London Has Peaked

Crashy_Time

Bubble_and_Squeak wrote: »

all we need now is hamish

He usually pops up straight away, as soon as anyone says anything negative about the Magic HPI that Peter Pan sprays all over the houses at night from his magic willy. Let me try and summon him.............ABERDEEN IS CRASHING!............PETER PAN IS REALLY AN EA!..........Let`s see if that works.

Jason74

In_For_A_Penny wrote: »

Assuming supply is increasing (and I'm not convinced you have demonstrated that). . . Why do you think supply is building up?

Clearly its not from more building. If it is ordinary home owners then they would be looking to live elsewhere and so no change in the supply there. BTL investors selling up?

Granted some BTL property owners may feel now is a good time to "cash in" but unless they have multiple properties, I still reckon most BTL investors will hold onto them as the yield is still likely to be better than that achieved elsewhere (or else they wouldn't be doing it).

So a proportion more properties on the market might mean, briefly, that there is a shift in the supply/demand but I still think this will quickly settle and prices will pick up again.

MMR may have introduced a delay in the system that is now filtering through but I don't believe that means properties are not selling because people feel a "crash" is imminent. Nothing has fundamentally changed in the economy.

I'm interested to hear your views.

I know the question wasn't directed at me, but I'll throw my own answer in anyway. Supplky in my area is dramatically up in recent Months. In the Postcode next to mine, there were about 180 properties available in March / April this year. As of today, there are 320. For family houses, the supply rise is even more pronounced, going from 34 to 86.

As for why this has happened, I think it's a simple case of the market having overshot. Prices are up about 40% from last spring, which is clearly unsustainable. That led to a complete frenzy earlier in the year, with multiple offers over asking price being the norm for a while. That frenzy has now burned out, while at the same time the possibility of higher prices has brought a lot of new supply into the market.

Hamish regularly makes the point that when properties are scarce, prices will rise until supply and effective demand (IE people who are willing and able to pay market priuces) balance out. That's exactly what seems to have happened, but in this particular instance, the process was so rapid that it overshot the balance point in the frenzy. With that frenzy burned out, buyers are thinking twice, while some sellers are looking to cash in at favourable prices.

All of that means that the balance in my local market has shifted from sellers to buyers. That certainly doesn't mean that a crash is imminentent. As you say, the drivers for demand are still very much there. But it does mean that we have entered a new stage in the market, where buyers have the upper hand over sellers (albeit at much higher prices than 12 Months ago). If I was a betting man, I'd wager that my area will see prices flat, or maybe down a small amount (5% or so) over the next 6-12 months, but that the long term trend probably still remains upwards.

Jason74

Crashy_Time wrote: »

Why?:money:

Was your question (to the comment that your presense on the thread killed off rational discussion).

Crashy_Time wrote: »

He usually pops up straight away, as soon as anyone says anything negative about the Magic HPI that Peter Pan sprays all over the houses at night from his magic willy. Let me try and summon him.............ABERDEEN IS CRASHING!............PETER PAN IS REALLY AN EA!..........Let`s see if that works.

Your post above is the answer to it.

Crashy_Time

Jason74 wrote: »

I know the question wasn't directed at me, but I'll throw my own answer in anyway. Supplky in my area is dramatically up in recent Months. In the Postcode next to mine, there were about 180 properties available in March / April this year. As of today, there are 320. For family houses, the supply rise is even more pronounced, going from 34 to 86.

As for why this has happened, I think it's a simple case of the market having overshot. Prices are up about 40% from last spring, which is clearly unsustainable. That led to a complete frenzy earlier in the year, with multiple offers over asking price being the norm for a while. That frenzy has now burned out, while at the same time the possibility of higher prices has brought a lot of new supply into the market.

Hamish regularly makes the point that when properties are scarce, prices will rise until supply and effective demand (IE people who are willing and able to pay market priuces) balance out. That's exactly what seems to have happened, but in this particular instance, the process was so rapid that it overshot the balance point in the frenzy. With that frenzy burned out, buyers are thinking twice, while some sellers are looking to cash in at favourable prices.

All of that means that the balance in my local market has shifted from sellers to buyers. That certainly doesn't mean that a crash is imminentent. As you say, the drivers for demand are still very much there. But it does mean that we have entered a new stage in the market, where buyers have the upper hand over sellers (albeit at much higher prices than 12 Months ago). If I was a betting man, I'd wager that my area will see prices flat, or maybe down a small amount (5% or so) over the next 6-12 months, but that the long term trend probably still remains upwards.

What are the drivers for demand?

Crashy_Time

Jason74 wrote: »

Was your question (to the comment that your presense on the thread killed off rational discussion).



Your post above is the answer to it.

I honestly think you overrate your own ability for rational discussion.

Jason74

Crashy_Time wrote: »

I honestly think you overrate your own ability for rational discussion.

I'm sure you do, but then again you also honestly think that the housing market is a Ponzi scheme. So you honestly thinking something doesn't bear any relation to whether it's true or not.

Crashy_Time

Jason74 wrote: »

I'm sure you do, but then again you also honestly think that the housing market is a Ponzi scheme. So you honestly thinking something doesn't bear any relation to whether it's true or not.

Can`t you get your head around why the property market of the last decade or so is a Ponzi scheme? If it isn`t, why are people struggling to sell their properties?

Bubble_and_Squeak

Crashy_Time wrote: »

Can`t you get your head around why the property market of the last decade or so is a Ponzi scheme? If it isn`t, why are people struggling to sell their properties?

they're not
apparently there are 16 buyers to each property

Jason74

Crashy_Time wrote: »

Can`t you get your head around why the property market of the last decade or so is a Ponzi scheme? If it isn`t, why are people struggling to sell their properties?

I was going to try and explain this to you, then realised that other posters far more eloquent than me have already valliantly tried to do so without success so I decided not to waste my time. Anyway, engaging with you has exactly the negative effect on decent debate that In for a Penny feared, so I'll leave it there (both for this discussion and in the more general sense)

Crashy_Time

Jason74 wrote: »

I was going to try and explain this to you, then realised that other posters far more eloquent than me have already valliantly tried to do so without success so I decided not to waste my time. Anyway, engaging with you has exactly the negative effect on decent debate that In for a Penny feared, so I'll leave it there (both for this discussion and in the more general sense)

No, it hasn`t been explained, and your patronising tone doesn`t hide the fact that you just can`t engage with the debate. Posting paragraph after paragraph of waffle, that could be written in three lines, just shows that you are out of your depth, and past your bed time.