London now in a permanently high house price environment?

Sailtheworld

pricedout_1 said:

Sailtheworld said:

pricedout_1 said:

Whilst it is not easy to predict the future, we still are going to try in order to decide a particular course of action. I take it the general lack of responses to this post means that most on here agree with the OP.... We are in a long term bull market which, it would appear, has many years to run?

What particular course of action would you take if you couldn't predict what will happen to house prices and, importantly, when these changes will occur? Why even make future price changes a factor in a buying decision when you can't predict them?

I didn't say "can't predict future house prices", I said it "isn't easy". That is different from making a judgement on favourable times to buy a property based on current economic conditions and likely economic trends. It is something that most people do at some level when making that decidsion.

Most people may well make some sort of house price prediction when deciding to buy a house but it doesn't mean they're any good at it. Why make a big decision like buying a house based on a flawed prediction that is completely out of your control?

The guys on HPC think they're not buying because a crash (as ever) remains around the corner. The evidence suggests they aren't very good as predicting either the size or timing of this crash.

A better approach would be to acknowledge this lack of predictive ability and admit the reality. i.e. it's not that they expect a crash but they're really fearful of a crash happening just after they buy. It maybe that they still don't buy but it's a more honest and positive decision.

Thrugelmir

Sailtheworld said:

Thrugelmir said:

pricedout_1 said:

About a decade ago we had the financial crisis. At the time the Bank of England printed money out of thin air (QE) and pushed central interest rates down to 300 year lows, but assured us all this was a temporary measure, and that they would go back up again. They have, as we all know, failed to do this. 

QE was introduced in an attempt to avoid Japanese style secular stagnation post their credit crash of the early 90's. Little to suggest that the policy has entirely worked. While stablisation of the financial system appears to be achieving it's objectives. Little direct impact on employment or output. As far as bringing the major developed economies out of stagnation doesn't appear to have been an effective policy tool. 

It's a rewriting of history to suggest it was intended to prevent a Japanese style secular stagnation. QE was an emergency measure and introduced with haste to try and prevent the GFC turning into a great depression. The only way to work out its effectiveness is to compare today with what would've happened if QE hadn't been implemented. Obviously that'll keep economists busy for decades.

As discussed at the G10 summit in May 2010.  Japan's problems originated from a credit crash. Keeping the global financial saystem afloat was merely the first step. 

Sailtheworld

Thrugelmir said:

Sailtheworld said:

Thrugelmir said:

pricedout_1 said:

About a decade ago we had the financial crisis. At the time the Bank of England printed money out of thin air (QE) and pushed central interest rates down to 300 year lows, but assured us all this was a temporary measure, and that they would go back up again. They have, as we all know, failed to do this. 

QE was introduced in an attempt to avoid Japanese style secular stagnation post their credit crash of the early 90's. Little to suggest that the policy has entirely worked. While stablisation of the financial system appears to be achieving it's objectives. Little direct impact on employment or output. As far as bringing the major developed economies out of stagnation doesn't appear to have been an effective policy tool. 

It's a rewriting of history to suggest it was intended to prevent a Japanese style secular stagnation. QE was an emergency measure and introduced with haste to try and prevent the GFC turning into a great depression. The only way to work out its effectiveness is to compare today with what would've happened if QE hadn't been implemented. Obviously that'll keep economists busy for decades.

As discussed at the G10 summit in May 2010.  Japan's problems originated from a credit crash. Keeping the global financial saystem afloat was merely the first step. 

Keeping the financial system afloat and preventing a recession from turning into a depression was the first step. It was an emergency action - a big experiment without much of a long term plan. I couldn't find the minutes of the G10 summit in May 2010 in which it was stated QE was introduced to avoid a 'Japan style secular stagnation' - a rewriting of history or a case of post decision justification.