Has the market peaked?

VfM4meplse

Opinions, please.

As a rudimentary economist I'd say it's too early to tell, but the initial signs are there. That's by combining 3 different datasets [STRIKE]in my head [/STRIKE]on the back of an envelope. What say you?

LdnFtB

On the basis of what I'm hearing from professionals who work in property and construction I'm inclined to agree. Had drinks with an architect friend last night who works for private residential clients and property developers, all over the country. She said they're all struggling to sell for profit and are resigning to making either their costs or are looking to shift it for a small loss before it becomes even greater.

Another mate works for a real estate investment trust who do commercial office builds and institutional build to rent, and he said they stopped breaking ground on new projects two years ago as they forecast an oversupply. They've finished all their buildings and have leased it all to long term tenants so they're going to shift to management mode while the market turns.

It's definitely making me reconsider buying a flat right now, especially when you see headlines like this: telegraph co uk/personal-banking/mortgages/house-prices-falling-many-regions-should-anyone-take-95pc-mortgage/

MobileSaver

VfM4meplse wrote: »

Has the market peaked?

No. Next question?

[There is a 99.9% certainty that house prices will be higher 11 years (the average length of time owner occupiers stay in any one home) from now than they are today.]

ruperts

London - maybe, although it's more likely to be a quick 'pause for breath'.

Elsewhere - no. In many places they've barely reached the 2007 peak yet never mind a new one.

Anecdotally, I know of at least one major house builder who is still pressing ahead at pace because their profits are sky high.

juniordoc

Whilst salaries are stagnant, how can prices go up? Income multiples are the highest on record, and lenders are getting stricter, not more liberal.
An interest rate rise now looks less than 12 months away, these are not conditions that will promote house price rises so yes, I would say they are at a peak.

gettingtheresometime

LdnFtB wrote: »

On the basis of what I'm hearing from professionals who work in property and construction I'm inclined to agree. Had drinks with an architect friend last night who works for private residential clients and property developers, all over the country. She said they're all struggling to sell for profit and are resigning to making either their costs or are looking to shift it for a small loss before it becomes even greater.

Another mate works for a real estate investment trust who do commercial office builds and institutional build to rent, and he said they stopped breaking ground on new projects two years ago as they forecast an oversupply. They've finished all their buildings and have leased it all to long term tenants so they're going to shift to management mode while the market turns.

It's definitely making me reconsider buying a flat right now, especially when you see headlines like this: telegraph co uk/personal-banking/mortgages/house-prices-falling-many-regions-should-anyone-take-95pc-mortgage/

We're just thankful that we voted for Brexit - I doubt we could have coped if we hadn't !

parking_question_chap

juniordoc wrote: »

Whilst salaries are stagnant, how can prices go up? Income multiples are the highest on record, and lenders are getting stricter, not more liberal.
An interest rate rise now looks less than 12 months away, these are not conditions that will promote house price rises so yes, I would say they are at a peak.

There still are more people wanting to buy than affordable properties to purchase.

Whilst wages are not going up, you will probably find that the people buying at the bottom of the chain are generally now only the ones that have lived with parents to save a deposit, or have had financial backing from parents to buy (therefore needing a smaller mortgage). There are still plenty of people who can afford to buy on this basis, hence prices still rise.

If the prices keep rising further and you get to a point where you have even the above people unable to afford houses, then prices will start to come down again.

MobileSaver

juniordoc wrote: »

Whilst salaries are stagnant, how can prices go up?

Take a look around you; the prices of lots of things go up irrespective of whether wages go up, down or stay the same. House prices over the mid to long term will go up simply because of the fundamental economic principle of supply and demand, unless there is a huge influx of new properties about to come on to the market that we don't yet know about?

juniordoc wrote: »

so yes, I would say they are at a peak.

Do you genuinely believe in your heart of hearts that house prices will be lower in 11 years time than they are today?

Cakeguts

Where in Manchester? No I don't think so. Prices in the North West are still rising.

juniordoc

No prices may well be higher in 11 years but i think in the short term they have peaked. The supply of buyers with parents who can gift a deposit or accomodate their adult children is also limited.

alchemist.1

Not outside London they havent.

At best, a pause whereby sellers are holding fire to see what happens and there are not enough properties for buyers (especially first time buyers) to buy.

Its a question of whether they want to pay rent for another couple of years to see if prices drop (which will be counteracted by the cost of paying the rent).