"Housing Market Slumps"

BikingBud

GreatApe wrote: »

This is the 20 pages of debate condensed down to a few lines

Ape:..............BMWs are affordable for BMW buyers
CarpWind:...But not for nurses
Ape:..............It doesn't matter nurses are not needed for BMWs to be priced at BMW prices
CarpWind:...But nurses work hard and are good moral people
Ape:..............OK but BMW buyers earn/have enough money to buy BMWs at BMW prices
CarpWind.....Im not sure that is true, the median person has XXX income which is not enough to buy a BMW
Ape:..............Your figures do not include non earned income
CarpWind.....Ok non earned income exists but its not as much as you say
Ape:...............So what? BMW buyers irrespective of what you think and feel clearly today are paying BMW prices for BMWs
CarpWind.....The nurse can not buy a BMW she is a good moral important person
Ape:...............OK but what has that got to do with any of this
CarpWind......She should be able to buy a BMW as moving to buying a Ford is unjust the system is thus broken or in a bubble just you wait BMW prices will fall to Ford prices
Ape:............... I give up the nurse is a moral important person
CarpWind......Nobody said that

BMWs or any other expensive car have nothing to do with this:wall:

GreatApe

ukcarper wrote: »

To make clear what I mean by affordable I mean that people earning median earnings can get a big enough mortgage to buy.

Using your definition tells us nothing of the state of direction of the market

Kensington
2000....unaffordable
2001.....unaffordable
2002.....unaffordable
2003.....unaffordable
2004.....unaffordable
2005.....unaffordable
2006.....unaffordable
2007.....unaffordable
2008.....unaffordable
2009.....unaffordable
2010.....unaffordable
2011.....unaffordable
2012.....unaffordable
2013.....unaffordable
2014.....unaffordable
2015.....unaffordable
2016.....unaffordable
2017.....unaffordable

unaffordable by your definition does not say it is unsustainable or going to become affordable (by your definition)

So the next logical question to yourself should be, how can places stay unaffordable for 20 years in fact get more unaffordable each year

and if you ask that to yourself you might find that price is not set by your metric of median wage x mortgage multiple so what sets prices in Kensington or Fulham or Islington or anywhere else for that matter where you definition seems not to work not just today but for years?

ukcarper

GreatApe wrote: »

so we are back to ignoring the existence of wealth outside of a wage

I've posted the figure on Wheatley should wealth distribution over 50% have a total wealth of £250k which is mostly tied up in property and pensions. Obviously some people can buy because thier parents are wealthy enough to help them out but it's a minority.

ukcarper

GreatApe wrote: »

Using your definition tells us nothing of the state of direction of the market

Kensington
2000....unaffordable
2001.....unaffordable
2002.....unaffordable
2003.....unaffordable
2004.....unaffordable
2005.....unaffordable
2006.....unaffordable
2007.....unaffordable
2008.....unaffordable
2009.....unaffordable
2010.....unaffordable
2011.....unaffordable
2012.....unaffordable
2013.....unaffordable
2014.....unaffordable
2015.....unaffordable
2016.....unaffordable
2017.....unaffordable

unaffordable by your definition does not say it is unsustainable or going to become affordable (by your definition)

So the next logical question to yourself should be, how can places stay unaffordable for 20 years in fact get more unaffordable each year

and if you ask that to yourself you might find that price is not set by your metric of median wage x mortgage multiple so what sets prices in Kensington or Fulham or Islington or anywhere else for that matter where you definition seems not to work not just today but for years.

Ive never said its unsustainable in fact I think I've said the opposite.

economic

so what is this debate even about then????

ukcarper

economic wrote: »

both. because it doesnt matter in this debate about median income only.

Can you make it clear what point you are trying to make.

From what I can tell we both think that property is affordable to the well off people who can afford to buy and unaffordable to the people who currently can't and thats unlikely to change any time soon.

The only difference I can see is that I think it would be better if more people could afford to buy or at least rent reasonable accomadation at a price they can afford and you don't.

BikingBud

economic wrote: »

both. because it doesnt matter in this debate about median income only.

Not sure what that means.

Are you saying median income is irrelevant or that the comment being sarcasm or realisation is irrelevant in the argument because it is about median income?

GreatApe

ukcarper wrote: »

Ive never said its unsustainable in fact I think I've said the opposite.

I agree with you if we are to define unaffordable as 4.5x median single person wages then much of london is unaffordable.

But why should you be king to defining the meaning of a word used by everyone?

Why cant affordable be defined as, the median wages of a full time working couple in the top 60% of the local area who also have gifts and inheritences?

By your definition you would have to say 'london housing is unaffordable but can stay or even get more unaffordable by people affording to buy unaffordable homes'. By my defintion you could simply say 'London is affordable'.

GreatApe

ukcarper wrote: »

From what I can tell we both think that property is affordable to the well off people who can afford to buy and unaffordable to the people who currently can't and thats unlikely to change any time soon.

From what I can tell we both think that BMWs are affordable to the well off people who can afford to buy and unaffordable to the people who currently can't and thats unlikely to change any time soon.

The only difference I can see is that I think it would be better if more people could afford to buy at a price they can afford and you don't.

No, What I am saying is that BMWs will be priced at BMW prices and if you want a BMW you are going to have to earn BMW wages. If you earn Ford prices you are going to have to buy a Ford.

London is now the BMW
Birmingham (and about 80% of the UK) is the Ford
There is no realistic way to buy BMWs at Ford prices

GreatApe

or better yet let neither of us use the word 'affordable'

You can say, London is unaffordable to single persons on median incomes buying the average home

I'll say, London is affordable to the typical London buyer who has more than a single median income

and we can both agree.
The next step is deciding the direction of price movements in London. Clearly your view adds no value to this as we have seen a place can be unaffordable and stay unaffordable for decades and even get more unaffordable. My view needs an analysis of what the future typical London buyer might be and have and I think its likely that they will have higher incomes much higher inheritences and gifts and other capital and thus the direction is not downward in the medium to long term