Is property in a bubble?

Crashy_Time

Jack_Johnson_the_acorn wrote: »

Whether you think it's a ponzi scheme is irrelevant, house prices are reasonable in your area as they are in mine, they're not London prices!!! You could have owned your own home by now Crashy, what size of crash will make your choice the correct one?

The valuation on my home is pretty much irrelevant to me, unless we decide to suddenly upscale or sell up and become forest dwellers (neither on the horizon).

You need to reflect on your life choices and stop projecting your anger/frustration/envy onto other posters. Becasue some of us are actually ok.

Why do you spend time responding to posts that say property prices are going to come down then, why do you care?

Thrugelmir

Jack_Johnson_the_acorn wrote: »

I have around 30-40% equity so I can access a lovely long fix at historically low rates and would never have to worry about a rate rise

I have 100% equity. Keep borrowing. Currently enjoying buying high yielding RMBS for my SIPP. Rate rises are of no particular concern as there's always the security of the property to underpin the capital.

merlingrey

I believe the global economy has stuck itself between a rock and a hard place.

Currencies will eventually require support and this can only be done by raising interest rates, the governments themselves may become more of a credit risk thus the bond yields have to rise.

So you have on the one hand: raise interest rates and cause assets to collapse (deflation) stocks, bonds and real estate all at the same time.

And on the other hand: hold or cut rates and watch currencies tank and become toilet paper (high inflation or in the case of a government on the brink...hyperinflation)

Technically at all times its a balancing act but when you have a bubble something has to burst the asset bubble or else the currency and associated debt (debt and money are the same in the modern economy) has to be destroyed.

Unfortunately they have kept a bubble going, the 2007 one never popped because they bolstered it back up by wrecking the currencies and their associated interest rates.

As far as sovereign debt goes the bond yield curve is starting to go flat and that is usually a major early warning of a recession (think amber warning), i wouldn't ignore that and certainly do not want to ignore it if it goes inverted (which is a direct red alert).

Thrugelmir

merlingrey wrote: »

I believe the global economy has stuck itself between a rock and a hard place.

So what or who do you think will give way first?

Japan which has struggled for decades. Seems to be running out of road. Abenomics is a miserable failure.

chucknorris

Thrugelmir wrote: »

So what or who do you think will give way first?

Japan which has struggled for decades. Seems to be running out of road. Abenomics is a miserable failure.

Do you think that we might end up in a similar 'tread watering' position' that Japan seems to have been in for a while? I don't feel comfortable predicting anything at the moment, I feel that we have taken a course into the unknown, and I wouldn't like to try and predict what happens.

Jack_Johnson_the_acorn

Crashy_Time wrote: »

Why do you spend time responding to posts that say property prices are going to come down then, why do you care?

I spend 2 minutes a day responding because I think you're wrong. Massively wrong as you have been for the last 20 yrs(?) since you sold.

I care whether they go up because I'll stay put until retirement and then i might cash out. If they go down I'll consider up sizing. But I mainly post because i.find the subject interesting. I could ask you the same question.... You've previously stated that you have no intention of buying but you're constantly on here arguing about the direction of house prices. But you've little prospect of buying by all accounts.

merlingrey

chucknorris wrote: »

Do you think that we might end up in a similar 'tread watering' position' that Japan seems to have been in for a while? I don't feel comfortable predicting anything at the moment, I feel that we have taken a course into the unknown, and I wouldn't like to try and predict what happens.

Well its not one country the mess is global.

Probably be like the 1970s with stagflation but we wont get out of it as easy.

House prices matter less than what they are doing relative to other assets, its not that house prices will come down in nominal terms its that they'll under-perform bonds and commodities and the yields drop . I suspect land will do better than property, but so will antiques and luxury brand watches and things like that.

padington

Thrugelmir wrote: »

So what or who do you think will give way first?

Japan which has struggled for decades. Seems to be running out of road. Abenomics is a miserable failure.

Japan is a closed migration country. They don't do immigration, hence why they are in their fix. Unique example, nothing like us. No comparison.

padington

merlingrey wrote: »

Well its not one country the mess is global.

Probably be like the 1970s with stagflation but we wont get out of it as easy.

House prices matter less than what they are doing relative to other assets, its not that house prices will come down in nominal terms its that they'll under-perform bonds and commodities and the yields drop . I suspect land will do better than property, but so will antiques and luxury brand watches and things like that.

Wrong there will be more QE and more low interest rates and more currency devaluing and more immigration and less house building and more government support for first time buyers and guess what happens when all that happens ?

Thrugelmir

padington wrote: »

Japan is a closed migration country. They don't do immigration, hence why they are in their fix. Unique example, nothing like us. No comparison.

Nothing to do with immigration.

Largest banks in the world (for a period of time). Credit boom. Asset boom. Left with immovable debt overhang. Familiar themes.