How low will property go?

cells

p1212 wrote: »

Anyone cares about your name calling? If you are not able to add anything to the argument, better to stay quiet.

In London 99% of the people admits prices are too high, even landlords know it, then here comes the clever guy on MSE saying:

"London did not go from correctly valued 20 years ago to over valued today. It went from very cheap 20 years ago to the correct price today"

Then all londoners, deutsche bank and other banks analysts, hedge funds, investment banks who have all warned for years and now betting AGAINST overpriced London property surely are crash trolls and the random guy on MSE forums calling people in names must be the real deal...

Even Carney himself just said it might not be a good idea to max out mortgages right now.

lots of commentators on these things have little to no understanding especially of the many variables at play.

If you look at what happened between 1960-1990 in London.
The population fell by 1.2 million people, yet at the same time some 0.9 million additional units were built. Clearly If a city loses that many people and builds that many additional homes you end up in a situation of excess and prices too low

The 1990-2000 period was thus very cheap far too cheap

Then if you look at the 2000-2030 period of which we are past half way. The population has already increased by 1.5 million and by the end of the period looks to be 3 million higher. While new builds will likely come in at around 0.7 million. So prices are going getting more expensive

MARTYM8`

cells wrote: »

lots of commentators on these things have little to no understanding especially of the many variables at play.

If you look at what happened between 1960-1990 in London.
The population fell by 1.2 million people, yet at the same time some 0.9 million additional units were built. Clearly If a city loses that many people and builds that many additional homes you end up in a situation of excess and prices too low

The 1990-2000 period was thus very cheap far too cheap

Then if you look at the 2000-2030 period of which we are past half way. The population has already increased by 1.5 million and by the end of the period looks to be 3 million higher. While new builds will likely come in at around 0.7 million. So prices are going getting more expensive

It is of course a bit more complex.

London has just now passed the same population as it had just before WWII. Despite there still being the same population prices are somewhat higher now than in 1939.

Supply of money via wages and debt and money printing to pay these prices - and housing benefit to fund rental payments - is also rather critical - perhaps more so than population growth. Or to put it another way how many living wage employees on zero hours contracts does it take to buy a flat in London?

cells

MARTYM8` wrote: »

London has just now passed the same population as it had just before WWII. Despite there still being the same population prices are somewhat higher now than in 1939.

back then people were so poor they lived 7 to a house. if you can convince the population of London to go back to 7 a house prices would be extremely cheap.

Supply of money via wages and debt and money printing to pay these prices - and housing benefit to fund rental payments - is also rather critical - perhaps more so than population growth.

all that exists in the North East, The north West, the West and East midlands, wales, scotland, yorksire&humber yet prices are affordable there

Or to put it another way how many living wage employees on zero hours contracts does it take to buy a flat in London?

how many living wage employees on zero hour contracts does it take to buy a new higher end £50k car?

If they cant buy it does that mean there isnt a market for such cars for people who can?

p1212

westernpromise wrote: »

Wait a minute, you said Carney and the banks were all part of the big conspiracy against you. They're all manipulating the housing market against you, aren't they?

Which of the following propositions do you not agree with?

1. Waiting 5, 10 or 20 years to buy after a dip is economically rational.

2. Because a crash is always imminent, you will never buy.

3. The only good times to buy were in the past.

4. Nobody who took a risk that paid off 10 years later took any risk at all, because everyone knew there wasn’t going to be a crash.

5. You have never worked out the NPV of your future rents if you didn't buy.

6. Rising property prices mean an area is becoming less and less attractive to live in.

7. Other people’s gains from house price inflation are illusory. Losses from house price deflation are, however, real.

8. Everyone should be able to buy a house in the place they grew up in for 3x their own salary.

9. You use certain terms (tulips, Ponzi, boomer) and acronyms (TPTB, VI, EA, ZIRP). You are dismissive of economists, especially those who don’t forecast crashes.

10. You think other existing homeowners are greedy idiots, but you'd like to have bought in when they did.

11. All economic policy is about keeping house prices high. Low interest rates serve no other purpose than to deny certain people a house.

12. High house prices have been caused by low interest rates, which must be higher in Stoke-on-Trent, which doesn't have high house prices.

13. Buyers play no role in setting house prices. They just pay whatever sellers decide.

14. Mortgaged houses are legally owned by the lender. If a bank lends against a house, and the value of the house falls, the bank takes a hit to its balance sheet.

15. Selling a house at its current market value is greed. Wanting it buy it for 70% less than its current market value is not.

16. Recessions are wholly benign and house prices simply become affordable. Bigger deposits will not be required by lenders, nor will salary multiples shrink, nor will property availability fall, nor will rents rise, nor will anyone lose their job.

You must believe roughly all of those. Am I right?

You are like someone from the 18th century keep repeating planes couldn't possibly fly, cause metal is heavier than air as you don't understand anything more than that.

You've only seen house prices going up and all you know there are "more and more people and not enough land" and you don't understand anything more than that.

Look at this:
http://www.zerohedge.com/news/2016-08-18/vancouver-housing-market-implodes-average-home-price-plunges-20-1-month-market-devas

You see, prices down 20% in a month. Is it really just more and more people and not enough land? What has changed there in a month time that demand is falling that much? How do you explain this with your simple more people=higher prices reasoning? Did half of the population disappear overnight? Have they built extra 500K houses in a month? Why prices are falling then?

I can explain it easily, they just showed their middle finger to the speculative money big time -> they can buy 20% cheaper in a month time. Tell them they are crash trolls.

westernpromise

p1212 wrote: »

You are like someone from the 18th century keep repeating planes couldn't possibly fly, cause metal is heavier than air as you don't understand anything more than that.

You've only seen house prices going up and all you know there are "more and more people and not enough land" and you don't understand anything more than that.

Look at this:
http://www.zerohedge.com/news/2016-08-18/vancouver-housing-market-implodes-average-home-price-plunges-20-1-month-market-devas

You see, prices down 20% in a month. Is it really just more and more people and not enough land? What has changed there in a month time that demand is falling that much? How do you explain this with your simple more people=higher prices reasoning? Did half of the population disappear overnight? Have they built extra 500K houses in a month? Why prices are falling then?

I can explain it easily, they just showed their middle finger to the speculative money big time -> they can buy 20% cheaper in a month time. Tell them they are crash trolls.

eh?

what post are you replying to?

cells

p1212 wrote: »

You've only seen house prices going up and all you know there are "more and more people and not enough land" and you don't understand anything more than that

That is not the position of the non-crash-cheerleaders on this forum. The general position is that

1: house prices are regional
2: that they can and do go down and can stay that way for 10+ years. Think the north east or stoke on trent

My own idea also adds a point 3: That in the long run residential property in most places of the world, not just the uk, will head towards 'worthless' as women seem to be tending towards having only 1.5 children in the developed world.

So no, the Non-Crash-Cheerleaders dont think what you suppose we do

Look at this:
http://www.zerohedge.com/news/2016-08-18/vancouver-housing-market-implodes-average-home-price-plunges-20-1-month-market-devas

You see, prices down 20% in a month. Is it really just more and more people and not enough land? What has changed there in a month time that demand is falling that much? How do you explain this with your simple more people=higher prices reasoning? Did half of the population disappear overnight? Have they built extra 500K houses in a month? Why prices are falling then?

I can explain it easily, they just showed their middle finger to the speculative money big time -> they can buy 20% cheaper in a month time. Tell them they are crash trolls.

Speculative demand, if it exists at all, is going to be a very insignificant number of the 28,000,000 homes in the UK. Fundamental demand drives and keeps prices where they are.

We have a situation in for example the town of Middlesbrough where the average Terrace home has gone from £85k to £80k over the last 10 years. The reason is that the population has gone down in middlesborough, less demand lower prices.

Middlesborough is now very affordable not only are homes a very cheap £80k but mortgage rates can be had below 2%.

Most the crash wishers dont look into detail like this. They just cry its a speculative bubble...everywhere...even in middlesborough

AFF8879

"London being overpriced" doesn't feel like a valid argument to me. It's a globally significant city, and there are very few of those where housing is cheap or even affordable. New York, Hong Kong, Shanghai....all these cities have housing affordability issues worse than London. Paris, Zurich, Berlin are not far off.

The world is shifting, for whatever reason (I still haven't entirely figured it out) towards urban living. Hence prices in cities are pushed up.

economic

AFF8879 wrote: »

"London being overpriced" doesn't feel like a valid argument to me. It's a globally significant city, and there are very few of those where housing is cheap or even affordable. New York, Hong Kong, Shanghai....all these cities have housing affordability issues worse than London. Paris, Zurich, Berlin are not far off.

The world is shifting, for whatever reason (I still haven't entirely figured it out) towards urban living. Hence prices in cities are pushed up.

probably because as Cells says people are having kids at an older age and fewer kids as well so theres less demand for big houses in suburban areas. people also prefering to live closer to work and nightlife amenties making it so much easier and cheaper to get to from an urban location. also it is much cooler living in zone 1/2/3 london.

CLAPTON

economic wrote: »

probably because as Cells says people are having kids at an older age and fewer kids as well so theres less demand for big houses in suburban areas. people also prefering to live closer to work and nightlife amenties making it so much easier and cheaper to get to from an urban location. also it is much cooler living in zone 1/2/3 london.

there seems little evidence that there is there is less demand for big houses in suburban areas.

cell's view on the collapse of houses prices to zero, applies sometime after 21st July 2306

p1212

Really guys, you still coming up with these 20th century ideas that people want to live in the cities hence prices going up?

Can you please tell me then why prices are falling in Singapore since 2013 and why are they falling in Vancouver right now?
And why prices went down in London in 2008? Did suddenly a few million people disappear or what?

No. It is because in Singapore they've restricted borrowing against property since 2012-2013 and vancouver started to fight foreign investment money.
Also in London debt had been restricted in 2008, that's why prices started to fall.

It's not natural demand and supply, it is only sepculative money + more and more debt, if you remove these, prices will freefall as in the cities mentioned above.

The world is actually shifting, more and more places will follow the two above.