How far will house prices fall [volume 5]

[mwstewart]

rovermorris999 said:

After good health, getting paid for doing something you enjoy is the greatest gift one can have. You are a lucky person.

Noted, thanks.

[Shnozz]

MG CHRIS said:

stuckmojo said:

MG CHRIS said:

Yes however working years have increased too my generation wont retire till our 70s. Swings and roundabouts.

True. Both negative things, really. Working until your 70's to pay off a mortgage taken out in your 30's while your parents could do with a single salary and retired at 60 or earlier and they had much bigger houses with things like garages and gardens.

Not exactly progress, but that's a wider debate.

Yes but my parents generation started working at 16 where as my generation or the others after wont until well in to there 20s also we will live longer generally speaking than our parents and do less physically demanding jobs. Talking about parents I got my house at the same age as when my dad got his first house with my mother. Both me and my sister bought our house on our own. My parents could never dream of doing that if they were single well my mother couldn't anyway.

My house has a garden and a garage as well and is a 2 bed house the same as what my parents first house was.

And that to me is an example of clever psychology of the whole debt burden. You see it as swings and roundabouts yet I see it as all negative. 35 year mortgages being considered normal and one having a lifetime of debt with no respite is not progress I would argue.

Previous generation might have started work at 16, but often buying at early or mid twenties (arguably generation before doing so on only one salary) and mortgage seen off by 50 even if they didn’t overpay or inherit etc - leaving remaining years to build a retirement nest fund.

With people now 35 or so before they buy, 35 year mortgage, student debt, cars on PCP cycles etc the lenders have created a lifetime debt cycle. It’s tragic that it’s been normalised and accepted.

[kingston12]

Burwood said:

I grew up in NZ. In the past 10 years all everyone talks about over there is property. It's an obsession. There is essentially zero capital gains tax no matter if you own 100 properties. Flipping has been stopped by taxing sales inside 2 years as of last year but the damage has been done. There were cases of houses being flipped 10X in a year.The house I grew up in and my parents still own cost 185K in 1982. They renovated it extensively but i'd say it it would have risen to 1m by 2000. 1.5 by 2005. It's now worth 6m. The government opened the flood gates in the early 2000s to anyone with money and the wealthy flocked and grabbed as much land as they could using money from dubious sources in many cases. The young can not buy in Auckland now and it is very much a contentious issue.

I bet it is a contentious issue, and sounds much more of a problem than we’ve had in the U.K.

My parents bought a house in SE England that same year for £60k. They don’t own it anymore, but it looks as though it would be just north of £1m by now, so about half the inflation compared to NZ.

Does the government over there support the market by ‘helping’ buyers as much/more than in the U.K.?

[Burwood]

kingston12 said:

Burwood said:

I grew up in NZ. In the past 10 years all everyone talks about over there is property. It's an obsession. There is essentially zero capital gains tax no matter if you own 100 properties. Flipping has been stopped by taxing sales inside 2 years as of last year but the damage has been done. There were cases of houses being flipped 10X in a year.The house I grew up in and my parents still own cost 185K in 1982. They renovated it extensively but i'd say it it would have risen to 1m by 2000. 1.5 by 2005. It's now worth 6m. The government opened the flood gates in the early 2000s to anyone with money and the wealthy flocked and grabbed as much land as they could using money from dubious sources in many cases. The young can not buy in Auckland now and it is very much a contentious issue.

I bet it is a contentious issue, and sounds much more of a problem than we’ve had in the U.K.

My parents bought a house in SE England that same year for £60k. They don’t own it anymore, but it looks as though it would be just north of £1m by now, so about half the inflation compared to NZ.

Does the government over there support the market by ‘helping’ buyers as much/more than in the U.K.?

Indirectly they try and help. For example, foreigners can now only buy new builds, landlords now require 30% deposits. It doesn't help first time buyers. The damage has been done. My brother who is based there has a dozen properties and he started in 98. If you talk about the subject now has a selective memory. He worked hard but his first property was funded by own grandmother, he leveraged it up and bought another with a tiny deposit, did the same again and again. High risk but easy to do if you chose. The banks were happy to lend on 5-10% back then. Today he would say, young people just need to save hard and buy a dump somewhere way out of the city and rent where they work. He would argue he could replicate what he has done, again in todays market. Complete rubbish. He also thinks the market will never go down. He's in a different kind of market though-he buys large houses and converts them to medical rooms for Surgeons, OBGYN etc.

[A.J.M]

The whole 35 year thing.

Unfortunately that’s the hand we have been dealt with.
Trying to buy a house, during a pandemic with job losses happening.

Banks have withdrawn the 10% deposit mortgage so having to find the extra needed was interesting.

I have no intention of letting it run for 35 years, but for now it’s what I had to take to get on the ladder.
Like many have done before, when the fixed term runs out, I’ll try and get it adjusted for better terms.

This is a reality for us, and many others will likely be in the same position, we have to make the best of it.
Sometimes you have to buy at the wrong time of the market, not everyone has the luxury of being able to wait it out.

[AstonZagato]

WE have a long way to go in the UK - Japan went to 50 year intergenerational mortgages at the height of their boom.

[Carbon Sasquatch]

Plenty of people run mortgages for >35 years - I know loads who reset the clock to 25 every time they moved, just to keep the monthly payments down.

As above, as long as you expect to pay it off during your working life, then somewhat OK - intergenerational mortgages are a whole different concept.....

[Helicopter123]

Carbon Sasquatch said:

Plenty of people run mortgages for >35 years - I know loads who reset the clock to 25 every time they moved, just to keep the monthly payments down.

As above, as long as you expect to pay it off during your working life, then somewhat OK - intergenerational mortgages are a whole different concept.....

The key of course is that they are building equity along the way.

It's the same with an intergenerational mortgage.

[AstonZagato]

Sorry - I was wrong. They got to 100 years:
https://www.sciencedirect.com/science/article/abs/...

[stuckmojo]

Carbon Sasquatch said:

Plenty of people run mortgages for >35 years - I know loads who reset the clock to 25 every time they moved, just to keep the monthly payments down.

As above, as long as you expect to pay it off during your working life, then somewhat OK - intergenerational mortgages are a whole different concept.....

With wage inflation at zero or negative and real estate rising in price that's the next step.

[Bullet-Proof_Biscuit]

Sale contracts all arrived on the emails yesterday, which I have to print... (internwebs cafes all closed hmmm).
Conveyancer won’t initiate releasing half the deposit from my LISA until completion dates are agreed though.. would these dates be expected to be agreed once my signed docs are returned received? Takes a couple of 3 weeks for LISA release is my worry...

[ooid]

Can you exchange/complete in the same day? I've done it twice.

[Ari]

We're heading for arguably a perfect storm of the stamp duty holiday ending at the end of March (which has undoubtably given the property market a serious boost, although whether it has saved anyone any money or whether property prices simply increased to fill the gap, plus a bit more due to the 'gold rush' of people wanting to take advantage of it, is another matter) and furlough apparently ending at exactly the same time (although they might magic up some more funny money and keep either or both going).

There is also likely to be a drop in demand not just because of stamp duty ending and that 'saving' disappearing, but also because some people will have pushed their house purchase forward to take advantage of it, leaving a vacuum where they would ordinarily have been.

And it seems extremely likely that a lot of people on furlough are professionally 'walking dead' - as their pay comes back onto company payrolls, a lot of businesses might question why they need that expense given they've managed without that person for the last x number of months.

So, are the House Price Crash lot finally going to have their day, or is it going to be business as usual and a continued rise in property values?

[AstonZagato]

Ari said:

So, are the House Price Crash lot finally going to have their day, or is it going to be business as usual and a continued rise in property values?

All of the QE needs to end up somewhere and the housing market is as likely a place as any. Housing is overvalued in the UK but if a global pandemic and soaring unemployment only causes it to rise, I can't really see the catalyst to burst the bubble.

[turbobloke]

Ari said:

<snip>
So, are the House Price Crash lot finally going to have their day, or is it going to be business as usual and a continued rise in property values?

Can't see a crash but then I lack a decent crystal ball. The one I have which doesn't work too well sees a decent fall in volume beyond March barring any further props, and relatively sticky prices i.e. on sale not asking.

[NickCQ]

AstonZagato said:

All of the QE needs to end up somewhere and the housing market is as likely a place as any. Housing is overvalued in the UK but if a global pandemic and soaring unemployment only causes it to rise, I can't really see the catalyst to burst the bubble.

This was where I got to 3-6 months ago. Effectively total capitulation to a crazy market!

[ooid]

Ari said:

So, are the House Price Crash lot finally going to have their day, or is it going to be business as usual and a continued rise in property values?

Over-priced properties will come down... Good properties, in good locations will always rise.

[CaptainSlow]

AstonZagato said:

All of the QE needs to end up somewhere and the housing market is as likely a place as any. Housing is overvalued in the UK but if a global pandemic and soaring unemployment only causes it to rise, I can't really see the catalyst to burst the bubble.

This QE hasn't actually funded any worthwhile investment or increased anyone's wealth it has just paid for people to sit at home for a year.

Itll keep interest rates lower. Will be interesting to see what happens to the prices on current listings as we go through January and beating the deadline becomes less likely.

[Shnozz]

ooid said:

Ari said:

So, are the House Price Crash lot finally going to have their day, or is it going to be business as usual and a continued rise in property values?

Over-priced properties will come down... Good properties, in good locations will always rise.

This is the fascinating factor in this predicament. On top of the economic factors caused by the pandemic, has it created a migration to more rural/spacious properties?

[moles]

QE has ended up paying people to sit at home with zero productivity to show for it. In 2009 it ended up in shares and houses but now it’s already been spent. Yes a few million wkers have scammed the system with bounce back loans and claiming furlough while still doing cash jobs but on the whole it’s already been spent had it not?.