So, House Prices can't fall uh?

meanmachine_2

pieceoffluff wrote: »

i think comparing uk and irish (republic) markets is extremely misleading on the part of the OP ..my mum recently built a house in the republic in probably the same amount of time it would have taken to get planning permission here

Well, it's slightly misleading. More land, more supply.

On the flip side, Ireland still has VERY low interest rates.

But of course, none of this matters if this credit crunch does happen.

No one on this forum will be able to borrow 10 times their salary to support today's prices, cos no lender will be able to pass on that debt.

Ergo, prices correct, then risk premiums rise, credit gets further restricted, and the whole thing collapses.

The amount of land hasn't shrunk, the number of houses hasn't decreased. All that's diminished is liquidity. And that'll pop this bubble - no matter how many E Europeans come to stay.

dolce_vita

After every boom there is a bust. It's as simple as that.

Immigration is a red herring, supply and demand is a red hering, rich foriegners is a red herring and all the VI bullsh1t is a red herring.

When banks decide there will be a crash, a crash there will be.

Just for the record-
In 1987 I bought my first house for £27000 and sold it 18 months later for £48000 and bought another for £39000 and sold it for £51000.
I was 23 at the time, had made 30k for doing nothing. (30k was a massive amount of money then, particularly for someone so young).

I thought I could do this for the rest of my life-even though there were people telling me that a crash was around the corner and it couldn't last.

What did they know? This is easy I said It's just going to go on.

Luckily for me I got a job abroad and went away for 2 years. I say luckily because if I hadn't I would have lost the lot if I had carried on.

When I came back in 1992, I found that I could buy 2 houses for what I paid for 1 house 4 years earlier. And I did. And I still own them today.

I know all about housing crashes. They DO happen. And the signs that I ignored then are showing again today.
The only people who say it won't happen are either too young to remember, too stupid to see the warnings or are just dreamers and chancers.

comping_cat

Orion wrote: »

Walking up your street doesn't help - the signs say 'FOR SALE' but seldom give you a price. Further, it's not how much they're asking for, it's how much people are willing to PAY. If everyone is accepting 10% under the asking price, then it's not a good sign for the market, regardless of what the 'evidence of your own eyes' are telling you.

You see a house selling for 200K, then after a month a 'SOLD' sign goes up... but there's no way of telling how much the vendors ended up accepting for the house.

If you go to http://www.nethouseprices.com/, about 3 months after a property has been sold, they will tell you how much it went for!!!

RainbowsInTheSpray

A classic piece of specious entitling on this thread - and such antics smack of desperation to beef up a faltering argument.

... I can't remember too many people actually promoting the impossibility of a fall in house prices. Most of what passes for intelligent discussion has centered around what likelihood there is of such an event.

tomstickland

I see no faltering argument.

wannabedebtfree_2

My only hope of ever owning a property is based on dreams, of either prices falling, a ramshackle place that no-one else would touch, a cheap plot of land and a 'kit' house, or winning the lottery!

I hope that in the next 3-4 years after paying off my debt and (fingers crossed) being qualified enough to be earning 2.5 times what i earn now, that they have fallen enough, for me to get my own place. BUT lets say they do drop, and I could find a 3 bed house for £175k - which would mean a 25% drop in my area - then my earnings would still not be enough to get a mortgage..........if the 'crash' means lenders are more careful and will only lend 3x income, I would need £100k in savings as a deposit (which I can't see happening in a short period of time!).

I feel that in my 30's I should feel settled and content, but living in a housing association house that means someone else determines whether or not I can f%rt in my own bath (which isn't actually deep enough to bath in - safety reg's and all that!) is not providing that! I want something to leave for my children, and if I can't afford to buy then I will have to save damn hard and leave them as much cash as I can muster!

lynzpower

I know all about housing crashes. They DO happen. And the signs that I ignored then are showing again today.
The only people who say it won't happen are either too young to remember, too stupid to see the warnings or are just drreamers and chancers.

Or, another group are those who simply dont understand it.

Ive been staring at bloomberg for an hour or so, Im educated, I am a prolific reader and poster here, and Im still trying to get my head around whats going on, and have been for a few weeks.

What hope is there for joe bloggs on the street, who doesnt even pay any interest to the financial world *we* operate in?

dolce_vita

lynz- in the words of bob dylan :
"you don't need a weatherman to know which way the wind blows"

when you look around, what do you see?

Some people look around and see house prices rising and rising and think this is a good thing. They think it represents an increase in wealth. But what good is it if your house has gone up in value by 50% if everyone else's has as well?

Some people look at someone driving a new BMW and think the driver is well off. I just see debt and MEW.
The same applies to other extravagances fuelled by HPI and all of it represents a bigger debt.

The debt eventually has to be repaid and when the bank wants their money back, they get it back. Always have, always will.

This "credit crunch" thing and FTSE thing is all to do with that. The party is over and at the end there will be winners and losers.

Three things got me through the last recession and those same three things will get me through the next one:

1.assets(including cash) 2. a steady income and
3.(most important) no debts

It is not different this time.

PasturesNew

pickles110564 wrote: »

Why would you sell at this point in the property cycle?

Because the house you want and thought you'd never afford is cheaper too.
The gap will become smaller.
Less stamp duty too

lynzpower

PasturesNew wrote: »

Because the house you want and thought you'd never afford is cheaper too.
The gap will become smaller.
Less stamp duty too

or because, presumably, you might not be able to afford to continue living there as your unsecured debts have caught up with you.