Altered reality

macaque_2

When the widely respected 70% club posts information bulletins alerting people to the prospect of big price falls, the bulls get very excited and out come the old favourites; tin foil hats, jealousy, bitterness, cluelessness etc. This is then reinforced with a torrent of imaginative posts such as: 'I've just whacked up the rents by 15%' or 'I feel so lucky, my house has gone up by 25% in just 4 weeks'. Remarkably, no bull on this forum has ever had a rent void, a reduction in asking price, or a loss on the sale of a house.

For bulls, the idea that a £500k house today could be worth £150k in a few years time just does not compute. Its like trying to explain quantum theory to a door knob. If you try to point out that the same property was only worth £150k a few short years ago, the response is 'Thats different, houses only go up'

The only way to get the message across is by example. Here is a prime city centre property (3280 square feet) in Dublin which is on the market at an 86% discount.

AT THE peak of the boom, Chicago Spire developer Garrett Kelleher asked €4m for a Dublin city-centre penthouse pad. Now a receiver is willing to sell it for €575,000.

http://www.independent.ie/business/personal-finance/property-mortgages/knockdown-4m-dublin-city-centre-penthouse-now-on-sale-with-86pc-discount-at-575k-3070132.html

JonnyBravo

macaque wrote: »

When the widely respected 70% club posts information bulletins alerting people to the prospect of big price falls, the bulls get very excited and out come the old favourites; tin foil hats, jealousy, bitterness, cluelessness etc. This is then reinforced with a torrent of imaginative posts such as: 'I've just whacked up the rents by 15%' or 'I feel so lucky, my house has gone up by 25% in just 4 weeks'. Remarkably, no bull on this forum has ever had a rent void, a reduction in asking price, or a loss on the sale of a house.

For bulls, the idea that a £500k house today could be worth £150k in a few years time just does not compute. Its like trying to explain quantum theory to a door knob. If you try to point out that the same property was only worth £150k a few short years ago, the response is 'Thats different, houses only go up'

Do I count as one of the bulls?

macaque_2

JonnyBravo wrote: »

Do I count as one of the bulls?

I know what this about and I cannot overrule the membership committee. In their view the ear tag and large ring in your nose raised serious questions about your suitability for membership.

JonnyBravo

Super.
Well in that case I'd just like to invalidate your OP.

I'm a landlord, as you well know, and I'm currently 2 weeks through a 6 week rental void.

How on earth can anyone trust a word you say monkeyboy?

System

JonnyBravo wrote: »

I'm a landlord, as you well know, and I'm currently 2 weeks through a 6 week rental void.

Yeah right, then how on earth can you afford a PC to post with, let alone the electric. We all know you'd be bankrupt after 2 weeks.

HAMISH_MCTAVISH

Joeskeppi wrote: »

We all know you'd be bankrupt after 2 weeks.

Can't you just smell the desperation?

nearlynew

I sold a house in 1998 for £59k.
But that wasn't what it was worth.

No, in 2007 it sold for £160k.
That is what I should have sold it for in 1998.


Peak price is the right price.

Loughton_Monkey

I feel some of the less 'seasoned' viewers of this forum need some translation.

macaque wrote: »

widely respected

= a euphemism for "totally Ignored" [as in 'Widely Acclaimed' to mean an absolute bomb of a film].

macaque wrote: »

widely respected 70% club posts

= Posts by macaque.

macaque wrote: »

bulletins

= wishful fantasies.

macaque wrote: »

prospect of big price falls

= Desperate [apologies to Hamish] but ill-founded hopes that house prices will drop through the floor so that poor tenants who can't afford their rent might some day be able to afford a cheap studio apartment.

macaque wrote: »

the idea that a £500k house today could be worth £150k in a few years time just does not compute

= a statement of the obvious.

macaque wrote: »

The only way to get the message across is by example

= There are no examples. That explains the need to dig one up from a foreign country.

julieq

Revisionist history strikes again. The 70% drop wasn't supposed to be in the UK, it was always supposed to be in Eire. These are not the droids you're looking for...

Difference in Eire? Massive oversupply.

macaque_2

julieq wrote: »

Revisionist history strikes again. The 70% drop wasn't supposed to be in the UK, it was always supposed to be in Eire. These are not the droids you're looking for...

Difference in Eire? Massive oversupply.

Julie, your cause would be better served if you produced evidence to support your claims.

According to these stats, 23% of households in Ireland have more than 5 people. In the UK, the number is only 8%. In terms of occupancy per room, the UK is near the bottom of the list along with the USA, Germany and Canada (no numbers for Ireland). The UK has 11% one person households whereas Ireland has 6%.

The evidence points to the very opposite of what you are claiming. I agree that there are plenty empty houses in Ireland but this is inevitable in a bear market.

http://www.nationmaster.com/graph/peo_hou_wit_mor_tha_5_peo-people-households-more-than-5

julieq

High counts of people per household, such as might occur for example when a dominant religion tends to be against birth control and divorce will reduce demand, not increase it - this is not the same as multiple occupation via for example flatshares where presumably occupants would like to buy.

If you also build more houses than population on the supply side, then you have massive oversupply. If you oversupply then prices fall. If you oversupply when people are losing jobs you'll see very big falls. In Eire the oversupply was about 17% in 2009.

In the UK where there is a very high rate of discrete household formation, there aren't enough houses being built, so there is upwards pressure on housing. We haven't seen significant rises in unemployment rates during or since the recession, and it's unlikely we will from this point.

It's really very simple. And my cause is best served by the headline statistics, which show big falls in Eire, where there is oversupply which is being tackled using bulldozers, and resilient prices starting to edge upwards in the UK where there is undersupply. I don't need to create illusory causal links based on Irish demographics.