How low will property go?

AG47

AG47 wrote: »

You are making the mistake of supply and demand, where you count everybody who wants to buy a property as demand, when the truth is it doesn't matter how many people want to buy, all that matters is how many people can raise the funds to buy. That is the demand. And it's shrinking as banks tighten borrowing, and interest rates can only go up in the future.

I do see the bottom of the next property crash equivalent the the last bottoms of every other property cycle. Ofcourse prices won't go to the same low they were in the 90s, they will go to the equivalent adjusted low compared with everything else.

It's absolutely correct about true supply and demand should be measured by not all who want to live in a certain property, but only those who can afford it at current prices.

ukcarper

AG47 wrote: »

It's absolutely correct about true supply and demand should be measured by not all who want to live in a certain property, but only those who can afford it at current prices.

That's true but property is still selling therefore people can still afford to buy. In a poor market people are less likely to put thier properties on the market so lower volumes does not necessarily mean fewer buyers.

AG47

ukcarper wrote: »

That's true but property is still selling therefore people can still afford to buy. In a poor market people are less likely to put thier properties on the market so lower volumes does not necessarily mean fewer buyers.

Banks are still lending for now, it's when credit dries up, that's when the largest falls in property will come.

ukcarper

AG47 wrote: »

Banks are still lending for now, it's when credit dries up, that's when the largest falls in property will come.

What makes you so certain the credit will dry up?

Thrugelmir

ukcarper wrote: »

What makes you so certain the credit will dry up?

Lending has to be profitable. Banks aren't selling cans of baked beans. Quality over quantity.

ukcarper

Thrugelmir wrote: »

Lending has to be profitable. Banks aren't selling cans of baked beans. Quality over quantity.

True but mortgage lending is profitable for banks have you reasons to think it will become unprofitable?
Selling baked beans has to be profitable for companies selling baked beans.

cells

The crash wishers thinking and analysis is not based on what is likely but based on what they hope will happen. Put a lot of them in the same room (or forum) and they convince themselves that what they hope to happen is actually what is likely to happen when the reality is that much of their hopes are very unlikely.

westernpromise

cells wrote: »

The crash wishers thinking and analysis is not based on what is likely but based on what they hope will happen. Put a lot of them in the same room (or forum) and they convince themselves that what they hope to happen is actually what is likely to happen when the reality is that much of their hopes are very unlikely.

And beyond that they even convince themselves that it is happening. Remember Crashy's 50% off in Aberdeen forecast earlier his year? Wonder how that's looking?

wotsthat

AG47 wrote: »

I never said that at all, I said they can't go much lower, all they can do is go up. I have a long term view.

Well they could go a bit lower, they could go up or, what you haven't considered, they could stay low for a long long time. Odd really given they've stayed low for a long time (and then fell).

You don't have a long term view - you're just talking your book because you want rates to rise. 'Long term' is shorthand for 'I'm wrong but might be right eventually'.


In my case my mortgage rate has been falling since 1997 and, for the last 8 years, has been 2.5% (or less). How long is your long term view? Is it long enough that everyone else will have paid off their mortgage before rates go back to 'normal'?

westernpromise

wotsthat wrote: »

How long is your long term view? Is it long enough that everyone else will have paid off their mortgage before rates go back to 'normal'?

I've been banging on about this for years. We've had 0.5% interest rates for well over 7 years and now they're lower still. You can lock in ten-year fixes at these levels which means that somebody who bought in 2009 can look forward to at least three quarters of the mortgage term, 17 years of 25, being at silly mortgage rates.

I really struggle to see that as anything other than "long term". Anyone deferring a house buy for longer than that must be that bloke MacLeod out of Highlander. If not they'll be dead.