.moneysavingexpert.com/discussion/comment/20270621#Comment_20270621'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Here is another "bull"
http://forums.moneysavingexpert.com/showpost.php?p=16231889&postcount=60
2008I think around 30%, it could be 40% just not by the middle of June 09.
Is it wrong to disagree when all pointers are saying they won't fall to that in the time frame the OP says?
early 2010 cant see earlier quote without doing a big search
http://forums.moneysavingexpert.com/showpost.php?p=28605801&postcount=72I have said prices will remain fairly stagnant anyway, future falls may only come in real terms.
But there is no doubt just a short shift in demand seems to effect prices in the UK, I think 09 kind of proved that.
I think over the next couple of years we will get a real feeling of if we have a housing shortage or not.
My bet is we have a shortage in most areas around big towns (jobs)
The problem is the slow growth will mean building may well stay below demand also.
We could have the seeds for the next bubble sown before we are back to any meaningful growth. 0 -
"You don't know your born" etc.
Actually, it's a serious point, that the current generation have a massively different attitude to their personal finances than they would have done a few decades ago. I'm all for progress and entrepreneurial spirit, but things went too far in recent times in my opinion. Those that complain about 10% deposits etc are asking for those times to return. Had we not played fast and loose with our lending, it's arguable that 10% deposit requirements would not be a problem for the FTBers of today (well, no more of a problem than it was to myself or my parents).
I bought my first flat in the 90s for £70k, when I was 20. I was earning £23k pa and the 10% deposit was £7k. I remember saving up for about 5 or 6 months.
Fast forward to today and the same 20 year old Bullfighter would have to pay £180k for the same flat. He would have to find £18k in cold hard cash for the deposit and would need to be on a salary of £53k.
The few 20 year olds that I know are earning no more than I was in the 90's.0 -
Who was your previous AE then? BTW I thought I had supplied evidence earlier n the thread.
https://forums.moneysavingexpert.com/discussion/comment/20270621#Comment_20270621I think the Bullish position (on here) generally changed to a position of predicting 20-30% falls
You appear to be confused. You seem to have provided evidence of you claiming 20% falls. I am unsure how a single poster can be said to reflect "the bullish position.
Incidentally, 20 to 30% is not a bullish position. Its really really not.
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