Is the bubble about to burst?
Discussion
Rate rises will have an impact on all sorts of finance agreements, not just housing. I have not got the stats to hand, but quite a lot of "perceived" wealth has been taken out of housing over the last 4yrs - whether to finance a new extension, which in theory adds more value, or a shiny new X5 and a RR Evoque on the drive for her.
Like it or hate it, the whole UK economy is underpinned by the housing sector. Rates go up, confidence evaporates, prices collapse, the mkt is flooded with "cheap" housing, but what makes "experts" like PorscheGT4 think that banks would be willing to lend at a lower price?
Another thing - Sterling has moved against the EUR from about 1.18 to 1.41 over the last 12mths. An expectation of a rate rise is already priced in, but if it is to really materialise, I think there is a room for it to appreciate even higher. What is it going to do the export based industries? OK, the UK is a services based economy, but if JO is to have any hope of keeping the recovery in the job mkt, every little from the manufacturing sector helps. Lastly, think about his grand idea about helping the rest of the country recover on a more sustainable basis - appreciating FX and higher rates will not help. Just look at the Swiss...
Moreover, at his favourite BoE base rate of 5% scenario how much would be the monthly repayment on a £360,000 2-bed London flat? From memory, my first 100% IO mortgage back in 2004 worked at about £1800pm. How many people can afford to pay this - London excepted? But don't worry, PorscheGT4 knows everything - we are all doomed and I may go and weigh in my cars as soon as possible as they will be worth next to sfa. Oh, and they are all very long geared, except the GT3
hence even more rubbish...
Like it or hate it, the whole UK economy is underpinned by the housing sector. Rates go up, confidence evaporates, prices collapse, the mkt is flooded with "cheap" housing, but what makes "experts" like PorscheGT4 think that banks would be willing to lend at a lower price?
Another thing - Sterling has moved against the EUR from about 1.18 to 1.41 over the last 12mths. An expectation of a rate rise is already priced in, but if it is to really materialise, I think there is a room for it to appreciate even higher. What is it going to do the export based industries? OK, the UK is a services based economy, but if JO is to have any hope of keeping the recovery in the job mkt, every little from the manufacturing sector helps. Lastly, think about his grand idea about helping the rest of the country recover on a more sustainable basis - appreciating FX and higher rates will not help. Just look at the Swiss...
Moreover, at his favourite BoE base rate of 5% scenario how much would be the monthly repayment on a £360,000 2-bed London flat? From memory, my first 100% IO mortgage back in 2004 worked at about £1800pm. How many people can afford to pay this - London excepted? But don't worry, PorscheGT4 knows everything - we are all doomed and I may go and weigh in my cars as soon as possible as they will be worth next to sfa. Oh, and they are all very long geared, except the GT3
hence even more rubbish... Edited by Cheburator mk2 on Monday 10th August 16:45
An interesting read "the 18 year property cycle" as I'm sure elements apply as much to the current car market as the property market!
We've hit media attention, enthusiasm of the general public and signs are that greed is here......
We've hit media attention, enthusiasm of the general public and signs are that greed is here......
Cheburator mk2 said:
Rate rises will have an impact on all sorts of finance agreements, not just housing. I have not got the stats to hand, but quite a lot of "perceived" wealth has been taken out of housing over the last 4yrs - whether to finance a new extension, which in theory adds more value, or a shiny new X5 and a RR Evoque on the drive for her.
Like it or hate it, the whole UK economy is underpinned by the housing sector. Rates go up, confidence evaporates, prices collapse, the mkt is flooded with "cheap" housing, but what makes "experts" like PorscheGT4 think that banks would be willing to lend at a lower price?
Another thing - Sterling has moved against the EUR from about 1.18 to 1.41 over the last 12mths. An expec'tation of a rate rise is already priced in, but if it is to really materialise, I think there is a room for it to appreciate even higher. What is it going to do the export based industries? OK, the UK is a services based economy, but if JO is to have any hope of keeping the recovery in the job mkt, every little from the manufacturing sector helps. Lastly, think about his grand idea about helping the rest of the country recover on a more sustainable basis - appreciating FX and higher rates will not help. Just look at the Swiss...
Moreover, at his favourite BoE base rate of 5% scenario how much would be the monthly repayment on a £360,000 2-bed London flat? From memory, my first 100% IO mortgage back in 2004 worked at about £1800pm. How many people can afford to pay this - London excepted? But don't worry, PorscheGT4 knows everything - we are all doomed and I may go and weigh in my cars as soon as possible as they will be worth next to sfa. Oh, and they are all very long geared, except the GT3 hence even more rubbish...
I have no crystal ball here and we all know us economists simply use logic and common sense with a few long words thrown in to justify the consultancy fees, but I think the interest rate / housing market is reasonably well understood.Like it or hate it, the whole UK economy is underpinned by the housing sector. Rates go up, confidence evaporates, prices collapse, the mkt is flooded with "cheap" housing, but what makes "experts" like PorscheGT4 think that banks would be willing to lend at a lower price?
Another thing - Sterling has moved against the EUR from about 1.18 to 1.41 over the last 12mths. An expec'tation of a rate rise is already priced in, but if it is to really materialise, I think there is a room for it to appreciate even higher. What is it going to do the export based industries? OK, the UK is a services based economy, but if JO is to have any hope of keeping the recovery in the job mkt, every little from the manufacturing sector helps. Lastly, think about his grand idea about helping the rest of the country recover on a more sustainable basis - appreciating FX and higher rates will not help. Just look at the Swiss...
Moreover, at his favourite BoE base rate of 5% scenario how much would be the monthly repayment on a £360,000 2-bed London flat? From memory, my first 100% IO mortgage back in 2004 worked at about £1800pm. How many people can afford to pay this - London excepted? But don't worry, PorscheGT4 knows everything - we are all doomed and I may go and weigh in my cars as soon as possible as they will be worth next to sfa. Oh, and they are all very long geared, except the GT3
hence even more rubbish... Edited by Cheburator mk2 on Monday 10th August 16:45
The Canadian slick dude who like an evil genius controls interest rates wants desperately to put them up...but he has stated inflation should run at 2% which I think it does not at present, low inflation is good, but very low sustained inflation is bad, interest rates up inflation down and visa versa, so economic theory says ......if inflation is below target reduce interest rates, give the peasants more money and the price of things will inflate....ermmm so what do you do when interest rates are 0.5%.......slick dude doesnt know, he knows higher interest rates will encourage foreign dudes to stick more ££ in the UK but then higher interest rates could be bad for the common dude that gets worried about mortgage costs and starts saving....
So what will he do, he says he will start with a 0.5% increase at the end of the year, will he? Well unless inflation kicks the 2% I can't see it and besides they need a more than 50% vote from members and I think the last vote was way short of that, and beside slick dude studied economics for 10+ years so Hes brain washed to follow the theory.......
So my prediction is no rise this year and 0.5% next, and as for Euro exchange rate, well that's back where it should be 1.1/1.2 to the good old ££ was always a piss take, housing market in the UK especially London is driven by many many different things, not least the Russian and Greek money coming in....
So what does that have to do with the price of a porsche 964, not a lot I suspect........I think that market will sort its self out regardless
A lot of "collectable " Porsche cars are now bought not by enthusiasts , I know of some of the best cars out there ( Aircooled RS ) that the owners have not even seen ( nor do they want to ) ..... on trickle and a start up once a month ..
As they say when your Dentist tells you to get into classic cars ...
As they say when your Dentist tells you to get into classic cars ...
g7jhp said:
An interesting read "the 18 year property cycle" as I'm sure elements apply as much to the current car market as the property market!
We've hit media attention, enthusiasm of the general public and signs are that greed is here......
Very interesting and makes perfect sense We've hit media attention, enthusiasm of the general public and signs are that greed is here......
NJH said:
Sorry no they haven't. When I got into Porsche about 15 years ago pre 74 cars apart from the S where in the bottom of the market along with cars like the 924S. I found an old Classic & Sports Car in our house move that had a comparison between a T I think it was, 924 and MGB under the line that you could buy all these mint for a few grand. Nobody wanted them as back then everyone and I mean everyone believed newer was better, up to the 993 they had a point as one could easily believe that but what came after that period cars from all makes definitely lost something.
In 1995 I sold my 2.4E for £9500 to Keith Thomas (where are you now, Keith?). I then bought a 3.2 Carrera cab for £12k. Pre impacts were rarely to be found below that price if in good condition. And I have followed their prices since.But here's a comparison. I spent £5,500 on a 1978 SC in 1986. For the same money my choice also included...Ferrari Dino 246, Aston DB5 and, for a couple of grand more...2.7RS. The benefit of hindsight eh?!!
YoungMD said:
So what will he do, he says he will start with a 0.5% increase at the end of the year, will he? Well unless inflation kicks the 2% I can't see it and besides they need a more than 50% vote from members and I think the last vote was way short of that, and beside slick dude studied economics for 10+ years so Hes brain washed to follow the theory.......
The BoE target CPI stability at 2% with a TWO YEAR time horizon so they won't necessarily wait for it to reach that level before they move. In theory they adjust interest rates in the present to affect the inflation rate in two years time. Although CPI is currently close to zero the big drop in oil prices is due to fall out of the calculation soon so it won't be long before the inflation rate picks up (all other things being equal). The most recent vote was 8-1 against a rate change but again this is something that can change fairly quickly. They'll wait for the Fed to move first and that could be in September by all accounts.But when they do move it's going to be fairly slow going. I think we're some way away from a 2% base rate, let alone 5%.
rubystone said:
In 1995 I sold my 2.4E for £9500 to Keith Thomas (where are you now, Keith?). I then bought a 3.2 Carrera cab for £12k. Pre impacts were rarely to be found below that price if in good condition. And I have followed their prices since.
But here's a comparison. I spent £5,500 on a 1978 SC in 1986. For the same money my choice also included...Ferrari Dino 246, Aston DB5 and, for a couple of grand more...2.7RS. The benefit of hindsight eh?!!
But sitting on a Porsche for 30 years would have cost quite a bit and been a large opportunity cost. Sure you'd have made more from property over the same period.But here's a comparison. I spent £5,500 on a 1978 SC in 1986. For the same money my choice also included...Ferrari Dino 246, Aston DB5 and, for a couple of grand more...2.7RS. The benefit of hindsight eh?!!
http://www.pistonheads.com/classifieds/used-cars/p...
Though this looks a lovely thing but it's still a LHD Sc with a badly matched engine lid and all for a snip at £45k!!
This is an example of a chancing dealer and an unfortunate individual who will no doubt loose their shirt
Though this looks a lovely thing but it's still a LHD Sc with a badly matched engine lid and all for a snip at £45k!!
This is an example of a chancing dealer and an unfortunate individual who will no doubt loose their shirt
Crimp said:
http://www.pistonheads.com/classifieds/used-cars/p...
Though this looks a lovely thing but it's still a LHD Sc with a badly matched engine lid and all for a snip at £45k!!
This is an example of a chancing dealer and an unfortunate individual who will no doubt loose their shirt
Putting value aside, that is a handsome thing. Right up my street.Though this looks a lovely thing but it's still a LHD Sc with a badly matched engine lid and all for a snip at £45k!!
This is an example of a chancing dealer and an unfortunate individual who will no doubt loose their shirt
rubystone said:
In 1995 I sold my 2.4E for £9500 to Keith Thomas (where are you now, Keith?). I then bought a 3.2 Carrera cab for £12k. Pre impacts were rarely to be found below that price if in good condition. And I have followed their prices since.
But here's a comparison. I spent £5,500 on a 1978 SC in 1986. For the same money my choice also included...Ferrari Dino 246, Aston DB5 and, for a couple of grand more...2.7RS. The benefit of hindsight eh?!!
God not the hindsight. Always regretted not buying that 2.4S for £17k about a dozen years back or so, it was a white Italian import sat up at Tuthills a car which I have seen again a few years back. It was love at first site and have regretted ever since not buying one when they were reasonable money. Another regret was not moving the S2 on for a 924 carrera GT back in 2009. Really wanted one of those but also wanted to build a track/race car. Good god what a way to blow money you will never see again. The 924 carrera GT in particular is an oddity as for a long time they were sat at about £10K or a bit more only to go ballistic it seems in the past 2 years. But here's a comparison. I spent £5,500 on a 1978 SC in 1986. For the same money my choice also included...Ferrari Dino 246, Aston DB5 and, for a couple of grand more...2.7RS. The benefit of hindsight eh?!!
The number one thing that makes me feel this is a definite bubble is how much car one can buy if looking at the several year old market, so many cars available for a small fraction of their new price one can't but help think are these classics really worth it?
rubystone said:
g7jhp said:
But sitting on a Porsche for 30 years would have cost quite a bit and been a large opportunity cost. Sure you'd have made more from property over the same period.
Believe me, I use that argument to keep myself sane 
hunter 66 said:
A lot of "collectable " Porsche cars are now bought not by enthusiasts , I know of some of the best cars out there ( Aircooled RS ) that the owners have not even seen ( nor do they want to ) ..... on trickle and a start up once a month ...
And these people with sell sell sell the minute they get wind that things might start losing money, then others start selling theirs and then loads of supply but no one willing to pay top money anymore and then pop, bubble burst.I realise that's a very abridged version.
pete a said:
And these people with sell sell sell the minute they get wind that things might start losing money, then others start selling theirs and then loads of supply but no one willing to pay top money anymore and then pop, bubble burst.
I realise that's a very abridged version.
I am fully aware that there are some people doing that, but I dont believe its a significant number.I realise that's a very abridged version.
And anyway, there are loads of real enthusiasts just waiting to snap them up. But its all speculation I guess, none of us really know.
I was VERY lucky that I bought my 997 GT3 when I did......but I bought it because I had ALWAYS wanted one not because of the potential rise in values....and it was a struggle to get spending £50k odd past the wife at the time too!
I have watched the prices rise and it got to a point where I was going to sell it and 'cash in' and spend the money on a house extension but I had a good long hard think and thought there was nothing out there that really appealed to me from a driving perspective (even at £75-£80k) so I found the money for the kitchen and extension elsewhere and kept the car
I honestly believe I will keep this car forever as the Gen 2 997 RS (which is what I REALLY want) is too far out of reach and I can't really see myself being able to justify £150k on a toy.......not that I can afford that either as I am not a rich man so I will be keeping this little treasure of a car for as long as I can still drive it!
As a side note I think people get too hung up on values and let the investment part override their enjoyment of the car. The way I see it is this, when I bought the car I expected it to drop to £40k and then probably settle at around £45k (this was a 'finger in the air' guess based on where I saw the car positioned on the heirachy of the 997 range) I will continue to drive the car, continue to spank it on european trips and continue to cherish,maintain and enjoy it for as long as possible. If the time comes to sell it then whatever I get that is over £45k is a bonus as far as i'm concerned!
I have watched the prices rise and it got to a point where I was going to sell it and 'cash in' and spend the money on a house extension but I had a good long hard think and thought there was nothing out there that really appealed to me from a driving perspective (even at £75-£80k) so I found the money for the kitchen and extension elsewhere and kept the car
I honestly believe I will keep this car forever as the Gen 2 997 RS (which is what I REALLY want) is too far out of reach and I can't really see myself being able to justify £150k on a toy.......not that I can afford that either as I am not a rich man so I will be keeping this little treasure of a car for as long as I can still drive it!
As a side note I think people get too hung up on values and let the investment part override their enjoyment of the car. The way I see it is this, when I bought the car I expected it to drop to £40k and then probably settle at around £45k (this was a 'finger in the air' guess based on where I saw the car positioned on the heirachy of the 997 range) I will continue to drive the car, continue to spank it on european trips and continue to cherish,maintain and enjoy it for as long as possible. If the time comes to sell it then whatever I get that is over £45k is a bonus as far as i'm concerned!
V8KSN said:
I was VERY lucky that I bought my 997 GT3 when I did......but I bought it because I had ALWAYS wanted one not because of the potential rise in values....and it was a struggle to get spending £50k odd past the wife at the time too!
I have watched the prices rise and it got to a point where I was going to sell it and 'cash in' and spend the money on a house extension but I had a good long hard think and thought there was nothing out there that really appealed to me from a driving perspective (even at £75-£80k) so I found the money for the kitchen and extension elsewhere and kept the car
I honestly believe I will keep this car forever as the Gen 2 997 RS (which is what I REALLY want) is too far out of reach and I can't really see myself being able to justify £150k on a toy.......not that I can afford that either as I am not a rich man so I will be keeping this little treasure of a car for as long as I can still drive it!
As a side note I think people get too hung up on values and let the investment part override their enjoyment of the car. The way I see it is this, when I bought the car I expected it to drop to £40k and then probably settle at around £45k (this was a 'finger in the air' guess based on where I saw the car positioned on the heirachy of the 997 range) I will continue to drive the car, continue to spank it on european trips and continue to cherish,maintain and enjoy it for as long as possible. If the time comes to sell it then whatever I get that is over £45k is a bonus as far as i'm concerned!
How dare you come here with your reasonable and mature post!I have watched the prices rise and it got to a point where I was going to sell it and 'cash in' and spend the money on a house extension but I had a good long hard think and thought there was nothing out there that really appealed to me from a driving perspective (even at £75-£80k) so I found the money for the kitchen and extension elsewhere and kept the car
I honestly believe I will keep this car forever as the Gen 2 997 RS (which is what I REALLY want) is too far out of reach and I can't really see myself being able to justify £150k on a toy.......not that I can afford that either as I am not a rich man so I will be keeping this little treasure of a car for as long as I can still drive it!
As a side note I think people get too hung up on values and let the investment part override their enjoyment of the car. The way I see it is this, when I bought the car I expected it to drop to £40k and then probably settle at around £45k (this was a 'finger in the air' guess based on where I saw the car positioned on the heirachy of the 997 range) I will continue to drive the car, continue to spank it on european trips and continue to cherish,maintain and enjoy it for as long as possible. If the time comes to sell it then whatever I get that is over £45k is a bonus as far as i'm concerned!
anonymous said:
[redacted]
There are new buyers. MANY more! Thats what is happening. Oh, and add to that a dwindling number of good cars.Maybe its a trend? Maybe not.
But as I have said before, I cant figure a set of circumstances that will have a significant negative effect going forward. Unless ISIS get their s
t together, and then we may have other priorities....anonymous said:
[redacted]
Thats a very good question. I believe that there is a growing number of car enthusiaists that are bored with 'the latest thing' and now want their childhood dream. Thats putting it very simply.I was at Ninemeister recently and was looking at one of their creations, an ST homage. It was beautiful, and of course expensive.
The buyer had the means and had owned everything and had come to the conclusion that what he actually wanted was an ST to his specification. The right engine, grey with purple stripes. It was over 100k.
Putting it simply, I think retro is cool and enthusiasts are looking for individuality. Something like that.
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