House prices need to drop 40% to be affordable discussion

IveSeenTheLight

Graham_Devon wrote: »

Oh ok.

So who are you asking then?

Who are these other posters that said 40%? You like direct answers remember

All very well inviting "these people". But who are they?

I refer you to post 1

IveSeenTheLight wrote: »

There are some that believe there needs to be a 40% reduction in house prices in order for the single average person would then be able to afford property.

I would appreciate anyone who has an on topic point to add to this discussion.

I'm also interested in their viewpoint on the following queries.

If you have any points (not just to my specific questions, but that would be nice) that relate to how much property would need to reduce by to be affordable to the "average person" it would be appreciated.

If you don't, then please do not derail the thread off topic.

ukcarper

Can we try and keep this thread on topic and not discuss people motives for posting or get into the bickering seen on a lot of other threads. If people don’t want to say if and why they think property should drop 40% or any other figure for that matter they don’t have to post and the thread will die. I’m sure I’m not the only one getting feed up with all the bickering and attempted point scoring that is spoiling a lot of threads.

Zoran_Ilievski

40% is also the figure the Aussie property bears use.

Don't know where they get 40% from, but the figure is legendary...

Steve Keen is the man who started it all, see below...

Steve Keen Says Property to fall 40%

House prices in the UK already fell 20% didn't they?

IveSeenTheLight

Zoran_Ilievski wrote: »

House prices in the UK already fell 20% didn't they?

IIRC they did drop very close to 20% (19% something) but then recovered.

Currently I believe they are circa 13% below the peak.

It's interesting that the correction of 2008 reduced prices both nominally and as a percentage value than the correction of the 90's.

What I would like to consider from my Original Post is regards to achieving a 40% drop nominally from today's figures.

Personally, I don't think it is likely, but hopefully we might get some stimulus as to how is the best way to achieve lower prices.

crash123

There are 2 options for lower prices.
1. A big correction like 2008 or
2. A slow grind where price decline slowly and wages gradually increase.
Neither way would worry me.

geneer

Rinoa wrote: »

You may remember the original discussion was repeatedly taken off topic by your persistent trolling. That's why Light started this new topic specifically asking for 'on topic points'

You mean this "original discussion".
https://forums.moneysavingexpert.com/discussion/comment/47813507#Comment_47813507
As I also recall Light was also involved it that discussion too. Indeed as I recall he in fact initiated it.

So your assertion is of course false.
And your honest open to question.

IveSeenTheLight

crash123 wrote: »

There are 2 options for lower prices.
1. A big correction like 2008 or
2. A slow grind where price decline slowly and wages gradually increase.
Neither way would worry me.

For your two options, how much of a correction are you referring to?

If you are referring to a similar circa 20% reduction, how likely do you think this will happen?

Can you foresee a 40% reduction?

Jimmy_31

IveSeenTheLight wrote: »

For your two options, how much of a correction are you referring to?

If you are referring to a similar circa 20% reduction, how likely do you think this will happen?

Can you foresee a 40% reduction?

I can see a 40% reduction coming, or crash as hamish calls it.

crash123

IveSeenTheLight wrote: »

For your two options, how much of a correction are you referring to?

If you are referring to a similar circa 20% reduction, how likely do you think this will happen?

Can you foresee a 40% reduction?

Yes I think a 20 - 30% reduction could happen. I just think there is too much debt in the system. This sucker has not run its course yet. Its a marathon and we haven`t got very far yet.

But as I said it dose not matter to me as I have no mortgage and all my partners commercial property is paid for. I do look at the local auctions/ repos and there have been some good buys but not quite good enough for me or him indoors.

Emy1501

Think the 40% tends to come from 3.5 times average wage based on peak prices. Unreasonable for me as most people buy as couple now and the average joint wage is probably about 45k.

For me I suspect prices are affordable in some areas an unaffordable in others. In general they are unaffordable and you only have to look at approvals and the fact that most FTB's borrow mum and dad to get a deposit to see this.

The problem in the UK is personal debt and peoples lack of ability to save and this is not going to improve anytime soon.

Who knows what the future holds but prices falling by 10-20% isn't impossible especially when we know another recession is a real possibility. Suspect though inflation and prices continuing to fall in real terms over next 5 years or so is most likely