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Are house prices falling?
Comments
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It occured to me that what is probably happening in the Housing market is simply a return to the values that would have been, had it not been for the recession.
We have simply caught up to where we should be and when the market comes to terms with this, things will then continue at the normal 6-10% price rises.
Again, only my view.
Any thoughts on this?
Riz"Unhappiness is not knowing what we want, and killing ourselves to get it."Post Count: 4,111 Thanked 3,111 Times in 1,111 Posts (Actual figures as they once were))Women and cats will do as they please, and men and dogs should relax and get used to the idea.0 -
rizla01 wrote:It occured to me that what is probably happening in the Housing market is simply a return to the values that would have been, had it not been for the recession.
We have simply caught up to where we should be and when the market comes to terms with this, things will then continue at the normal 6-10% price rises.
Again, only my view.
Any thoughts on this?
Riz
I think you'll find there's nothing normal about 6-10% price rises. If you do honestly think that, I wouldn't trust you with 10p of my money, let alone anything more. Sorry.
Since the 1950s house prices have averaged y-o-y rises of 2.5%. Still think a 10% rise is "normal"? Cloud cuckoo land, mate.
If wages go up by 5% say, that is a real increase of around £1K.
If house prices go up by 5%, these days, that's a rise of more than 8K.
I think, at best, we're going to see a 10 year stagnation in the market, with a £150K house today worth £150K in 10 years' time. At worst, there'll be a crash, followed by a slow period of recovery.
Think about it, if prices keep rising by 10% each year, by 2015 the average property will be around x20 the average wage. Think that's going to happen?0 -
The only people living in houses will be Footballers, Politicians and !!!!!! stars.
Everyone else can group-hug on the streets.0 -
I think that many FTB's have been out of the market for a while now and that the prices were driven up mainly by investors. If I were an investor, would I invest in houses right now? No way! So the market is left to the FTB's, but most of them can't afford anything, and therefore... I'm not buying until they become more affordable, and most other FTB's likely (hopefully) have the same idea.0
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meanmachine wrote:I think you'll find there's nothing normal about 6-10% price rises. If you do honestly think that, I wouldn't trust you with 10p of my money, let alone anything more. Sorry.
Since the 1950s house prices have averaged y-o-y rises of 2.5%. Still think a 10% rise is "normal"? Cloud cuckoo land, mate.
If wages go up by 5% say, that is a real increase of around £1K.
If house prices go up by 5%, these days, that's a rise of more than 8K.
I think, at best, we're going to see a 10 year stagnation in the market, with a £150K house today worth £150K in 10 years' time. At worst, there'll be a crash, followed by a slow period of recovery.
Think about it, if prices keep rising by 10% each year, by 2015 the average property will be around x20 the average wage. Think that's going to happen?
You are quite correct in stating that property values have only risen, on average, by 2-4% since the 50s, but it is considered that average rises that have taken place over the last ten years are likely to be the norm for the future. Sorry to upset you.
It is also expected that, in line with the rest of europe, most of the population will be renters and not owner/occupiers in the future.
I have no crystal ball but there seem to be more indicators of this coming true than the continued struggle to own properties.
Of course you may be entirely correct, but to state that you wouldn't trust me with 10pence of your money, because I have very different views to yours is O.K. by me.
With all of your knowledge and wisdom, I wonder how many properties you own/have owned or do you only deal in theories?T4i wrote:The only people living in houses will be Footballers, Politicians and !!!!!! stars.
Everyone else can group-hug on the streets.
Well I'm not a Footballer or a Politiccian so there's hope for me yet
Riz"Unhappiness is not knowing what we want, and killing ourselves to get it."Post Count: 4,111 Thanked 3,111 Times in 1,111 Posts (Actual figures as they once were))Women and cats will do as they please, and men and dogs should relax and get used to the idea.0 -
rizla01 wrote:It occured to me that what is probably happening in the Housing market is simply a return to the values that would have been, had it not been for the recession.
We have simply caught up to where we should be and when the market comes to terms with this, things will then continue at the normal 6-10% price rises.
Again, only my view.
Any thoughts on this?
Riz
No, because if the economy is contracting then there is nothing there to support rising rices in real terms...
You have to have growth for the assets to increase in real terms otherwise everythign contracts in real-terms. A big example of this was the 1930's depression
IF we do go into a recession, and at this point it is a big IF then everythign will contract again, probably all assets will fall in real terms including houses.0 -
deemy2004 wrote:No, because if the economy is contracting then there is nothing there to support rising rices in real terms...
You have to have growth for the assets to increase in real terms otherwise everythign contracts in real-terms. A big example of this was the 1930's depression
But surely during times of non-growth we see cutbacks in workforce and unneccessary expenditure, causing profits to rise again and growth can then begin, once again resulting in wage rises and spending."Unhappiness is not knowing what we want, and killing ourselves to get it."Post Count: 4,111 Thanked 3,111 Times in 1,111 Posts (Actual figures as they once were))Women and cats will do as they please, and men and dogs should relax and get used to the idea.0 -
rizla01 wrote:You are quite correct in stating that property values have only risen, on average, by 2-4% since the 50s, but it is considered that average rises that have taken place over the last ten years are likely to be the norm for the future. Sorry to upset you.
Riz
As I point out to you, 10% rises y-o-y are not sustainable. If you're using this figure in your business plan, then you're in big trouble.
Also, in any economic downturn, wages go down. Spending contracts and that leaves a property market x6 the average wage looking even more ludicrous than it does today.
Are you not scared witless that a tiny increase in IR rates has left the economy dead in the water? As inflation creeps up and IR rates follow, what state will we be in when we hit 6% or 8%? Or can that never happen anymore?
How much gearing do you have in your wonderful property portfolio? And what will happen when all of that equity suddenly vanishes? Right now, I'm happy not to have property, and if I did it'd be a case of sell sell sell.0 -
During a recession you have falling GDP thus there is NO growth.. Nothign there to support rising asset prices in realterms.
Does not matter if profits rise for x,y,z company, if there is no growth then the economy is contracting i.e. less output, GDP per capita is declining everyone is getting poorer.
And realistically the only time you see REAL growth, is when GDP growth EXCEEDS inflation.. .Which is what we have had for the last 10 years hence why house prices have continued to boom. Once GDP growth falls below inflation then that is a negative for all asset classes including house prices. Once it goes negative and your talking about a slump... as per the early 90's / early 80's0 -
meanmachine wrote:As I point out to you, 10% rises y-o-y are not sustainable. If you're using this figure in your business plan, then you're in big trouble.
Also, in any economic downturn, wages go down. Spending contracts and that leaves a property market x6 the average wage looking even more ludicrous than it does today.
Are you not scared witless that a tiny increase in IR rates has left the economy dead in the water? As inflation creeps up and IR rates follow, what state will we be in when we hit 6% or 8%? Or can that never happen anymore?
How much gearing do you have in your wonderful property portfolio? And what will happen when all of that equity suddenly vanishes? Right now, I'm happy not to have property, and if I did it'd be a case of sell sell sell.
'As I point out to you??....' I take it that this means your points cannot be questioned?? THEY ARE FACTS, HUH?
How much money do you earn a week Meanmachine? (Since you have the chhek to ask how much i have borrowed in order to own my properties)
'right now I'm happy not to have any property, cos if I did?....does that sound a little like 'If I won the lottery this is what I'd do?'
You mentioned a little while back that I must be living in cloud cuckoo land.
You are one of lifes doubting Thomases that'll NEVER take a risk and resent every Landlord for DEPRIVING the likes of yourself from ever owning a property that you would never have taken the risk of purchasing anyway.
Don't come on here telling me that my ideas and investments are wrong based on your pumped-up image of your own opinions.
Speak from fact, not fiction.
No-one has a crystal ball but remember - He who dares, Wins.
From your safe seat, you will never make any mistakes. Right?
Well as I recall - A man that never made a mistake, never made ANYTHING.
Perhaps you'de be wise to remember those words of wisdom. They are offered free of charge but with no commitment on you to listen.
Happy Renting,
Riz"Unhappiness is not knowing what we want, and killing ourselves to get it."Post Count: 4,111 Thanked 3,111 Times in 1,111 Posts (Actual figures as they once were))Women and cats will do as they please, and men and dogs should relax and get used to the idea.0
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