House prices need to drop 40% to be affordable discussion

MrRee_2

It ain't happening people ..... forget all about 40% falls ............

AliceJenkins

Maybe people just need to work harder?

sheffield_lad

A lack of house building which leaves a shortage of houses (particually 3/4bed) = prices not going down by anywhere near 40% lol but if your renting I guess it's nice to have a dream.

IveSeenTheLight

Jimmy_31 wrote: »

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

Very interesting. Your the forst poster in this thread to share their thoughts that they predict a 40% reduction.

Can I assume you mean nominal or are you referring to in real terms?

I was wondering if you could consider the following questions in relation to a 40% drop: -

What do you think needs to happen to ensure that house prices do drop 40%? and do you think that is likely?

If prices were to drop 40%, how do you think that would impact current home owners (on average)?

What is the likely outcome for any government that oversee a 40% reduction in property prices?

Jimmy_31

IveSeenTheLight wrote: »

Very interesting. Your the forst poster in this thread to share their thoughts that they predict a 40% reduction.

Can I assume you mean nominal or are you referring to in real terms?

I was wondering if you could consider the following questions in relation to a 40% drop: -

What do you think needs to happen to ensure that house prices do drop 40%? and do you think that is likely?

If prices were to drop 40%, how do you think that would impact current home owners (on average)?

What is the likely outcome for any government that oversee a 40% reduction in property prices?

No work available in an area pushes house prices down, highly unlikely that somebody who isnt from this area, but is able to buy would rush in and buy a house around here due to it being a very rough area.

If house prices dropped by 40% everywhere then lots of people will lose their homes, repos are coming onto the market more and more around here.

The government will walk away smiling as usual.

IveSeenTheLight

Jimmy_31 wrote: »

No work available in an area pushes house prices down, highly unlikely that somebody who isnt from this area, but is able to buy would rush in and buy a house around here due to it being a very rough area.

So, unemployment you believe will be the catalyst to drive prices down by 40%.
I would consider if employment was so bad that prices dropped 40%, it would cause real concern over the market and transactions would drop off to a record low.

Would you buy in a market where unemployment was so high and prices had dropped so far?

Jimmy_31 wrote: »

If house prices dropped by 40% everywhere then lots of people will lose their homes, repos are coming onto the market more and more around here.

Who would be the buyers?
You've painted a scenario where I wonder who would buy up these 40% reduced properties.
Surely the lenders would only reposess if they believe they could recoup the outstanding mortgage.
It would seem that if this was the scenario, there would be more intervention to ensure that people weren't reposessed and that mortgages were being paid.

Jimmy_31 wrote: »

The government will walk away smiling as usual.

Quite probably, however the government know that leaving the scene having caused this devistation, would quite likely mean they would not get back into power for a generation or two.
Which is why governments will do whatever they can to ensure that this is negated.

Jimmy_31

IveSeenTheLight wrote: »

So, unemployment you believe will be the catalyst to drive prices down by 40%.
I would consider if employment was so bad that prices dropped 40%, it would cause real concern over the market and transactions would drop off to a record low.

Would you buy in a market where unemployment was so high and prices had dropped so far?



Who would be the buyers?
You've painted a scenario where I wonder who would buy up these 40% reduced properties.
Surely the lenders would only reposess if they believe they could recoup the outstanding mortgage.
It would seem that if this was the scenario, there would be more intervention to ensure that people weren't reposessed and that mortgages were being paid.



Quite probably, however the government know that leaving the scene having caused this devistation, would quite likely mean they would not get back into power for a generation or two.
Which is why governments will do whatever they can to ensure that this is negated.

The people who would buy the reduced houses would be the people who looked at house prices during the boom and thought there aint a chance im paying that for a little 2 bed mid terrace.

They went away and saved as much as they possibly could because they knew at some point in the future house prices would drop by a lot (depending on area).

I know a few people and some couples who did this just as i did and once the house prices around here reach a level they are happy with then they will buy.

Yes i would buy whilst unemployment is high and prices are low. house prices dropping by a large amount and the fact that im getting closer all the time to not needing a mortgage because my deposit is increasing most of the time is the reason i would buy

RenovationMan

Mallotum_X wrote: »

Dont be silly, house prices only every go up, so you sell it and use the proceeds to pay off the mortgage and then buy a couple more houses with the spare cash of course!

If you have a family home on interest only then it's quite feasible to downsize from that and use the released equity to buy a smaller retirement home. Indeed this forms part of my own retirement plan.

IveSeenTheLight

Jimmy_31 wrote: »

The people who would buy the reduced houses would be the people who looked at house prices during the boom and thought there aint a chance im paying that for a little 2 bed mid terrace.

They went away and saved as much as they possibly could because they knew at some point in the future house prices would drop by a lot (depending on area).

I know a few people and some couples who did this just as i did and once the house prices around here reach a level they are happy with then they will buy.

Yes i would buy whilst unemployment is high and prices are low. house prices dropping by a large amount and the fact that im getting closer all the time to not needing a mortgage because my deposit is increasing most of the time is the reason i would buy

So in summary, you believe you (and sufficient others) would be immune to redundancies in an environment where high unemployment drives prices to reduce by 40%

crash123

IveSeenTheLight wrote: »

So in summary, you believe you (and sufficient others) would be immune to redundancies in an environment where high unemployment drives prices to reduce by 40%

There are always winners and losers in a recession.