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Debate House Prices
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people want house prices to fall
Electrum
Posts: 218 Forumite
Most people believe that falling house prices would be a good thing
According to the FT, a recent international survey by ING found that nearly three-quarters of European consumers believe that “a fall in house prices would benefit society”.
What’s particularly interesting is that it wasn’t just renters who thought so. More than two-thirds of European homeowners – whose net wealth would presumably be threatened by falling prices – agreed too.
Looking at the figures in more detail, nearly 60% of British homeowners and nearly 80% of renters thought a drop in prices would be a good thing.
This is yet another sign that the political mood music is changing.
The social pact under New Labour was fairly simple: the government enjoyed a super-charged tax take as Britain’s oversized financial sector leveraged up the economy.
Those at the lower end of the income scale got tax credits. Those at the top end enjoyed a forgiving tax regime. And those in the middle either gained or could look forward to super-sized gains based on property price inflation. The way to win an election was to make sure that house prices had risen since the last one. That was a surefire sign to most people that the economy was going in the right way.
The credit crunch put a stop to that conveyor belt. It revealed that a lot of the ‘wealth’ was based on fantasy valuations, ones that could evaporate as quickly as they’d appeared in the first place.
Worse than that, it called into question the entire system. With the banking system on the verge of freezing up entirely, the government and central banks felt the need to step in and halt the crash.
http://moneyweek.com/property-investors-beware-people-want-house-prices-to-fall/
According to the FT, a recent international survey by ING found that nearly three-quarters of European consumers believe that “a fall in house prices would benefit society”.
What’s particularly interesting is that it wasn’t just renters who thought so. More than two-thirds of European homeowners – whose net wealth would presumably be threatened by falling prices – agreed too.
Looking at the figures in more detail, nearly 60% of British homeowners and nearly 80% of renters thought a drop in prices would be a good thing.
This is yet another sign that the political mood music is changing.
The social pact under New Labour was fairly simple: the government enjoyed a super-charged tax take as Britain’s oversized financial sector leveraged up the economy.
Those at the lower end of the income scale got tax credits. Those at the top end enjoyed a forgiving tax regime. And those in the middle either gained or could look forward to super-sized gains based on property price inflation. The way to win an election was to make sure that house prices had risen since the last one. That was a surefire sign to most people that the economy was going in the right way.
The credit crunch put a stop to that conveyor belt. It revealed that a lot of the ‘wealth’ was based on fantasy valuations, ones that could evaporate as quickly as they’d appeared in the first place.
Worse than that, it called into question the entire system. With the banking system on the verge of freezing up entirely, the government and central banks felt the need to step in and halt the crash.
http://moneyweek.com/property-investors-beware-people-want-house-prices-to-fall/
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Comments
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Most people believe that falling house prices would be a good thing
According to the FT, a recent international survey by ING found that nearly three-quarters of European consumers believe that “a fall in house prices would benefit society”.
What’s particularly interesting is that it wasn’t just renters who thought so. More than two-thirds of European homeowners – whose net wealth would presumably be threatened by falling prices – agreed too.
Looking at the figures in more detail, nearly 60% of British homeowners and nearly 80% of renters thought a drop in prices would be a good thing.
This is yet another sign that the political mood music is changing.
The social pact under New Labour was fairly simple: the government enjoyed a super-charged tax take as Britain’s oversized financial sector leveraged up the economy.
Those at the lower end of the income scale got tax credits. Those at the top end enjoyed a forgiving tax regime. And those in the middle either gained or could look forward to super-sized gains based on property price inflation. The way to win an election was to make sure that house prices had risen since the last one. That was a surefire sign to most people that the economy was going in the right way.
The credit crunch put a stop to that conveyor belt. It revealed that a lot of the ‘wealth’ was based on fantasy valuations, ones that could evaporate as quickly as they’d appeared in the first place.
Worse than that, it called into question the entire system. With the banking system on the verge of freezing up entirely, the government and central banks felt the need to step in and halt the crash.
http://moneyweek.com/property-investors-beware-people-want-house-prices-to-fall/
what were the figures 5, 10, 15 , 20 years ago?0 -
OP,
The whole premise of the argument is undermined by the fact that it comes from Hypocrisy Central (aka Moneyweek).In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Most people believe that falling house prices would be a good thing
According to the FT, a recent international survey by ING found that nearly three-quarters of European consumers believe that “a fall in house prices would benefit society”.
What’s particularly interesting is that it wasn’t just renters who thought so. More than two-thirds of European homeowners – whose net wealth would presumably be threatened by falling prices – agreed too.
Looking at the figures in more detail, nearly 60% of British homeowners and nearly 80% of renters thought a drop in prices would be a good thing.
This is yet another sign that the political mood music is changing.
Not really. It's always been in the interests of many (most?) homeowners for prices to fall, since they are still hoping to "trade up". The only homeowners better served by rising house prices are those intending to trade down e.g. retire.0 -
The problem is George Osborne thinks falling house prices is a bad thing!0
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The problem is George Osborne thinks falling house prices is a bad thing!
Actually politicians from all sides go out of there way to never say whether it would be best if house prices went up, down or stayed the same. Either because they don't want to annoy whichever part of the electorate the answer wouldn't suit, or because they genuinely don't know
Hence the nearest you ever hear is that they want a "healthy" housing market etc.0 -
65% of the population dont want house prices to fall.
15% do
20% dont care
I think that's more representative of the UK0 -
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mayonnaise wrote: »He might be onto something there.
The last time house prices fell considerably (2008-2009) it went hand in hand with a collapsing economy and mass redundancies.
you mean, the last time there was economic problems in the country, house prices fell as a result0 -
Most people believe that falling house prices would be a good thing
Great. I wish that the price of loads of assets would fall so I could buy a load of them. Unfortunately the price is the price and is set by the interactions between buyers and sellers.
I'd love to live on the river in Sydney and pay a couple of bucks for the pleasure. It's unlikely to happen any time soon.0
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