has the housing market done this before somewhere else?

mrbrown

Hello. Is there somewhere else in the world where the housing market has got so expensive that noone can afford to buy? Everyone talks theoretically about FTBs may never get the chance to buy anywhere again, but is there any evidence that this has happened elswhere in the world? Just a thought.... I wander what the ultimate outcome could be (100 year mortgages etc...).
FYI: I am an FTB myself, or atleast would like to be!!!!

EdInvestor

Years ago there was a massive property bubble in Japan and they ended up with three generation mortgages. Eventually it crashed of course.

But it was much much worse than here - at one point the Imperial Palace in the centre of Tokyo was supposedly worth more than all the property in California. :eek:

The Palace does have quite big grounds, but not quite that big

nogginthenog

In the rest of the world people do not really buy houses! exept maybe the USA and OZ it seems to be a obsession with brits for some reason.

barnaby-bear

mrbrown wrote:

Hello. Is there somewhere else in the world where the housing market has got so expensive that noone can afford to buy? Everyone talks theoretically about FTBs may never get the chance to buy anywhere again, but is there any evidence that this has happened elswhere in the world? Just a thought.... I wander what the ultimate outcome could be (100 year mortgages etc...).
FYI: I am an FTB myself, or atleast would like to be!!!!

I think there are lots of examples, contemporary and historical where the distribution of property has meant your average FTB can't buy property and rents. People are housed just can't buy their own. Think tenant workers on victorian estates, mine/factory owners etc. Except now it's amatuer BTL-man rather than t'mill owner.

Relatively our market is income/cost cheap compared to many and credit is loose and cheap.

barnaby-bear

nogginthenog wrote:

In the rest of the world people do not really buy houses! exept maybe the USA and OZ it seems to be a obsession with brits for some reason.

People say this but fail to qualify that elsewhere people don't have the choice and especially in continental europe private renting (social housing is impossible in my area unless you have the largest range of problems going) is not substandard - landlords are professional investment companies like pension funds, stuff gets fixed, you can decorate etc, and you have security of TENURE. People are obsessed with owning because if they rent privately it is the only route to tenure longer than 6 months and people want homes and stability.

barnaby-bear

mrbrown wrote:

Everyone talks theoretically about FTBs may never get the chance to buy anywhere again,

You may not get the chance to buy, but you may well get the chance to rent the house you would have bought off your local buy-to-let hobby landlord, but only for 6 months and after that he'll switch you to 2 months notice.

nogginthenog

People want to buy and do buy houses in the uk even when it is obviously the wrong option,granted it is the right decision for some people but for many it is nothing more than a designer label, and yes we do have a choice.

barnaby-bear

nogginthenog wrote:

People want to buy and do buy houses in the uk even when it is obviously the wrong option,granted it is the right decision for some people but for many it is nothing more than a designer label, and yes we do have a choice.

I want to be able to stay in the same home for longer than 6 months so what choice? We both work so are ineligible for social landlord rental. If we stopped paying the mortgage tomorrow it would be 9 months before evicted, our rolling AST gave us 2 months of tenure. Houses should be homes not investment vehicles and a huge problem is the lack of tenure and security and stake in society young FTBers face.

devils_advocate

There is a product which is far, far more extreme than the 30 year, 3 generation or even 100 year mortgage. It's the everlasting or perpertual mortgage! It will never end!

It's called the interest only mortgage. So when someone tell you that the the property bubble in Japan was so bad they had to introduce 3 generation morgages, tell them that we've already gone past that point!

nogginthenog

When you are a young boy or girl, weather you want buy or rent your property is one of the most life changing decisions you will ever make and will shape and effect most peoples decisions and lives for the rest of time, even to the point of how they vote and who there friends are!
And one more point,people make there decision when they decide how to spend there wages when they start working,living with parents there is no reason people on the min wage cant save £80 per week from the age of 16.
If people want to booze £100 per week and want to take out a loan for a new car at 17 dont go blameing other people if you cant afford a deposit for a house at 30.
And some people go on council housing lists from a early age.

Generali

mrbrown wrote:

Hello. Is there somewhere else in the world where the housing market has got so expensive that noone can afford to buy? Everyone talks theoretically about FTBs may never get the chance to buy anywhere again, but is there any evidence that this has happened elswhere in the world? Just a thought.... I wander what the ultimate outcome could be (100 year mortgages etc...).
FYI: I am an FTB myself, or atleast would like to be!!!!

Housing has risen dramatically in price in much of the world over the past 10 years. In Australia and New Zealand, FTBs are being driven out of the market, in France and Spain prices have doubled and in the US prices have risen rapidly (and are now dropping quite quickly too). There was an article in The Economist about a year ago that claimed that house prices in the past few years had doubled or more in markets from Botswana to the Faroe Islands, driven by cheap and available credit.