Housing market continues to slow....

nelly_2

rach83 wrote:

Has anyone every noticed that the media are only interested in boom or bust. The media are not interested in normal market conditions and thats the reason why it gets everyone talking! lol

If the media said "actually nowt much happend today" then no one would read/watch the media

Flynt_2

So kenny are you going to sell?
I spoke to a adviser last night, he said professional investors that he knew had been selling their properties for last 18 months

deemy2004

Yep most people are completely in tunnel vision mode.. they just cannot comprehend that house prices, the credit bubble is about to BURST !

The problem is what effect will the bursting of the credit bubble have ?

If leads to inflation than nominal house prices may not fall much i.e. maybe 20% or so.

if it leads to deflation.... which apparently is what the bond market is pricing in... then we're talking about 50% PLUS falls in house prices !

Things are so ridiculous, that even now, even today... people are blind to the most reliable indicator of excessive house prices and that is the house price / earnings graph which is off the chart ! Still they say it is different this time and that graph is for the past...

In a couple of years that graph will be trotted out on a dailyt basis to show why house prices have fallen and as an indicator of where they are likely to go i.e. to below X3 earnings..... from the present ? 5.5X earnings ?

I am trying to figure out what adjustments to make to my investment portfolio i.e. shift from growth stocks to utilities and get more fixed interest bonds.... or index linked bonds... as inflation outlook is unclear...

bridiej

I've merged these two threads as it seems daft having two separate ones with the same discussions going on.....

ReportInvestor

MFG

MoneyExtra May mortgage searches were for lower amounts than any time since January

More grist to the mill. The attitude of these potential buyers may impact further down the line.

meanmachine_2

http://www.naea.co.uk/the_naea/general_public/latest_news_details.asp?id=148&PageNo=1

First time buyers have vanished as well.

I have to ask, if any houses are still selling at the moment, who to?!!

Oh, and a 0.25% cut in int rates isn't going to help anyone. Not that it's going to happen anyway.

Pal

That's a bizarre one isn't it? Estate agents want a cut in interest rates in order to help house prices and so "help the economy".

How does people borrowing to pay more for houses help the economy as a whole? The main beneficiaries are the mortgage lenders, and their increased profits only come through over the next 25 years - not immediately. Most people in the property chain don't benefit from the increase in value of their property. It is only the one person at the top who is selling up to rent, through death or to emigrate who benefits from the house price rises, so that doesn't really help the economy either.

So estate agents are basically saying that the MPC should cut interest rates so that the house price "feel-good" factor will start again, encouraging more people to borrow even more money against the paper profit they have made in their house. This spending will then provide a short term boost to the economy, at the expense of its long term future. The money has to be paid back at some point!

meanmachine_2

I was watching that Property Chain last night - what a boring, tedious programme.

I was fuming when Idiot Allsop claimed that the homeowners had made £130K PROFIT in just three years. How spiffing.

And by how much had the house that they now wanted to purchase gorn up, old gal? Yup, by £130K (minimum).

So the only people who had made a profit were Allsopp and her scummy agent friends.

And who has to pay £130K MORE to keep this pyramid going? Yes, FTBers, the people least able to pay these exhorbitant prices.

joemardo1

Well I suppose the price rises couldn't go on forever. Just been looking at prices reached for a ordinary enough road that I used to live in, in London £600.000+ for ordinary 3 storey terrace house. Madness, who can afford to pay prices like this (unless you have a similar priced property to sell) certainly not first time buyers, even at 1/3 of that price. I paid £60k for my bungalow In N Ireland in 96 now worth about £125k so that is probably a more realistic rise in price, not that I want to sell, its a home to live in!

Pal

They have to pay £130k more plus the interest on that money, so the other winners are, of course, the mortgage lenders.