Coronavirus effect on property markets?

JamesN

I think the biggest impact this will have is a fall in interest rates to help stabilise the economy so if anything that'll outweigh any oversupply from probate houses coming onto the market.

silvertooth

GDB2222 said:

silvertooth said:

Most governments should have acted quicker

containment has now failed

doesnt mean they shouldn’t try to reduce the R0 now the cat is out of the bag 

The R0 of covid19 is above 7 meaning for everyone who gets it on average infect another 7 people. And then those 7 infect another 49 and so on, it grows exponentially 


if the governments take measures like China has done then they can get that R0 down to under 2, so for everyone infected only 2 more get it and then those two infected only 4, then those 4 only 8 and so on


but for the UK to do the same as China they need to stop everyone going to work and print trillions more pounds to pay companies to keep paying their employees even though they are not going to work, just the same as China is doing

Where do you get an R0 of 7 from? WHO reports around 2.5.

It’s 2.5 in China when nobody goes to work or school and strict quarantine lockdown. 

Estimates are more than 7 before the lockdown of China which is what we are right now. Around 27 days incubation period so I wouldn’t be surprised if the average is way more than 7 if no restrictions are yet imposed 

silvertooth

MobileSaver said:

gfplux said:

With large drops in share prices what happens to liquidity?
if there is no money to lend where do you go for your mortgage?

That, of course, is one of the fundamental flaws in the Crashy Time and HPC cult's thinking. In their fantasy world, house prices crash but everything else stays the same so their savings/investments are not affected, their ability to get cheap credit is not affected, banks only ask for small deposits and the number of properties on the market is not affected...

I don’t think anybody thinks that.

everything will go down together with the looming global financial crisis brought on by this pandemic 

silvertooth

movilogo said:

In their fantasy world, house prices crash but everything else stays the same so their savings/investments are not affected, their ability to get cheap credit is not affected, banks only ask for small deposits and the number of properties on the market is not affected...

In a price crash situation number of properties will be more than demand. So this is drive down price further.
Savings will stay as is. Those with high savings/deposit will be in a better position.
For most buyers, raising deposit is the problem (when they are not selling their house to move up ladder). So, those with good savings and not in chain will indeed be better of (as long as they having some ongoing income from job etc. to ensure they can meet monthly mortgage payment going forward).

I still think this is too optimistic 

what I can see is a total collapse of the global financial system later on this year

it will be brought about by massive currency abuse because governments will type in trillions of units of currency to try to bail out banks right down to smaller companies who will all be shut down due to the crisis

listen to what Clif High predicts and you will get the picture of what the world is facing

buying a cheap house will be the last thing on peoples minds and nobody will be paying rents or mortgages just like it is in China right now

Thrugelmir

Both Indonesia and India now have confirmed cases. Containment is getting increasingly difficult. 

silvertooth

JamesN said:

I think the biggest impact this will have is a fall in interest rates to help stabilise the economy so if anything that'll outweigh any oversupply from probate houses coming onto the market.

That was true a decade ago when they had some room

we are already at near zero 300 year low interest rates so there isn’t that much room to cut unless they go negative IR

all mortgages and debts get paid interest on their loans instead of getting charged. This is a last ditch stupidity attempt to save the markets but it’s obviously doomed to failure

silvertooth

movilogo said:

So far fatality is mostly within old people. If this becomes pandemic then many old people could die and market will flood with properties.
Whether economy will be able to deal with is complex scenario, that's a different question entirely.

It’s not just old people though, anybody could prove fatal from the virus.

we are told the fatality rate is pretty low but something doesn’t seem right. Why have China gone to such extreme measures if it’s only a bit worse than the flu

JamesN

silvertooth said:

JamesN said:

I think the biggest impact this will have is a fall in interest rates to help stabilise the economy so if anything that'll outweigh any oversupply from probate houses coming onto the market.

That was true a decade ago when they had some room

we are already at near zero 300 year low interest rates so there isn’t that much room to cut unless they go negative IR

all mortgages and debts get paid interest on their loans instead of getting charged. This is a last ditch stupidity attempt to save the markets but it’s obviously doomed to failure

I don't think it'll go negative but do think it'll drop .25 base points. Either way I don't see house prices going up much which is good as we are selling up to go into rented whilst we look for a new place in a different area.

Thrugelmir

silvertooth said:

movilogo said:

So far fatality is mostly within old people. If this becomes pandemic then many old people could die and market will flood with properties.
Whether economy will be able to deal with is complex scenario, that's a different question entirely.

It’s not just old people though, anybody could prove fatal from the virus.

we are told the fatality rate is pretty low but something doesn’t seem right. Why have China gone to such extreme measures if it’s only a bit worse than the flu

Define a bit worse. 

Sailtheworld

The data's getting a bit better. Mortality rate of between 0.05% and 4% (so the data still has some way to go) and best guess of 0.9% according to researchers. It's very clear now that the vast majority of deaths will occur in those over 65 years old and those with existing health conditions.

Still a concern that there's a huge under reporting which is to be expected. Within the hysteria it needs to be remembered that for most people the symptoms are quite mild and nothing more than a couple of days of feeling rough. Probably not enough to stop you going to work and certainly not sufficient to risk not getting paid by self isolating.

The virus itself is just picking off those who weren't long for the World anyway so the economic impact will be down to the attempt to slow the spread of the disease. 

I'm fed up of the media circus. The BBC have had the same crew outside the Tenerife hotel for ages now (just in case anyone was struggling with what the outside of a hotel looked like. It's still a human interest story,