How low will property go?

Windofchange

ilovehouses wrote: »

Bit of anecdotal. I was interested in a house last summer - it went for £265k. It's backup for sale at £310k and the only difference is they've made a better job of the photos.

They won't get £310k but talk of falling prices isn't the reality I'm seeing. I've been actively looking for a 'forever' home for a couple of years - absolutely nothing is selling below previous sold prices.

Except:

http://www.cityam.com/269075/one-third-london-house-prices-have-been-reduced-weve-ranked

The-Joker

Jack_Johnson_the_acorn wrote: »

The avg property price is still at an all time high. If they drop 20% would that even take them back to 2014 levels?

but would they stop falling or carry on after 20% down?

Koldweather1

Lets just see them dropping even 1% YoY first before you get carried away with the talks of 20%. Its pretty clear that whilst the powers that be do want to stop any more rampant increases in house prices, its also clear that all of tptb don't want to send them to the other extreme and drop too rapidly.

I suspect the end outcome for the govt is to let inflation/wage growth hopefully correct the gap without having to really drop prices much if at all, thus preventing negative equity but also giving the younger generation a better shot at getting on the ladder, thus a win-win for all but those who banked on huge HPI to fund their pensions.

chucknorris

The-Joker wrote: »

but would they stop falling or carry on after 20% down?

To most people it doesn't matter, in 2008 our property values fell by about £1m, so what? They were still up about £2m from when we bought them. Today they are up by about £4m from when we bought them. Although I must add, it is starting to matter to me now, because I intend to sell in the short term (5 years?), so I am watching the market, but if it happens, I always have the option of keeping them a bit longer. But to most home owners, it doesn't really matter.

caronoel

Koldweather1 wrote: »

Lets just see them dropping even 1% YoY first before you get carried away with the talks of 20%. Its pretty clear that whilst the powers that be do want to stop any more rampant increases in house prices, its also clear that all of tptb don't want to send them to the other extreme and drop too rapidly.

I suspect the end outcome for the govt is to let inflation/wage growth hopefully correct the gap without having to really drop prices much if at all, thus preventing negative equity but also giving the younger generation a better shot at getting on the ladder, thus a win-win for all but those who banked on huge HPI to fund their pensions.

The government has no interest in a house price crash and, as we saw in 2008 and 09, will do everything they can to prevent it.

From a purely selfish point of view, a HPC would represent a good buying opportunity for me.

I bought a BTL in early 2009 for 250k, now worth just under 500k and the lovely tenants have paid off a goodly chunk of the mortgage for me in that time.

Another temporary crash could be a lucrative buying opportunity for serious investors.

GreatApe

chucknorris wrote: »

To most people it doesn't matter, in 2008 our property values fell by about £1m, so what? They were still up about £2m from when we bought them. Today they are up by about £4m from when we bought them. Although I must add, it is starting to matter to me now, because I intend to sell in the short term (5 years?), so I am watching the market, but if it happens, I always have the option of keeping them a bit longer. But to most home owners, it doesn't really matter.

The average home transacts roughly once every 25 years. Therefore anyone selling even into a market that has crashed is typically selling a house they bought 25 years ago.

So the hpc cheerleaders hoping landlords and owners make a huge loss are stupid. Houses don't crash in nominal terms over the typical 25 year period of ownership if for no other reason than the currency is set up to inflate 2-3% annually and that really adds up over a 25 year period.

The best time to buy your own home is always now, yes that sounds silly but it will hold true for 95% of people 95% of the tine. Those are not odds I'd bet against.