How far will house prices fall? [Volume 3]

[VX Foxy]

Long time no see!

[turbobloke]

VX Foxy said:

NoelWatson said:

>8%? That will blow property experts clean out of the water.

Nah, couldn't possibly happen. It's different this time

Worth a chuckle even though the past is not a good guide to the future in terms of market predictability

[NoelWatson]

turbobloke said:

VX Foxy said:

NoelWatson said:

>8%? That will blow property experts clean out of the water.

Nah, couldn't possibly happen. It's different this time

Worth a chuckle even though the past is not a good guide to the future in terms of market predictability

So I think we are all in agreement that it is different this time

[turbobloke]

NoelWatson said:

turbobloke said:

VX Foxy said:

NoelWatson said:

>8%? That will blow property experts clean out of the water.

Nah, couldn't possibly happen. It's different this time

Worth a chuckle even though the past is not a good guide to the future in terms of market predictability

So I think we are all in agreement that it is different this time

Every time is different, as somebody with a smart turn of phrase and the name Heraclitus once said, you cannot step twice into the same river

[NoelWatson]

Obviously a bit late now, and likely to depress CPI over the next decade, but definitely a step in the right direction

"Move to include cost of housing in CPI"


http://www.ft.com/cms/s/0/35ca2dce-e78b-11df-b5b4-...

[NoelWatson]

anonymous said:

[redacted]

"The ONS was asked to look at two different measures of the costs of owning a home: one that relies on house price data; and another that uses estimates of the rent that homeowners forgo by living in their properties rather than having tenants."

[NoelWatson]

Halifax +1.8% MOM. We are saved (except Pugsey)

[DonkeyApple]

anonymous said:

[redacted]

Cost of housing could be an amusing element of the CPI which sees rates at 100% within weeks

B of E raises rates to combat inflation. Cost of mortgages increases, ergo CPI increases. As CPI is rising out of control the B of E will need to keep raising rates,

Guess it all depends how they work it out.

[turbobloke]

Did I not just hear on t'news that the Halifax says house prices rose 2% in October, the biggest such rise for 18 months? Move over Nationwide

Awesome. The latest-stat-theory says we will all be property millionaires. Rodney.

[Digga]

DonkeyApple said:

Cost of housing could be an amusing element of the CPI which sees rates at 100% within weeks

Which also raises the other issue; what it costs nowadays to actually build a house - land prices aside.

When I bought my fist house in '93; a nice semi with garage, on a decent 70's estate, it cost me £49. It was cheapish, because it needed 'everything' doing -kitchen, bathroom, carpets, decor - but still representative.

Having done all that needed doing, we (my then gf, now wife had by that time joined me) sold in 200 for IIRC over £80k.

Today the house is worth somewhere between £140k and £150k.

So two things:

1. Could you ever possibly get back to those sorts of house prices, given build costs which must now be around £50k bare minimum?
2. Will we ever get back to houses being affordable - as they were in '93 - to families on average incomes? IIRC most of the neighbouring, young families (who were older than use), the husbands worked, I'd guess for about £18k p.a. max.and had wives who worked part time, so £10k p.a. max.

[NoelWatson]

Digga said:

DonkeyApple said:

Cost of housing could be an amusing element of the CPI which sees rates at 100% within weeks

Which also raises the other issue; what it costs nowadays to actually build a house - land prices aside.

When I bought my fist house in '93; a nice semi with garage, on a decent 70's estate, it cost me £49. It was cheapish, because it needed 'everything' doing -kitchen, bathroom, carpets, decor - but still representative.

Having done all that needed doing, we (my then gf, now wife had by that time joined me) sold in 200 for IIRC over £80k.

Today the house is worth somewhere between £140k and £150k.

So two things:

1. Could you ever possibly get back to those sorts of house prices, given build costs which must now be around £50k bare minimum?
2. Will we ever get back to houses being affordable - as they were in '93 - to families on average incomes? IIRC most of the neighbouring, young families (who were older than use), the husbands worked, I'd guess for about £18k p.a. max.and had wives who worked part time, so £10k p.a. max.

2. I see no reason how we can have any other outcome, but it will take time

[NoelWatson]

turbobloke said:

Did I not just hear on t'news that the Halifax says house prices rose 2% in October, the biggest such rise for 18 months? Move over Nationwide

Awesome. The latest-stat-theory says we will all be property millionaires. Rodney.

Quick. Now that YOY is negative, let's focus on MOM!
House prices rose more in July (1.16%) than last month (1%), so they must be referring to their fudge, erm seasonal adjustment.

[turbobloke]

"I see no reason how we can have any other outcome, but it will take time"

Opinion, shaken not stirred. There is no reason for anything until after it's happened then the 20:20 hindsighters and broken watch crews can claim infinite wisdom.

Another 'inevitable' outcome is that house ownership is more restricted on a semi-permanent basis with homes changing hands at current prices or broadly similar and the market remains contracted / stagnated.

Edited by turbobloke on Thursday 4th November 10:46

[turbobloke]

NoelWatson said:

turbobloke said:

Did I not just hear on t'news that the Halifax says house prices rose 2% in October, the biggest such rise for 18 months? Move over Nationwide

Awesome. The latest-stat-theory says we will all be property millionaires. Rodney.

Quick. Now that YOY is negative, let's focus on MOM!

Yes, that's why I mentioned the latest-stat-theory as we all approach property millionaire status well those of us with a house i.e. not addicted to housepricecrashdotcom and living in a tent

NoelWatson said:

House prices rose more in July (1.16%) than last month (1%), so they must be referring to their fudge, erm seasonal adjustment.

Fudge, mmmmmmm. Yummy.

[Digga]

turbobloke said:

Opinion, shaken not stirred. There is no reason for anything until after it's happened then the 20:20 hindsighters and broken watch crews can claim infinite wisdom.

Another 'inevitable' outcome is that house ownership is more restricted on a semi-permanent basis with homes changing hands at current prices or broadly similar and the market remains contracted / stagnated.

I used my 'bread and butter' experience, because early on in my life (I only started working in '91) I had direct experience of it and was also in a good position to observe neighbours in similar properties.

I don't actually see how prices will return to those levels; where the ratio of average salary to the price of an average family home is so affordable.

This could mark a shift in the UK property dynamic if wages do not follow other inflation...

[NoelWatson]

turbobloke said:

"I see no reason how we can have any other outcome, but it will take time"

Opinion, shaken not stirred. There is no reason for anything until after it's happened then the 20:20 hindsighters and broken watch crews can claim infinite wisdom.

Another 'inevitable' outcome is that house ownership is more restricted on a semi-permanent basis with homes changing hands at current prices or broadly similar and the market remains contracted / stagnated.

Edited by turbobloke on Thursday 4th November 10:46

Agreed while rates are at historic lows. But when they rise, we will see forced sellers, and then we can get back to a proepr functioning market.

[NoelWatson]

Digga said:

I don't actually see how prices will return to those levels; where the ratio of average salary to the price of an average family home is so affordable.

Unless it is true that the various report we have seen on here are based on a sample zsize of 3, I cannot see how people are going to cope when rates go back to something resembling normal levels.

Here is another, with sample size of 4

http://www.telegraph.co.uk/finance/personalfinance...


As one of the reports said yesterday, "There are many people living in a fool’s paradise because of low interest rates".

[Digga]

NoelWatson said:

turbobloke said:

"I see no reason how we can have any other outcome, but it will take time"

Opinion, shaken not stirred. There is no reason for anything until after it's happened then the 20:20 hindsighters and broken watch crews can claim infinite wisdom.

Another 'inevitable' outcome is that house ownership is more restricted on a semi-permanent basis with homes changing hands at current prices or broadly similar and the market remains contracted / stagnated.

Edited by turbobloke on Thursday 4th November 10:46

Agreed while rates are at historic lows. But when they rise, we will see forced sellers, and then we can get back to a proepr functioning market.

You know how you (and most of the rest of us) don;t beleive that teh propertaay boom of '03 to '08 was 'normal'? Well what is?

1. IMHO, bank lending is not going to go back to anything resembling what we've ever seem before.
2. Building starts on new homes has virtually stopped and the supply of new housing is never going to 'catch up'. (It's not an easy thing to just turn up production.)
3. Sovereign states are competing in some crazy downhill protectionism with IRs and QE.
4. The there's Lord Blackheath's morally suspect UK bailout.
5. There is significant inflation in the UK but it's being 'hidden' or fudged (your term).
6. Wage inflation seesm a fairly distant prospect.

Okay, that last one is plain pie in the sky but you get my gist?

[Digga]

NoelWatson said:

Digga said:

I don't actually see how prices will return to those levels; where the ratio of average salary to the price of an average family home is so affordable.

Unless it is true that the various report we have seen on here are based on a sample zsize of 3, I cannot see how people are going to cope when rates go back to something resembling normal levels.

Here is another, with sample size of 4

http://www.telegraph.co.uk/finance/personalfinance...


As one of the reports said yesterday, "There are many people living in a fool’s paradise because of low interest rates".

But there have always been spackers who don't save and are easily parted with their money.

I know one. He was a contractor and did very well in the boom years - and liked EVERYONE to know it. (If B&O made lawnmowers he'd have bought one.)

He never saved, spunked cash on ridiculous st and now...

But this isn't new or even a symptom of the credit boom - read Dickens and Mr McCawber.

[Digga]

anonymous said:

[redacted]

But even for DINKys, I reckon prices are still steep.