When will the correction come to house prices?

N1AK

AndyGuil wrote: »

The cycle is around 10-12 years. So 2018-2020. However this crunch has been drawn out a bit so a longer downturn can be followed by a longer up turn. So more realistically it would be 2024. Then it will be a slight fall followed with futher increases.

There are two likely possible scenarios, in my opinion obviously. One is the one AndyGuil highlights where their will not be a significant downward movement until the wider economy is shaken, and 2020-2024 is a pretty good estimate based on trends.

Another is that property becomes an aggressive asset bubble (if you take the view it hasn't already) and prices continue to increase by ~10% pa. We then have a market based on greed and people over-extending which makes it very unstable as people will overreact to any potential threat and I'd anticipate issues sooner.

Conrad

Trends points to something like another 8-10 years HPI and then a shorter period of decline but over all the long term trend is always up.


I do not really get why some people feel we're somehow entitled never to have a bit of down time, it's just a fact of life, nothing to stress about.

movilogo

First we need to define what a correction is.

If anyone thinks correction means house price will fall by 30-40%, just forget it, won't happen in our lifetime.

However, I do think madness about 20 people queuing to buy a single house in London zone is temporary. It will die down in few months time.

Conrad

The-Joker wrote: »

Ha does anyone really believe green shoots of recovery this time around? I didnt think so.

Fastest job creation rate since 1998.




http://www.theguardian.com/business/2014/mar/05/british-hiring-fastest-rate-economy-markit-employment




I have posted up dozens of similar stats showing a very robust recovery the last 18 months.




If you're still gloomy then really no amount of stats will alter your reality. This is an incredible nation in which to prosper. Recently had a slew of E Europeans that have built substantial business's in the last few years. They cannot get over the opportunity Britain affords.




No disrespect Joker but you are in danger of being one of those spoilt Britishers expecting even more than this great land already presents. Millions would swap with you in an instant, in fact billions would

pgalland

The-Joker wrote: »

I know some will say there will never be a next correction, but for the more sensible on when do you think it will be?

I can see the bubble getting bigger for years yet before the next correction but I could be wrong, it could be in the next few years.

It is important to define the market into 2 groups. London & the rest of the country.

For London, as long as it will be a safe heaven for all foreign money, and provide stability to investment - the house prices will be bomb proof in the medium to long term. Sure they dropped a little in 2008, but it only took 2/3 years to get back to those level in some parts of central London, while others didn't even go down at all (Zone 2, 3,4 etc..). Wage inflation for the people able to afford to pay over £500k for a property, is usually in line, and the mortgage availability is likely to remain good for this type of goods.

For the rest of the country, it really comes down to supply and domestic demand (no Greek, Italian, French will evade their country's punitive and unsafe economy to plunk their money into Manchester or Birmingham).
So house prices will be a function of the supply for new accommodation, the economy and the level of property getting on the market due to baby boomers retiring in other locations.

Overall, I would still urge you to look at real estate price over the past 10, 20, 50, 100 years... it's never gone down in the long term... corrections are possible in the short term (very short term for London), but the trend only goes one direction.

MFW_ASAP

BillJones wrote: »

Green shoots? It's less green shoots, and more huge great forests springing up up and down the land. The green shoots were eighteen months ago, and we are now the fastest growing major economy in the world.

How can you pretend otherwise?

The delusions of Graham's Gang know no bounds.

wymondham

I'm not sure there can be a correction whilst the market is being propped up so much... maybe when the Government has the courage to step back and see what happens to the market on its own......

BillJones

wymondham wrote: »

I'm not sure there can be a correction whilst the market is being propped up so much... maybe when the Government has the courage to step back and see what happens to the market on its own......

So you mean when they do away with stamp duty, for example, de-regulate the mortgage market, and allow muti-generational mortgages?

I can see where you are going, they'd take off like a rocket if the governmnet did this.

CLAPTON

wymondham wrote: »

I'm not sure there can be a correction whilst the market is being propped up so much... maybe when the Government has the courage to step back and see what happens to the market on its own......

you mean when the government stops housing being built using the planning laws?

you mean when government stop imposing levies and extra costs on new builds?

you mean when government stop interferring with bank capital ratios?


I doubt I'll live long enough to see the day when the government allows the market to work on its own.

Graham_Devon

CLAPTON wrote: »

you mean when the government stops housing being built using the planning laws?

you mean when government stop imposing levies and extra costs on new builds?

you mean when government stop interferring with bank capital ratios?


I doubt I'll live long enough to see the day when the government allows the market to work on its own.

There was a programme on planning the other day on the TV....and if that programme was correct, it certainly wasn't the government stopping building.

The groups set up to oppose building knew every trick in the book. Even introducing owls to fields to stop permission being granted.

And it's cliche, but all were retired and didn't want their views or surroundings "spoilt" by homes. Seemed almost a full time occupation to some of them, even going out of their way to help others in other parts of the country stop building. People who still work for a living wouldn't be able to fit it all in!