We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
'We've reached a tipping point' Signs of house price weakness
Options
Comments
-
I think that people are ignoring or underestimating the significance of the tightening of credit underwriting standards since 2012, and I think that unless the present tighter regulation of owner-occupier mortgages are relaxed this will put an effective cap on sustainable HPI rates, all other things being equal, and that cap will be earnings growth, presently about 1%-2%.
Here's a graph from HPC....
Yes if all all other things had been equal you may well have been correct. However, all other things weren't equal so you were wrong. 2012 looks like the bottom rather than the top.
Anyone living in the South-East in 2012 that came across HPC and were sucked in by your, admittedly, well written and authoritatively styled arguments and decided to STR on the basis of what they saw must be gutted.
What do you say to them? Do you apologise or just keep trying to convince them to keep the faith and, after all the false alarms, this time the crash is really on?0 -
straw man argument.Here's a graph from HPC....
Yes if all all other things had been equal you may well have been correct. However, all other things weren't equal so you were wrong. 2012 looks like the bottom rather than the top.
Anyone living in the South-East in 2012 that came across HPC and were sucked in by your, admittedly, well written and authoritatively styled arguments and decided to STR on the basis of what they saw must be gutted.
What do you say to them? Do you apologise or just keep trying to convince them to keep the faith and, after all the false alarms, this time the crash is really on?
I made the point up stream that there was no answer to the buy v rent debate. But, there are times when one is the right choice ( if you have a choice at all) and the other isnt.
You could pick 500 points on that graph where buying was better, and 500 points where renting was better for any indvidual case.
The question is, what is best today, as I cant buy yesterday.
people make decisions on information from all manner of sources...what is wrong is for them to be suckered by someone who insists one view is correct for all times, when clearly, it isnt.0 -
(snip)
You could pick 500 points on that graph where buying was better, and 500 points where renting was better for any indvidual case.
The question is, what is best today, as I cant buy yesterday.
(snip)
Bang on. The thread title determines that we're debating whether or not we've reached a tipping point. Are there signs of house price weakness today?0 -
Bang on. The thread title determines that we're debating whether or not we've reached a tipping point. Are there signs of house price weakness today?
I think you have hit the nail on the head. This is the whole reason HPC have been so spectacularly wrong over the last decade. Taking a day by day approach, as opposed to a 20 year view will never pay off.
Lets take Crashy as a case in point. He could of been 40k better off had he bought 17 years ago, mortgage free and saving a greater % of his monthly income. But he thinks about "Today", or even worse has flashbacks to 2008 - things have moved on from there. As it stands now he needs a 125% drop to be back to where he could of got on the ladder.
The HPC graph is moving in line with history. I don't for one minute think that upswing stays on that trajectory but I see no driver, reason or logic for that to move 30,40,50% south.
What do you think?0 -
people make decisions on information from all manner of sources...what is wrong is for them to be suckered by someone who insists one view is correct for all times, when clearly, it isnt.
People don't spend enough time reviewing past decisions. If I had made the life changing decision to STR then I'd be able to tell you to within a couple of pounds the financial effect of that decision at any point in time.
If someone from the South-East sold to rent in 2012 then currently they'd be looking at a large negative number for their efforts. They didn't STR then in anticipation of a 2014 crash - they believed we were at a tipping point in 2012 (as we are now?). It certainly hasn't worked out as expected - there are a few coping methods...
- mumble about the crash still being on but express surprise it hasn't started yet
- do like HPC_Troll and just don't do the maths (ignorance is bliss)
- do like Crashy and do the maths but fail utterly to comprehend the numbers0 -
What do you say to them? Do you apologise or just keep trying to convince them to keep the faith and, after all the false alarms, this time the crash is really on?
OK - there is no ad hominem in this, (e.g. this time round you aren't calling me by implication a precocious little girl - which I guess is only mockery as I am not any kind of little girl)
What I would say to them is that making the most important decision of your financial life based on the fool ramblings of someone on the internet, especially if you have no way as ascertaining their credentials or working out whether or not they have an axe to grind is a pretty unwise course of action. Of course that cuts both ways. And is, again, off topic!
I think that the argument that the post-2012 path is a guide to the post-2014 path is an argument that needs to be made by you, if you wish to debate.
I've fashioned an argument justifying why I believe that prices will be flat or fall from here. You haven't addressed any of the points that I have made.
I haven't used the inflammatory and vague term "crash" in anything I've posted. You do not get to put words into my mouth based the expectations that my (perhaps ill-judged) joky username provokes in you. That is not debate.
If there are other posters who want a chance to debate people with a negative view on prices without getting banned, here it is - so debate!0 -
what were next years numbers again?People don't spend enough time reviewing past decisions. If I had made the life changing decision to STR then I'd be able to tell you to within a couple of pounds the financial effect of that decision at any point in time.
If someone from the South-East sold to rent in 2012 then currently they'd be looking at a large negative number for their efforts. They didn't STR then in anticipation of a 2014 crash - they believed we were at a tipping point in 2012 (as we are now?). It certainly hasn't worked out as expected - there are a few coping methods...
- mumble about the crash still being on but express surprise it hasn't started yet
- do like HPC_Troll and just don't do the maths (ignorance is bliss)
- do like Crashy and do the maths but fail utterly to comprehend the numbers0 -
(snip)
The HPC graph is moving in line with history. I don't for one minute think that upswing stays on that trajectory but I see no driver, reason or logic for that to move 30,40,50% south.
That's it? This is your argument? You're going to go with your reading of the shape of the real prices graph?
It seems that you are willing to accept that 20%-25% may be on the cards, so it looks like we may be on the same page. Perhaps we've been talking at cross purposes.What do you think?
Like I said, and justified, what I think will happen in the near term (2 years? Who knows?) is flat or falling.
Up at 5% per annum perfectly possible. Up 10% from today over a year unlikely. Up 20% highly unlikely
Flat possible - flat in nominal and falling in real probably the Bank of England's preferred path. (Nominal up briskly - 8%? - probably the Treasury's preferred path, but if wishes were horses, beggars would ride and all that.)
20% down in the aggregate nominal statistics possible in the next 36 months. 35% down not impossible (or if it is why are the Bank of England bothering to stress test for exactly that scenario).
In the long, long term, nominal prices inflatingat around 3% from 1997 nominal with plenty of bumps along the way.
Oh, and anyone who tells you that they know, doesn't know.0 -
Up at 5% per annum perfectly possible. Up 10% from today over a year unlikely. Up 20% highly unlikely
Flat possible - flat in nominal and falling in real probably the Bank of England's preferred path. (Nominal up briskly - 8%? - probably the Treasury's preferred path, but if wishes were horses, beggars would ride and all that.)
20% down in the aggregate nominal statistics possible in the next 36 months. 35% down not impossible (or if it is why are the Bank of England bothering to stress test for exactly that scenario).
So anywhere between +20% and -35% in the next three years? I agree
I imagine this prediction would go down like a lead balloon on HPC.0 -
That's it? This is your argument? You're going to go with your reading of the shape of the real prices graph?
It seems that you are willing to accept that 20%-25% may be on the cards, so it looks like we may be on the same page. Perhaps we've been talking at cross purposes.
Like I said, and justified, what I think will happen in the near term (2 years? Who knows?) is flat or falling.
Up at 5% per annum perfectly possible. Up 10% from today over a year unlikely. Up 20% highly unlikely
Flat possible - flat in nominal and falling in real probably the Bank of England's preferred path. (Nominal up briskly - 8%? - probably the Treasury's preferred path, but if wishes were horses, beggars would ride and all that.)
20% down in the aggregate nominal statistics possible in the next 36 months. 35% down not impossible (or if it is why are the Bank of England bothering to stress test for exactly that scenario).
In the long, long term, nominal prices inflating in nominal at around 3% from 1997 nominal with plenty of bumps along the way.
Oh, and anyone who tells you that they know, doesn't know.
HPC don't consider 20-25% a crash because we have already seen that and it "just a taster". I think a worst case scenario, and I mean worst will be nominally flat from here - once the last of the chancers have either withdrawn their properties or met the market.
You can read that graph anyway you like. I know what I see in it.
Confidence has an awful lot to do with the economy and that's getting stronger all the time. I think history will "rhyme" for a while.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244K Work, Benefits & Business
- 599K Mortgages, Homes & Bills
- 176.9K Life & Family
- 257.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards