There will not be a crash

brit1234

daunker wrote: »

Those figures work out, that house prices have been rising steadily at 10% annual growth over that period. That doesn't sound as dramatic as 250%. The "house price crash" is a massive sensationalisation by the media and those with vested interests.

No its based on sound economics. Financial experts have been warning of this housing bubble for years its just the vested interest groups such as builders, property TV, estate agents, buy to let companies have drowned them out till now. The press have only cottoned on now as it is visibly happening and it is their job to report the news. Its not sensationalisms its just reality.

daunker wrote: »

The fact is that they are mostly praying for a price crash so they themselves can buy a property.

Yes that is true. I have put off buying for years knowing the market was unsustainable. In that time I have saved a large deposit.

Common sense suggests it was well overinflated when people were paying 8+ times salary for a basic 1 bed flat.

daunker wrote: »

There is considerable demand, any drop in prices will therefore be tempered. Provided the property you are looking at is in a decent area I think the downside will be limited. I think now is an excellent time to buy a property because of the fear factor you can negotiate discounts which I believe property will not actually reach.

Yes there is high demand but that doesn't affect the market if all those people can't afford prices. In reality prices are dictated by market lending conditions and not demand.

Crash!!!

poppy10_2

daunker

I purchased a property in 2003 when the property market was also supposedly also headed for a torrid time, I used this greatly to my advantage by getting a very good price. http://news.bbc.co.uk/1/hi/business/2509823.stm and there were many more articles on it at the time about how overinflated prices were, I'm sure if you can't recall a search would be productive.

Oh but of course you'll trot out that this isn't 2003, yes and it's not 1989 either!!

At the present time I'm making an investment decision now to purchase another property for 20% less than the value which similar properties were being sold for in winter 2007 it's in a superb location (central london) and is not a new build. I think the downside is very limited.

I'm a little concerned that blinkers have arisen regarding my post, and generic lines are being trotted out which we have all read and heard dozens of times before. At no point do I defend property prices. I am just saying that I feel that now is a good time to buy because fear has such incredible power that you can greatly discount future risk against current price which gives a superb cushion were a full blown "crash" to happen.

I've put up my thoughts and will let time play the story out.

chalkswindon

daunker wrote: »

I purchased a property in 2003 when the property market was also supposedly also headed for a torrid time, I used this greatly to my advantage by getting a very good price. http://news.bbc.co.uk/1/hi/business/2509823.stm and there were many more articles on it at the time about how overinflated prices were, I'm sure if you can't recall a search would be productive.

Oh but of course you'll trot out that this isn't 2003, yes and it's not 1989 either!!

At the present time I'm making an investment decision now to purchase another property for 20% less than the value which similar properties were being sold for in winter 2007 it's in a superb location (central london) and is not a new build. I think the downside is very limited.

I'm a little concerned that blinkers have arisen regarding my post, and generic lines are being trotted out which we have all read and heard dozens of times before. At no point do I defend property prices. I am just saying that I feel that now is a good time to buy because fear has such incredible power that you can greatly discount future risk against current price which gives a superb cushion were a full blown "crash" to happen.

I've put up my thoughts and will let time play the story out.

This year is an ideal time to buy in my view as well.

Let every panic and take low offers and continue listerning to the press giving it the big crash time will tell

phil_b_2

neverdespairgirl wrote: »

Actually, 10% per year for over a decade sounds pretty dramatic to me. Incomes haven't exactly gone up 10% a year, have they?

What has the average wage got to do with house prices?

Everyone seems to assume increases in house prices and wages should be proportionate and equal, and that they 'should' be able to easily afford a house. Why?

It makes perfect sense to me that as the population grows house prices will accelerate at a considerably greater rate that the average wage.

Generali

phil_b wrote: »

What has the average wage got to do with house prices?

Everyone seems to assume increases in house prices and wages should be proportionate and equal, and that they 'should' be able to easily afford a house. Why?

It makes perfect sense to me that as the population grows house prices will accelerate at a considerably greater rate that the average wage.

As incomes have risen the proportion spent on some essentials has dropped substantially (eg food has gone from an av of 30% of income to about 8%) so the proportion available to be spent on other things can rise (eg housing, holidays).

However, these can only be one-off shifts, not trends that last forever. If you do a simple compound interest calculation you can see that it's impossible for house prices to rise by more than incomes for any extended period as eventually things get way out of hand. Do the sums and you can see for yourself.

Dan:_4

I worry for those folk that have STR - This year may be the best chance to knock the asking price down a fair bit.

In 3 years time these people will be so envious of those that bought in 2008 when it was a buyers market.

Still, nevermind.

Conrad

Japan
Near 0% interest rates
Double the population density of the UK (low proportion of buildable land)
Low inflation
High employment

RESULT = Price decreased every year for 15 years once the market went rom bullish to bearish.

And all that without a worldwide credit crunch

poppy10_2

Dan: wrote: »

I worry for those folk that have STR - This year may be the best chance to knock the asking price down a fair bit.

In 3 years time these people will be so envious of those that bought in 2008 when it was a buyers market.

Still, nevermind.

Don't worry, we'll be OK

SquatNow

Dan: wrote: »

In 3 years time these people will be so envious of those that bought in 2008 when it was a buyers market.

In 3 years time the people that bought in 2008 will be living in work camps trying to pay back their negative equity.