wages to house prices ratios

lypsey

This is what you are after

http://www.in2perspective.com/nr/stats/house-price-to-earnings-ratio.jsp

My 3 year old could tell you what is going to happen after the 3rd peak.... yes thats right a return to the mean and that is a house price crash

tonydee

I've seen that link somewhere else

Lypsey can we assume that you've sold, currently in rented and hoping for this crash so you can buy back in?

Pobby

lypsey wrote:

This is what you are after

http://www.in2perspective.com/nr/stats/house-price-to-earnings-ratio.jsp

My 3 year old could tell you what is going to happen after the 3rd peak.... yes thats right a return to the mean and that is a house price crash

Well of course you are correct.The graph says it all.The whole housing issue has become a matter of emotion rather than one of hard facts.This boom is rather more difficult to fathom out.New factors have come in to play .Weird and wonderful products from the lenders !!6x ratios,special fixed deals} distort the the real cost of borrowing.Now throw in the naive buy-to-let brigade ,singing their mantra of property only ever goes up, taking on stupid amount of risk on I/O mortgages.Clearly some of these landlords are already subsidising their tenants.

Talking of rental returns,why would I want to invest in property whilst 3 rented,plated hackney taxis can give me a mouth watering 25% yield on investment.Property isn`t the only form of investment.

Just what will happen I don`t know but over history property has always returned to the mean and that is where it will be heading at some point.

StevieJ

lypsey wrote:

This is what you are after

http://www.in2perspective.com/nr/stats/house-price-to-earnings-ratio.jsp

My 3 year old could tell you what is going to happen after the 3rd peak.... yes thats right a return to the mean and that is a house price crash

Surely it depends on affordability, on the 2nd peak interest rates were 13-15% now they are 5.25%.

WesternExpress

Mind you wage inflation was also much higher in the past.

ManAtHome

StevieJ wrote:

Surely it depends on affordability, on the 2nd peak interest rates were 13-15% now they are 5.25%.

Mind you according to the "experts" they've already "peaked" at 4.5, 4.75, 5.0, and 5.25 in the last year - next peak 5.5% anyone?

roswell

The experts know the same as anyone else they guess guess guess again and eventualy realise that what ever is going to happen will happen and when is when ever its ready.

movieman

I was just looking at house ads around where I'm moving to in Canada. For the price of a crappy flat in a terraced house surrounded by chavs near where I currently live in the UK, you could have your choice of:

1. A four-bed detached house with a third of an acre for a garden and a scenic view of a lake.

2. A three-bed detached house with eighty acres of land.

3. A big four-bed detached house with sixteen acres of land.

And even relative to 'average' local wages, the multiples wouldn't be much worse.

Four bed house with sixteen acres of land, or tiny flat with a small front garden that the chavs fornicate and vomit in. Does make you think a bit.

ManAtHome

Supply and Demand - fornicating chavs (big brother) gets a bigger audience than Bullwinkle...

talksalot81

Where are you moving movieman?

I would frequent Alberta and they are having a massive boom of their own. It is probably comparable to the UK in general. The point which needs to be remembered of course is that Alberta has incredible money. Any Joe off the streets can go and earn themselves the equivalent of £30k in the oil fields just for a bit of hard labour - no real skills required.