Take cover! The housing market is heading for a bloody and protracted crash!

JonnyBravo

vivatifosi wrote: »

This v doesn't have the foggiest Jonny. Which V were you thinking of?

V for Vendetta

sorry viva. Wrong v there

HAMISH_MCTAVISH

Bigdeflationfirst wrote: »

All those who said 50% real term falls are now looking more like being right all along.

Interesting.

I don't recall many bears saying....

"House prices will remain this expensive AND the cost of everything else will rise 50% so they'll be even less affordable than they are today"

I just recall a lot of muppets claiming prices would fall 50% and they'll be able to buy a house cheap.

ukcarper

Bigdeflationfirst wrote: »

It wont make much, but who thinks the falls will be that small?

All those who said 50% real term falls are now looking more like being right all along.

You can see where the 70% club were coming from but those of us who have always been in the 50% club will be the ones who were the nearest.

This house price crash will be a 50% real term crash from top to bottom and we are about half way through.

Can you explain how real term falls will make it easier to save deposit especially if wages are rising lower than inflation.

StevieJ

Bigdeflationfirst wrote: »

All those who said 50% real term falls are now looking more like being right all along.
.

Who was that then? from my memory it was all 50-70% nominal falls that were being predicted, that right Brit/Dev?

Graham_Devon

ukcarper wrote: »

So what you are saying is that houses are unaffordable because you can’t save the deposit not because the mortgage payments are too high which is true. Someone wanting an 80% mortgage at 4x salary on an average property would need to be earning £32.6k if that property dropped 10% £29.3k the deposit would reduce from £32.6k to £29.3k. So in theory that house would be available to people earning less but would the person earning £29.3k be able to save the £29.3k deposit any easier than the person earning £32.6k would be able to save the £32.6k. I would imagine no so even with a 10% drop the property would be unaffordable.

Firstly, why stop at 10%?

Secondly, "it may not make much difference". No. But it does make A difference. There is no way of getting around that.

Anything that's difficult to afford reducing in price is now easier to afford. That's common sense.

Plus, it's not just the initial costs, it's the mortgage per month which reduces, the interest over the term which reduces. It's all more affordable.

A 10% drop in price is a significant amount. A significant amount which you appear to be trying to suggest is insignificant.

ukcarper

Graham_Devon wrote: »

Firstly, why stop at 10%?

Secondly, "it may not make much difference". No. But it does make A difference. There is no way of getting around that.

Anything that's difficult to afford reducing in price is now easier to afford. That's common sense.

Plus, it's not just the initial costs, it's the mortgage per month which reduces, the interest over the term which reduces. It's all more affordable.

A 10% drop in price is a significant amount. A significant amount which you appear to be trying to suggest is insignificant.

I'm not saying its insignificant just that the level of the deposit still puts the property out of reach of most people and that prices falling will necessarily make it easier to buy.

Graham_Devon

ukcarper wrote: »

I'm not saying its insignificant just that the level of the deposit still puts the property out of reach of most people and that prices falling will necessarily make it easier to buy.

That's because it's vastly overpriced.

Interest rates at 0.5%, QE, stringent forebearance, SMI, government incentives to buy etc....and all prices can do is stagnate and fall slightly YOY?

Yup, still overpriced.

ukcarper

Graham_Devon wrote: »

That's because it's vastly overpriced.

Interest rates at 0.5%, QE, stringent forebearance, SMI, government incentives to buy etc....and all prices can do is stagnate and fall slightly YOY?

Yup, still overpriced.

What do you call vastly overpriced although I agree they are overpriced I would not say vastly and that even with mortgages at pre boom earning multiples a lot of people would still be able to buy if they had the deposit.

Graham_Devon

ukcarper wrote: »

What do you call vastly overpriced although I agree they are overpriced I would not say vastly and that even with mortgages at pre boom earning multiples a lot of people would still be able to buy if they had the deposit.

Will all depend on graphical locations.

Obviously some areas won't be "vastly overpriced", which is of course a measure by my own measuring stick.

When a couple, both working full time cannot afford a property without taking on 100%+ mortgages, I believe they are vastly overpriced.

Thrugelmir

ukcarper wrote: »

Can you explain how real term falls will make it easier to save deposit especially if wages are rising lower than inflation.

Everybody's inflation rate is different. Saving for something is a mindset. Those that make sacrifices will achieve their goal.