50% rise in house prices needed before crash

sm9ai · 27 March 2006 at 10:26PM

NastyMatt wrote:

Why dread something that may or may not happen? Why worry what your house might be worth in 3 months time? There is nothing you can do about it.

I get the over whelming feeling that there is a group of forum members who want a crash so they can post "ahaha.. told you so". Doom merchants. If I was a FTB it wouldn't be the size of the mortgage that would horrify me it would be the posters on here!!

In my experience the people who want a crash are the people that missed out 10 years ago..

Or perhaps ftb's who cannot afford a house due to being born about 4-5 years too late. Hardly their fault is it?

Kruger · 27 March 2006 at 10:55PM

sm9ai wrote:

Or perhaps ftb's who cannot afford a house due to being born about 4-5 years too late. Hardly their fault is it?

I fall into the above boat, I was too young to catch the first boat, and I'd be lying if I said I was pleased that everyones houses were up in value, I'm waiting till the Buy to let brigade start offloading their houses if interest rates increase, other than that I'll have to wait for some relatives to die before I can afford to purchase anything half decent. ROLL ON THE CRASH.....

NSR2 · 28 March 2006 at 6:27AM

Kruger wrote:

I fall into the above boat, I was too young to catch the first boat, and I'd be lying if I said I was pleased that everyones houses were up in value, I'm waiting till the Buy to let brigade start offloading their houses if interest rates increase, other than that I'll have to wait for some relatives to die before I can afford to purchase anything half decent. ROLL ON THE CRASH.....

You are not alone:
http://money.guardian.co.uk/news_/story/0,,1741079,00.html

I've got an inheritance, and even with that you can't buy much.
My biggest concern with buying right now is who can I sell to, when I move out?

NastyMatt · 28 March 2006 at 9:45AM

sm9ai wrote:

Or perhaps ftb's who cannot afford a house due to being born about 4-5 years too late. Hardly their fault is it?

What a ridiculous argument for wanting a crash.

My Dad was born ooooh?!?! 29 years before me and he couldn't get a mortgage. They wouldn't even give him the time of day.. but he saved.. worked hard.. saved more.. worked 7 days a week and finally got a mortgage.

Lets look at my Grandfather? Again.. no chance of a mortgage... so what did he do?? Oh.. he worked hard.. saved...

I was not earning enough for a first place.. so guess what I did?

Is there a pattern emerging here????

Quite simply.. houses are NEVER reasonably priced. If they ever are.. I.. you.. Tassoti.. every one else will buy 3 places.

FTB's will always have it tough.

Instead of wanting the easy way out.. i.e. a crash.. to allow people to buy their dream home as FTB or second time buyers.. how about some sound advice on here (which there is) as how to achieve it in the long run?!?

The doom merchants/crash wannabe's seem to want it ALL.. now and easily. Life isn't like that.

Matt

sm9ai · 28 March 2006 at 10:06AM

Lol, thats funny.

van_persie · 28 March 2006 at 10:13AM

A little simplistic and romantic, Matt; I bought my first place with ease at around 3 times my annual salary at a time when property wasn't seen as such a good investment. Within 5 years, everyone was clamouring to get a piece of the pie and property prices had doubled.
It's all about timing in a cyclical market, I'm afraid, and those who got lucky (myself included) have been able to move up the 'ladder' a lot easier because of that first purchase. I applaud those who are prepared to wait for a price correction. It doesn't mean they expect 'something for nothing', as you seem to be suggesting. Rather it shows a fundamental knoweldge of economics and physics: what goes up...

Tassotti · 28 March 2006 at 10:19AM

I think it is dependent on the area. Granted in London, houses are completely overpriced for FTBs. Would probably be needing to earn 50K plus to get a studio flat in Camden.

However, if you are on a London salary, and live in commuter belt, then houses are easily affordable, and will be for some time yet (even at 50% increase)

That same 50K would get a decent 3/4 bed house in my local area.

So the average wage in London is around 36K (ish) from a report someone linked to :rolleyes:

But, I don't know any "average" people. My tube driver friend earns around 34K so he must be just below an "average" person. He is FTB and just bought v nice 2 bed house. Even if IRs rise to 12%, he could still afford the mortgage and living costs.

However, my other friend is a trainee manager at pizza hut earning 22K salary and is trying to buy in Chelsea!!! Think he might get a mortgage on a lock up shed.

NastyMatt · 28 March 2006 at 10:43AM

van_persie wrote:

A little simplistic and romantic, Matt; I bought my first place with ease at around 3 times my annual salary at a time when property wasn't seen as such a good investment. Within 5 years, everyone was clamouring to get a piece of the pie and property prices had doubled.
It's all about timing in a cyclical market, I'm afraid, and those who got lucky (myself included) have been able to move up the 'ladder' a lot easier because of that first purchase. I applaud those who are prepared to wait for a price correction. It doesn't mean they expect 'something for nothing', as you seem to be suggesting. Rather it shows a fundamental knoweldge of economics and physics: what goes up...

I'd say your knowledge of economics and physics is simplistic and romantic! Just because the market is up (in your eyes) does not mean it WILL come down. You clearly suffer from irrational pattern recognition!

I have no issue with people who predict a market adjustment based on fact or even complex and detailed market analyses, but all the crash mongers on here base all their arguments on their gut feeling.. or single page reports... or the even more laughable HPC brigade.. a website that has been predicting a crash for 3 years!!! ahaha.. how much has that cost people? 15% - 20% - 30%? Lets hope they'll refund all the lost £££ people have lost listening to those fools.

van_persie · 28 March 2006 at 12:16PM

NastyMatt wrote:

I'd say your knowledge of economics and physics is simplistic and romantic! Just because the market is up (in your eyes) does not mean it WILL come down. You clearly suffer from irrational pattern recognition!

Hmm. So you really don't think the market is overvalued at present? Do you think it's going to plateau at its current level till wage inflation catches up? What are your feelings on the world economy right now - the universal raising of rates and its threat to sterling?
Is the market not cyclical? Or are we entering a new paradigm in the market?
These are a few of the questions I'd like answered before admitting to having 'irrational pattern recognition.'

Talk to even the most bullish economists and they'll tell you the same. It's a question of whether we're going to see a correction brought about by any number of factors (higher IRs, unemployment, etc.) or stagnation as wage inflation picks up. Where's your money?

I gave you a perfectly good example of buying at the right time. Why not comment on that? I'd say my knowledge of economics were pretty sound - particularly as it's my job.

I have no issue with people who predict a market adjustment based on fact or even complex and detailed market analyses, but all the crash mongers on here base all their arguments on their gut feeling.. or single page reports... or the even more laughable HPC brigade.. a website that has been predicting a crash for 3 years!!! ahaha.. how much has that cost people? 15% - 20% - 30%? Lets hope they'll refund all the lost £££ people have lost listening to those fools

.

You're quite right that people shouldn't form views based on one-page articles, whether they be bullish or bearish. But to scorn and mock them for making a decision to wait and see (and for visiting a website!) based on sound research is simply cruel. And as for fools, remember the 'greater fool' theory - it's never been more applicable than right now, IMHO...

NastyMatt · 28 March 2006 at 12:50PM

Van persie.. as I have answered all your questions before in previous posts I will not bore you/everyone else with going over old ground.

You have made your opinions known.. and I look forward to you sending me your house details when it is up for sale at Christmas in time for the market crash you are predicting next year.. i.e. putting your money where your etc

Matt

P.S. "Talk to even the most bullish economists and they'll tell you the same" - I have... they didn't... end of.

50% rise in house prices needed before crash

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