50% house price falls

bigmig

I'm no expert in the economics of the housing market, but to me the basic laws of supply and demand seem to go a long way to ensuring that house prices will not "crash", although there may be price falls which don't constitute a crash:

The main factors to me appear to be:

- a large increase in inward migration to the UK; and
- a large increase in divorce/seperation etc, resulting in lower household occupancies and more demand for housing.

This has been coupled with an inadequate growth in the supply of housing un the UK, and thus prices increase.

of course there are several other factors (unemployment, interest rates, global economic performance etc), but to me i don't think a crash is possible due to the basic supply and demand problem.

Personally I own a house but rising prices don't benefit me, in fact it may be the opposite. If i want to trade up to a larger house then the gap between my current house price and the new house would have grown along with the market and thus I lose out.

I don't think it's fair at all that the younger generation can't afford to buy a house, whilst a bunch of fat cats are getting richer daily by owning a large number of properties.

Turnbull2000

bargainbarmy wrote: »

I'm really sorry to have to say this to you CarolT but you are talking through your proverbial. I am asurveyor etc etc

Having a dull day at work, so thanks for the parody to cheer me up :rotfl:

carolt

What makes you think I live in a council house? Wish I was so lucky - they're like gold dust...

Of course property markets have crashed by 50% and more - for a property 'professional' you certainly don't seem to know much about property prices. I appreciate that Japan is not England, but who could say what happened to their property prices couldn't happen here? Or what about the US? Am I imagining current price falls there too? Is the US really so different to the UK? No - before you rush to correct me, of course they haven't yet seen falls of 50% - but noone, apart from YOU is claiming they can read the future and know EXACTLY how much property prices will fall by, either here or there.

I think it's a brave man who would risk his shirt on the current market - I'm certainly not prepared to. If you want to, go ahead, noone's stopping you.

I'm more than happy to have a gentleman's (and lady's) bet with you that the market will fall more than 5% - if either of us remember, we can meet here on these boards in a year or two, say, and either I can laugh you and your vested interest out of existence or I can bow humbly to your superior knowledge and experience...

Still doesn't make any sense for me to buy though, contrary to what you suggest - rent is so much cheaper than a mortgage that far from rent being dead money, it's a huge saving on what mortgage interest payments would be. Thus by NOT buying, I am saving about £300+ a month at the moment - not to be sniffed at.

Out of interest, the fact that you would be likely to be out of a job if the market crashes doesn't have ANYTHING to do with your professed 'professional' opinion does it? The words 'turkey' and 'Christmas' are coming to my mind!!!!........:rolleyes:

dolce_vita

bargainbarmy wrote: »

I am asurveyor and know the trends of the market inside and out.

:rotfl::rotfl::rotfl:

My advice to you is to buy something, anything, possibly not even for you to live in but to rent out. You could even continue to live in your council house butat least you would have a foothold on the market.
No disrespect but I think you are making excuses for yourself why you haven't bought yet. You know you have missed the boat and you are hiding behind this fact by saying you think the market is going to crash. No market has crashed by 50% ever. !

Ignore this guy.

Not only has he a vested interest in continually talking up the market, he is also obviously a fvcking idiot.

It is people like him in his profession that are partly responsible for this mess we find ouraselves in.

Doc_N

bargainbarmy wrote: »

I'm really sorry to have to say this to you CarolT but you are talking through your proverbial. I am asurveyor and know the trends of the market inside and out. there is not going to be a crash. Prices will level out , possibly drop 5% but that's it. If, as predicted, interest rates level and possibly go down , the market will get used to those rates and prices will go staedily up after say a year. The crash you are looking for is NEVER going to happen. You had better realise this now as all that money you are paying in rent is going down the drain and you will never see anything for it. My advice to you is to buy something, anything, possibly not even for you to live in but to rent out. You could even continue to live in your council house butat least you would have a foothold on the market.
No disrespect but I think you are making excuses for yourself why you haven't bought yet. You know you have missed the boat and you are hiding behind this fact by saying you think the market is going to crash. No market has crashed by 50% ever. The words 'wake up' and 'coffee' are coming to mind !!! Also unless your mum is some renowned property mogul I wouldn't base your facts that the market is going to crash just because she says so!!!

As a surveyor (estate agent?) maybe you're one of those who just before the last crash kept on saying there would be no crash. That's what estate agents and surveyors always do - because it's in their interests to keep prices high.

One thing estate agents cannot say (unless they've managed to get some crystal balls from somewhere) is 'the crash you are looking for is NEVER going to happen'. Such evidence as there is suggests that it is already starting to happen.

Generali

bargainbarmy wrote: »

I'm really sorry to have to say this to you CarolT but you are talking through your proverbial. I am asurveyor and know the trends of the market inside and out. there is not going to be a crash. Prices will level out , possibly drop 5% but that's it. If, as predicted, interest rates level and possibly go down , the market will get used to those rates and prices will go staedily up after say a year. The crash you are looking for is NEVER going to happen. You had better realise this now as all that money you are paying in rent is going down the drain and you will never see anything for it. My advice to you is to buy something, anything, possibly not even for you to live in but to rent out. You could even continue to live in your council house butat least you would have a foothold on the market.
No disrespect but I think you are making excuses for yourself why you haven't bought yet. You know you have missed the boat and you are hiding behind this fact by saying you think the market is going to crash. No market has crashed by 50% ever. The words 'wake up' and 'coffee' are coming to mind !!! Also unless your mum is some renowned property mogul I wouldn't base your facts that the market is going to crash just because she says so!!!

I have an interest in bubbles and have read a lot about them (and been around for a fair few).

When people use phrases like "missed the boat", that screams 'bubble' to me!

On what basis do you say 'Prices will level out , possibly drop 5% but that's it.'?

You say, "No market has crashed by 50% ever. ". HK housing did (65%). Tokyo housing did (50%). Nasdaq did after the dot com bust (60% down). Dow Jones lost 89% of it's value 1929-32. Florida land lost virtually it's entire value in some cases after 1925.

You say, "unless your mum is some renowned property mogul I wouldn't base your facts that the market is going to crash just because she says so." I wouldn't debate economic history without doing my research first if I were you.

Turnbull2000

bigmig wrote: »

The main factors to me appear to be:

- a large increase in inward migration to the UK; and
- a large increase in divorce/seperation etc, resulting in lower household occupancies and more demand for housing.

This has been coupled with an inadequate growth in the supply of housing un the UK, and thus prices increase.

1. As a %, the effects of inward migration are negligiable - particularly combined with record emmigration.
2. Officially, divoroce/separation levels are falling.
3. Supply is plenty. As an example, I believe the % of unoccupied housing in Leeds is double figures.

What you've outlined is a tired and weak argument used to justify price increases resulting from sepculation and a credit frenzy.

tr3mor

bigmig wrote: »

supply and demand

Supply and demand isn't just about numbers of buyers and sellers. It's also about the prices people are prepared to pay.

Since the market is wholly controlled by what the banks are prepared to lend the traditional supply/demand model doesn't hold.

When the cost of mortgages rise the amount of money people are prepared to pay will shift to the left, i.e. decreased demand. Simultaneously, a number of individuals will be forced to sell at a lower price (not accounting for BTLers or repos), this will shift supply to the right.

Both a leftwards shift in demand and a rightwards shift in supply lead to a lower equilibrium price.

dannyboycey

bargainbarmy wrote: »

I'm really sorry to have to say this to you CarolT but you are talking through your proverbial. I am asurveyor and know the trends of the market inside and out. there is not going to be a crash. Prices will level out , possibly drop 5% but that's it. If, as predicted, interest rates level and possibly go down , the market will get used to those rates and prices will go staedily up after say a year. The crash you are looking for is NEVER going to happen. You had better realise this now as all that money you are paying in rent is going down the drain and you will never see anything for it. My advice to you is to buy something, anything, possibly not even for you to live in but to rent out. You could even continue to live in your council house butat least you would have a foothold on the market.
No disrespect but I think you are making excuses for yourself why you haven't bought yet. You know you have missed the boat and you are hiding behind this fact by saying you think the market is going to crash. No market has crashed by 50% ever. The words 'wake up' and 'coffee' are coming to mind !!! Also unless your mum is some renowned property mogul I wouldn't base your facts that the market is going to crash just because she says so!!!

This is an example of very dry sarcastic humour... right? This HAS to be a joke? Surely?

Either that or the poster has been sniffing glue.

Dead_Eye_Jones

carolt wrote: »

We rent a house (from long-term landlords - not likely to sell up as have little if any mortgage to cover)



when, as predicted, buy-to-let landlords sell up in droves.

Ive always been interested to note that posters always claim their LL is not going to sell - but everyone elses will. Surely we'd have one or two peeps going "actually im a bit worried about being booted out". But curiously no !

Just a passing observation!