RICS: worst set of figures since records began

Vincenzo

oldMcDonald wrote: »

More RICS members are reporting falls now than they did in 1989-92? Does anyone know if there is somewhere online you can compare / view RICS data?

I'm not doubting this news as it is good news for me and what I want to hear (!), but I'm interested in what the figures were back then.

Try this....

http://www.rics.org/Newsroom/Economiccommentary/market_surveys_archive.htm

Unfortunately the public access archive does not appear to pre-date 2004.

I have looked at some data going back to c. 1990 and it is true to say that less surveyors reported falls than rises as a ratio in the early nineties. I expect the reason being that the credit crunch affects (almost) everyone and does not necessarily discriminate in terms of local employment, job prospects, affordability etc, unlike the issues the UK faced in the '90s.

EdInvestor

!!!!!!? wrote: »

Under what circumstances, exactly, could there be a crash using your rose-tinted view of the housing market?

Last time if you remember, most with a mortgage were on the SVR and it went up to 15%.from around 9% so everyone was affected by rocketing interest rates. There was also an economic recession and people lost their jobs.There was little flexibility in the market - if you had to move for instance, you couldn't rent out your old home.

This time only a small minority of borrowers are experiencing unmanageably high interest rates, and the rise is nothing like as big. Ordinary debt is not affected by higher interest rates.Prices are rising, but food only uses around 7% of household income, and many people would make up any losses if they just curbed wastage or cut back on quality for a while. At this point there is little sign of job losses, and the property market itself provides far more flexibility to avoid forced selling.

The main "wild card" is how long the credit crunch lasts, but the stockmarket at least thinks the worst is over, though it's not yet filtered through to mortgages.. To my mind, most people are looking at stagnation/mild decline rather than crash: but as all property is local, some places and types of property will be worse affected than others, eg as we have all known for years, new build flats.

meanmachine_2

At the moment, food, fuel and utilities are accounting for approx 90% of my outgoings - and this % will only get higher as these costs increase.

EdInvestor, as others have said, why not take up a role in goverment? Like that lot, you geniunely seem to believe that we're in a golden age of stability, not in the early phase of a bust cycle.

And you seem to keep quoting the stock market as if that's a sign things are "back to normal".

Any stock remotely related to housing is in the toilet. Commodity and oil stocks are soaring. Er, I wonder why?

Oh yes, i know. INFLATION.

WTF?_2

EdInvestor wrote: »

Last time if you remember, most with a mortgage were on the SVR and it went up to 15%.from around 9% so everyone was affected by rocketing interest rates. There was also an economic recession and people lost their jobs.There was little flexibility in the market - if you had to move for instance, you couldn't rent out your old home.

This time only a small minority of borrowers are experiencing unmanageably high interest rates, and the rise is nothing like as big. Ordinary debt is not affected by higher interest rates.Prices are rising, but food only uses around 7% of household income, and many people would make up any losses if they just curbed wastage or cut back on quality for a while. At this point there is little sign of job losses, and the property market itself provides far more flexibility to avoid forced selling.

The main "wild card" is how long the credit crunch lasts, but the stockmarket at least thinks the worst is over, though it's not yet filtered through to mortgages.. To my mind, most people are looking at stagnation/mild decline rather than crash: but as all property is local, some places and types of property will be worse affected than others, eg as we have all known for years, new build flats.

We don't need interest rates as high as last time to cause a problem because the underlying debt is so much higher. Witness the squeals that 5.75% interest rates were 'too high' as people tried to service their debts. When you've borrowed maybe 100k or more to buy your FTB rabbit hutch then even small IR rises can wipe you out (compared to 30k back in the late 80s).

As for job losses, as has often been pointed out they are a lagging indicator. They'll come soon enough. IIRC the last big crash of the late 80s/early 90s started before the economy really faltered.

Stock markets: We're seeing a bear market rally supported heavily by inflation. If you pump lots of extra cash into the financial markets then of course the markets will seem to rise. Anyway, what does the market history look like since 2000? Did we ever even make it back to the levels of the peak before the dotcom burst?

adr0ck

meanmachine wrote: »

At the moment, food, fuel and utilities are accounting for approx 90% of my outgoings - and this % will only get higher as these costs increase.

.

i take it your mortgage free meanmachine and own your house outright?

you must eat very well indeed

can i come round for tea?

adr0ck

meanmachine wrote: »

Any stock remotely related to housing is in the toilet. Commodity and oil stocks are soaring. Er, I wonder why?

Oh yes, i know. INFLATION.

i think oil prices, food prices etc etc are shooting up mainly due to supply and demand

i.e. demand is getting bigger and bigger year on year and supply is getting smaller (failure in food crops etc)

i think these items will steadily get more and more expensive no matter what happens to interest rates, that is of course unless we can persuade the rest of the world not to live like us (that would be fair would'nt it?)

adr0ck

EdInvestor wrote: »

At this point there is little sign of job losses, and the property market itself provides far more flexibility to avoid forced selling.

.

there are quite a few job losses in the construction industry

it will be interesting to see how this affects the rest of the economy when it filters through in the next 3-4 months

adr0ck

EdInvestor wrote: »

as all property is local, some places and types of property will be worse affected than others, eg as we have all known for years, new build flats.

totally agree with that

anyone who bought a flat in the past 5 years.......doh

WTF?_2

adr0ck wrote: »

i think oil prices, food prices etc etc are shooting up mainly due to supply and demand

i.e. demand is getting bigger and bigger year on year and supply is getting smaller (failure in food crops etc)

i think these items will steadily get more and more expensive no matter what happens to interest rates, that is of course unless we can persuade the rest of the world not to live like us (that would be fair would'nt it?)

Oil prices will definitely trend higher in the long term - and food will follow as modern agriculture is so dependent on oil and natural gas.

However, the current levels of pricing are largely a result of inflation and don't truly reflect supply and demand. Lots of new cash coming into the system to prevent the banks suffering the (deflationary) effects of their irresponsible lending plus all that cash from the good times still sloshing around.

Housing is a wash, the stock market is declining slowly overall so where does it go to get the best returns? Food and energy markets which were on the increase but are now in the grip of a speculative bubble. Quick, everyone get in whilst you can still get on the ladder. Prices can only ever continue to go up at these rates, so don't miss the train!

Like all bubbles these will burst sooner or later but we should remember that the property bubble lasted years longer than it should have done. Until the 'easy money' taps are turned off by the Central Banks and government economic policymakers we can expect this sort of situation to continue. In the meantime, God help us if there are serious food shortages or a bad problem with oil production/refining.

adr0ck

!!!!!!? wrote: »

Oil prices will definitely trend higher in the long term - and food will follow as modern agriculture is so dependent on oil and natural gas.

However, the current levels of pricing are largely a result of inflation and don't truly reflect supply and demand. Lots of new cash coming into the system to prevent the banks suffering the (deflationary) effects of their irresponsible lending plus all that cash from the good times still sloshing around.

Housing is a wash, the stock market is declining slowly overall so where does it go to get the best returns? Food and energy markets which were on the increase but are now in the grip of a speculative bubble. Quick, everyone get in whilst you can still get on the ladder. Prices can only ever continue to go up at these rates, so don't miss the train!

Like all bubbles these will burst sooner or later but we should remember that the property bubble lasted years longer than it should have done. Until the 'easy money' taps are turned off by the Central Banks and government economic policymakers we can expect this sort of situation to continue. In the meantime, God help us if there are serious food shortages or a bad problem with oil production/refining.

i agree with some and disagree with other bits (if you don't mind)

i think that food prices will continue to go up and up as demand outstrips supply, with global warming the situation will just get worse and worse as more crops fail etc (look at oz)