How low will property go?

westernpromise

mrlegend123 wrote: »

Your list is stupid and sad. Sorry I had to say that.

It's a very accurate indicator of future poverty. Reflect on that.

Ask Crashy - 50 years old; rents a bedsit; pays more for it than buying two flats would have cost 20 years ago; scores 16/16.

MobileSaver

mrlegend123 wrote: »

It's affordability not demand vs supply. Have a think about it before posting a aggressive post back at me.

For the avoidance of doubt, do you believe the fact that the population is growing much quicker than we're building new houses has nothing to do with house prices increasing?

System

Of course I do. The main reason is affordability not demand vs supply. Like I said before think about it.

chucknorris

mrlegend123 wrote: »

Your list is stupid and sad. Sorry I had to say that.

Probably just as sorry as westernpromise was to itemise the list, because the contents of the list is obviously stupid and sad, but also unfortunately they are true characteristics of a crash troll (not saying you, just in general).

p1212

cells wrote: »

So what do you think is the correct value in London give me a ££££. When will that be achieved by?

Based on historic data and common sense, first time buyer earning-price ratio would seem to be sustainable to me around 6 in London, that would mean prices at the level of 2010-2012 + inflation.

I don't know when this will be achieved or if this will be achieved at all, as the last twenty years - especially 2008 - showed policymakers can actually do with prices whatever they want.

It all depends on them, if tomorrow they say brexit is cancelled and BTL restrictions are reversed so they send out a message they will actually support high prices for a few more years, it wont happen anytime soon.

I am telling you my predictions based on the recent underlying developments I see, based on the US rate rises - which give us limited time frame - and based on the fact that even Osborne and Carney started the tightening some time ago and if anything, it is only more tightening what is on the menu.

I just don't see May saying that fcuk these all BTL restrictions and let them roll again and push up prices further in London. To be honest at the moment it is also unlikely she will go full out against BTL as london transaction numbers are down since april and now after brexit prices are heading south too.

But if she feels the urge for a radical change and has the balls too, it is rather going to be further tightening or some indirect stuff like easing planning, which is not an obvious further attack against london prices, but would be a very substantial change.

p1212

MobileSaver wrote: »

Just to be clear on this... you do not believe that the fact that the population is growing much quicker than we're building new houses has anything to do with house prices increasing?

Population itself is not an issue.

In normal circumstances as population increases it pushes up prices and when prices are high enough, so that it does worth building a house a bit further out, more houses are built and this lets out a bit of a pressure from the system and prevents further price increases.

This process keeps prices close to the real value, their actual building costs, and even if the banks go bust, prices cannot fall too much as building a house won't get any cheaper.

The issue here is planning, which restricts the average person from building a house - so more and more people have to fight on the same existing stock against each other and against the other problem - the exponentially created speculative money.

Governments do not want an ageing and decreasing population, so they can't decrease the number of people, all they can do is to fight speculative money or ease planning.

Now they haven't done any of these until now - GDP and shadow economy benefited very well from the increased transaction numbers and speculative money - but it seems this era is over and they want to restrict speculative money, so people have less opponents when fighting for the existing stock, but the only working long term solution is to ease up planning.

Land price is basically a speculative value which can change between 0 and any amount according to the money flowing into the system and restrictions on newly allocated land, and while in central london there might be a case for lack of land, a bit further out right next to vast agricultural areas increases in land price like this yearly 100% above is based on pure speculation and just a temporary event.

Unless of course we think it's more important to make our childrens life much harder, keep them in debt forever, so we keep all these agricultural areas as agricultural areas forever and watch the little ones living in flatshares for a grand per month...

Jack_Johnson_the_acorn

mrlegend123 wrote: »

Your list is stupid and sad. Sorry I had to say that.

Does the list not accurately describe a crash troll. Do you agree with his description. Or is the realisation of what you are cause feelings of upset and confusion?

Please explain why you think the list is stupid and sad.

cells

p1212 wrote: »

Based on historic data and common sense, first time buyer earning-price ratio would seem to be sustainable to me around 6 in London, that would mean prices at the level of 2010-2012 + inflation.

I don't know when this will be achieved or if this will be achieved at all, as the last twenty years - especially 2008 - showed policymakers can actually do with prices whatever they want.

It all depends on them, if tomorrow they say brexit is cancelled and BTL restrictions are reversed so they send out a message they will actually support high prices for a few more years, it wont happen anytime soon.

I am telling you my predictions based on the recent underlying developments I see, based on the US rate rises - which give us limited time frame - and based on the fact that even Osborne and Carney started the tightening some time ago and if anything, it is only more tightening what is on the menu.

I just don't see May saying that fcuk these all BTL restrictions and let them roll again and push up prices further in London. To be honest at the moment it is also unlikely she will go full out against BTL as london transaction numbers are down since april and now after brexit prices are heading south too.

But if she feels the urge for a radical change and has the balls too, it is rather going to be further tightening or some indirect stuff like easing planning, which is not an obvious further attack against london prices, but would be a very substantial change.

I only speak basic crash cheerleader. is my interpretation correct

'I have no idea how much prices will fall, maybe to 2010 levels if the government want it and I dont know the time frame oh and prices might go up too but I think the chances of that are lower'

If I have interpreted correctly thats not a lot of information or very useful

cells

p1212 wrote: »

Population itself is not an issue.

In normal circumstances as population increases it pushes up prices and when prices are high enough, so that it does worth building a house a bit further out, more houses are built and this lets out a bit of a pressure from the system and prevents further price increases.

people pay a premium to live in certain areas. Generally this is in the center of town but not always. So building more will help reduces prices everywhere it wont reduce them as much in the center of town

This process keeps prices close to the real value, their actual building costs, and even if the banks go bust, prices cannot fall too much as building a house won't get any cheaper.

WRONG: Prices can and eventually (possibly decades away for most English cities and towns) will fall well below build cost. You can already see this in some parts of England eg in Stoke prices are below build cost. Also 1995 London for much of it was below build cost.

Building does continue as builders are able to charge a premium above old stock or they concentrate on higher end builds.

Germany is probably the leader in this as their demographics are the worst. Homes there are worth less than build cost but they continue to build (largest reit has somehting like 300,000 properties on its books at around 40k euro each)

The issue here is planning, which restricts the average person from building a house - so more and more people have to fight on the same existing stock against each other and against the other problem - the exponentially created speculative money

Not everywhere perhaps not in 75% of the country there is good supply of properties and they are affordable/cheap so planning is not really an issue. On the other hand places like London are difficult to get the land for mass builds you either need to compulsory purchase and knock down perfectly fine homes or build on the finite number of brownfield also fairly expensive sites. Even if greenbelt is given up its going to have two factors: 1 yes prices and rents will fall but 2: that is going to mean a much fewer people leave london and much more come so overall 3: you are going to need to up the build rate by a huge amount to cover all this I think probably >100k units a year and for London to grow at >200,000 people a year.

p1212

cells wrote: »

people pay a premium to live in certain areas. Generally this is in the center of town but not always. So building more will help reduces prices everywhere it wont reduce them as much in the center of town



WRONG: Prices can and eventually (possibly decades away for most English cities and towns) will fall well below build cost. You can already see this in some parts of England eg in Stoke prices are below build cost. Also 1995 London for much of it was below build cost.

Building does continue as builders are able to charge a premium above old stock or they concentrate on higher end builds.

Germany is probably the leader in this as their demographics are the worst. Homes there are worth less than build cost but they continue to build (largest reit has somehting like 300,000 properties on its books at around 40k euro each)




Not everywhere perhaps not in 75% of the country there is good supply of properties and they are affordable/cheap so planning is not really an issue. On the other hand places like London are difficult to get the land for mass builds you either need to compulsory purchase and knock down perfectly fine homes or build on the finite number of brownfield also fairly expensive sites. Even if greenbelt is given up its going to have two factors: 1 yes prices and rents will fall but 2: that is going to mean a much fewer people leave london and much more come so overall 3: you are going to need to up the build rate by a huge amount to cover all this I think probably >100k units a year and for London to grow at >200,000 people a year.

Don't see why would it be difficult to allocate new land for example around Guildford, just farms and agriculture around and look at the prices.