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Debate House Prices
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There could be a high price for creating a price boom
Comments
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HAMISH_MCTAVISH wrote: »Which could be 3.6.
On a more serious note, I'd be prepared to bet that the shape of the FTB lending bell curve clusters the vast majority very tightly around the median.
And that vanishingly small numbers were borrowing more than 4.5 times, or less than 2.0 times, income.
Which simply cannot be described as systemically reckless lending, by any stretch of the imagination.
It could be 3.6, if you assume no one ever paid deposits and everyone else paid 3.4x their income.
The very fact that you are being quite so difficult (and silly) on this one tells me everything I need to know.0 -
shortchanged wrote: »
If house prices rose by 100%- 200% or more in the space of a couple of years, .
They didn't.
So the rest of your post makes no sense.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
This graph shows me a lot.
It's ok saying lending never passed 3.5x income as an average. HOWEVER, that average was increasing year on year. 3.5 just makes it sound "ok". Apply some context, and look at the rate it was growing and you can see the problem.
Secondly, it shows that, from 1980 to around 2001, the House price to income and mortgage to income seemed to follow each other.
Only in 2001 did a large disparity appear. This was just around the time that lending became looser, new ways of lending started to hit the high streets (IO, self cert etc). House prices increase massively, yet the amount advanced doesn't increase in line with house prices for the first time in 20 years, and more people are buying houses.....hmmm.
According to the graph alone, everyone was able to put more of a deposit down as house prices increased.
But that makes no sense. So in reality we have to look at how the advance to income ratio was kept down while, for the first time in 20 years, houses prices ran away.
Stating "they never passed 3.5x average" makes things look good, but ignores so much.
It ignores, for a start, that 3.5x average is STILL nearly double that of 30 years ago.
(I realise this graph shows all buyers, but it's a good start. Don't want it simply ignored on this basis).0 -
Graham_Devon wrote: »This graph shows me a lot.
Yes.
Just not what you think it does....:D
(I'll let you try and think of a few explanations there Dev and see if you can hit the jackpot)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Yes.
Just not what you think it does....:D
(I'll let you try and think of a few explanations there Dev and see if you can hit the jackpot)
So you are ignoring it then?
Who'd have thunk it.
Go on then Hamish. Explain it in one of your black is actually white speeches.0 -
HAMISH_MCTAVISH wrote: »They didn't.
So the rest of your post makes no sense.
Errr yes they did.0 -
shortchanged wrote: »Errr yes they did.
Errr, no they didn't.
Prices did not increase by 100-200% in 2 years.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Errr, no they didn't.
Prices did not increase by 100-200% in 2 years.
OK Hamish very good. Being pedantic by literally taking my using the word 'a couple of years' as meaning 2 years.
But house prices did certainly rise 100 - 200% over 4 or 5 years and wages certainly didn't.0 -
Graham_Devon wrote: »Go on then Hamish. Explain it in one of your black is actually white speeches.
Gone so quick!?
0 -
shortchanged wrote: »But prices did certainly rise 100 - 200% over 4 or 5 years.
Errr, no they didn't.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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