Why exactly are houses so expensive?

HAMISH_MCTAVISH

Graham_Devon wrote: »

You cannot invent supply from thin air. .

When that item in short supply is "money", you actually can invent more supply from thin air.

Which is exactly what the BOE is doing with "funding for lending".

shortchanged_2

HAMISH_MCTAVISH wrote: »

Alright then, at least it's a start.



Because those things are gone, and prices remain high!!!

It's so blindingly obvious, I'm genuinely amazed you can't get it.

In what's probably a vain hope that you might understand, I'll give you another example.....

Monetary policy, forbearance, social safety nets, housing benefits, etc, are the same throughout the UK. Yet in Northern Ireland, prices have fallen 50% on average. In the rest of the UK it's just 10% on average.

Because Northern Ireland is a good example of a genuine, speculative, credit fuelled, housing bubble, where hot money flowed in from ROI and drove up prices. All the props in the world cannot hold up prices when that's what you have, and you remove most of the lending.

On the mainland however, credit was not the main cause of house price rises. So even though we removed most of the credit, prices are just 10% down on average . Despite having exactly the same monetary policy (or "props" as you'd call it) to Northern Ireland!!!

Exactly the same "props" are in place there as here. Yet prices have fallen 50% there, and just 10% here.

How on earth do you explain that if credit/IR's is the main reason?

It's exactly the same in both!!!

God it's like talking to the pirate from the Goonies!

Hamish I take it you are well aware that a large number of house sales are currently cash buys, i.e people who don't need access to credit.

And as you mentioned the props in place that are helping prevent a larger number of repossessions than the market would normally have under these circumstances.

Graham_Devon

HAMISH_MCTAVISH wrote: »

When that item in short supply is "money", you actually can invent more supply from thin air.

Which is exactly what the BOE is doing with "funding for lending".

You've missed out the rest of my post, which looked at the results of inventing that money. Namely house prices increasing, therefore requiring the invention of ever more money, and secondly, our children and unborn having to pay the price of this.

Easy to suggest things can be done when you don't look at the results.

I can go out and gamble my house, my car and every penny I own on the horses today. If I don't think about the consequences, what a thrill that would be.

shortchanged_2

HAMISH_MCTAVISH wrote: »

.

On the mainland however, credit was not the main cause of house price rises. So even though we removed most of the credit, prices are just 10% down on average . Despite having exactly the same monetary policy (or "props" as you'd call it) to Northern Ireland!!!

Exactly the same "props" are in place there as here. Yet prices have fallen 50% there, and just 10% here.

How on earth do you explain that if credit/IR's is the main reason?

It's exactly the same in both!!!

This is probably because Northern Ireland had a bigger boom compared to the rest of the UK, yet earnings in NI are much less so the loose credit during the boom has more effect now it has been removed so house prices over there were even more overvalued than on the mainland.

Lower salaries Weekly median earnings for all NI employees including those in full and part-time employment increased by 1.5% to £360, compared to the UK where earnings remained stagnant.
Despite this, Northern Ireland still continues to have much lower salaries.
The figures revealed it has the lowest full-time gross weekly median earnings at £451. This is in contrast to London, where employees earn almost £200 more per week.


We are all aware of regional differences in the housing market Hamish with some places like London and Aberdeen prices will never drop.


But look outside those areas Hamish and prices have fallen.

HAMISH_MCTAVISH

shortchanged wrote: »

But look outside those areas Hamish and prices have fallen.

Not by 50%.

Even in the areas with similar wages to NI.;)

shortchanged_2

HAMISH_MCTAVISH wrote: »

Not by 50%.

Even in the areas with similar wages to NI.;)

Yes I know Hamish. So obviously the boom in NI was worse in the first place.

Perhaps they got carried away seeing the prices in the South.

HAMISH_MCTAVISH

shortchanged wrote: »

Yes I know Hamish. So obviously the boom in NI was worse in the first place.

Quite.

Because they had a speculative, credit fuelled, bubble, and we did not.;)