Evening Standard.. house prices could fall 50%

DervProf

Wookster wrote: »

That comment does not tally with his overall thrust on house prices.

House prices and thrusting.

That rings a bell.

moneyinmypocket

I will eat my hat if they drop by 50%

Tommygun2000

wymondham wrote: »

House prices won't crash whilst people are happy to pay more than their value....

People are only going to pay more than their value if they can come up with the funds. I can see his point, house prices do not yet reflect the wider economy.

somethingcorporate

What price people pay IS their value.

Gold is a prime example, it is a worthless lump of metal that has very little use. Doesn't stop people paying silly numbers for it which then provides its "value".

DervProf

somethingcorporate wrote: »

Gold is a prime example, it is a worthless lump of metal that has very little use.

Not true, but I agree with your point in general.

StevieJ

homelessskilledworker wrote: »

“House prices are right at the top of their cycle. I think they could crash. I’m not saying it’ll happen immediately, but I do think they can drop by half.”

I think he should stick with the birdwatching.

Tommygun2000

DervProf wrote: »

Not true, but I agree with your point in general.

How can you say I agree but not true in the same post?

I do not agree. I think there is a difference between price and value. The price is what the seller decides to put on it. The value can be worked out any number of ways but has very little to do with the price.

somethingcorporate

Well there is a difference between advertised price and sales price. I would agree that there is a significant difference between advertised (or asking) price and value but sales (transactional) price and value should be the same thing!

Should being the operative word though! In reality if you buy something that costs £10 when everyone else is selling it for £20 I would say you have got good value

Tommygun2000

somethingcorporate wrote: »

Well there is a difference between advertised price and sales price. I would agree that there is a significant difference between advertised (or asking) price and value but sales (transactional) price and value should be the same thing!

Should being the operative word though! In reality if you buy something that costs £10 when everyone else is selling it for £20 I would say you have got good value

Well that's true. But would you not agree that over time asset classes go from over valued to undervalued and then back again?

Someone mentioned gold which was $200 oz in the yr 2000, this was the price but I think it was very undervalued then. If its overvalued now or not is a matter of opinion but I think there will come a time in the future when it will be over valued.

The point is price means nothing, value is what matters and they are not the same thing.

Tommygun2000

Property was undervalued in the 90's, it was over valued in 2007 and some say its still overvalued. All I will say these cycles continue and anyone who tried to say the cycles will not repeat any more is off his head.

Property will be undervalued again sometime in the future, much will depend on interest rates and repossessions and so many other factors.

But I agree with a lot of what he says in the evening standard.

50% down when we get to the bottom? Maybe not in nominal terms but in real terms easily, we are almost there if carry on the same 50% real crash in a few years. Nothing on the horizon looks to change the decline in property.