How far will house prices fall [volume 4]
Discussion
lepill said:
You are quite right. Where you are in the country makes a huge difference to your perception of the market.
The last 10 years have seen a total 32.9% inflation rate.
National average house prices have risen 34.2% over the same period.
So a minor outpacing.
However, that national average has been achieved by only 25% of the 48 counties seeing an above inflation increase.
London the star performer, achieving an 84% increase. The South East makes up the other counties.
If you take out London and the South East, we have seen average house price deflation when compared to the rising cost of living.
This is an excellent, informative post.The last 10 years have seen a total 32.9% inflation rate.
National average house prices have risen 34.2% over the same period.
So a minor outpacing.
However, that national average has been achieved by only 25% of the 48 counties seeing an above inflation increase.
London the star performer, achieving an 84% increase. The South East makes up the other counties.
If you take out London and the South East, we have seen average house price deflation when compared to the rising cost of living.
It is perfectly rational for the market to see sharp falls in London and, to a lesser degree, some South East markets, whilst the "cost plus" markets in the rest of the country carry on with modest growth and appropriate pricing.
As a guide, I would see any market at over £400 psf as relatively vulnerable to falls. Even more relevant is price to earnings ratio for first time buyer units in local markets.
Simply put, can the average first time buyer household (not average earner) afford to get the right desposit and mortgage together to buy.
p1stonhead said:
There has been hundreds of articles exactly the same over the past 7 or 8 years.
I opened this thread the other day and was sitting reading through going, "that makes sense", "too right, interest rates must be about to go up" and, "yes, based on that a fall does look very likely" for a good five minutes until I realised I'd clicked on the wrong link and was looking at a page from early 2013.Timberwolf said:
p1stonhead said:
There has been hundreds of articles exactly the same over the past 7 or 8 years.
I opened this thread the other day and was sitting reading through going, "that makes sense", "too right, interest rates must be about to go up" and, "yes, based on that a fall does look very likely" for a good five minutes until I realised I'd clicked on the wrong link and was looking at a page from early 2013.
Moonhawk said:
The fact that Manchester has been mentioned puzzles me.
We used to live on the outskirts of Manchester (within the M60 ringroad and less than 5 miles from the city centre). You can get a detached house round the corner from where we lived for much less than half that amount.
Well where did you live?We used to live on the outskirts of Manchester (within the M60 ringroad and less than 5 miles from the city centre). You can get a detached house round the corner from where we lived for much less than half that amount.
Its very area specific. Even some parts of Chorlton (Beech road area) are much more expensive than the rest of Chorlton. West/Central Didsbury much more than East. Altrincham/Hale are expensive and even Sale are pretty pricey these days. Everywhere else is Manchester...not so much.
ETA I have seen some 3 (normally 4) bed semis in some parts of Chorlton/Dids/Alty/Hale advertised at 500k, not sure on sold prices, they would need to be pretty good ones, but there are very few of them in the desirable areas (in a city which is awash with them)
Edited by NerveAgent on Monday 10th July 18:51
Edited by NerveAgent on Monday 10th July 18:52
In chorlton there are currently quite a few semi's advertised from 650-800k+. (Source Rightmoves). Granted a few are nice however at the end of the day Chorlton is a suburban area next to the Mersey and some horrible areas within spitting distance. No semi in Manchester is worth getting on to a mil.
Ok running a search on semi and terraces upto a cap of 709k(?) Within 3miles of Stretford brings up 80 hits. Some ARE nice. Some seem to over optimistic. 3miles as there's no option for 2miles.
http://www.rightmove.co.uk/property-for-sale/find....
http://www.rightmove.co.uk/property-for-sale/find....
Edited by Sa Calobra on Monday 10th July 21:41
Sa Calobra said:
Good memory, yes Chorlton/Dids way and now it's spreading into Stretford which is now turning into a hotspot.
So - some of the most expensive and desirable areas in Manchester then. It's not like there aren't more affordable options within the same distance of the city centre.
I used to live in Droylsden which is about the same distance from the city centre as Didsbury - but much more affordable. We bought there precisely because Didsbury was unaffordable - this was back in 2001, so hardly a new phenomena.
This kinda backs up what I have said previously - is it housing that is really unaffordable in a lot of cases, or is it people's expectations that are actually beyond their means.
Edited by Moonhawk on Tuesday 11th July 07:51
menousername said:
Housing is unaffordable
You say that, yet I can buy a 2 bed terraced house within 5 miles of Manchester city centre for £85k (a little over 3x average salary) - or a 3 bed detached house with a garden for £150-180k.We sold our house in this area back in 2003 for £164k. An identical house on the estate sold a year ago for £220. This means house prices in that area have actually gone down in real terms since 2003.
Edited by Moonhawk on Tuesday 11th July 08:17
Moonhawk said:
You say that, yet I can buy a 2 bed terraced house within 5 miles of Manchester city centre for £85k (a little over 3x average salary) - or a 3 bed detached house with a garden for £150-180k.
We sold our house in this area back in 2003 for £164k. An identical house on the estate sold a year ago for £220. This means house prices in that area have actually gone down in real terms.
Everyone has been saying it for 100s of pages now. You dont want to believe it so you deny it.We sold our house in this area back in 2003 for £164k. An identical house on the estate sold a year ago for £220. This means house prices in that area have actually gone down in real terms.
Your house went up in real terms. I doubt average salary increased by that much.
We can talk about inflation but inflation is the cost of goods and services so house prices matching or being outpaced by inflation means they have not increased in cost as much ad everything else- but they have increased in cost
And you are saying the average salary in Manchester is 25k?
Moonhawk said:
menousername said:
Housing is unaffordable
You say that, yet I can buy a 2 bed terraced house within 5 miles of Manchester city centre for £85k (a little over 3x average salary) - or a 3 bed detached house with a garden for £150-180k.We sold our house in this area back in 2003 for £164k. An identical house on the estate sold a year ago for £220. This means house prices in that area have actually gone down in real terms since 2003.
Edited by Moonhawk on Tuesday 11th July 08:17
menousername said:
Your house went up in real terms. I doubt average salary increased by that much.
The house didn't go up in real terms.£164k in 2003 would, according to the bank of England inflation calculator, be worth £237k in 2016 money had the house prices only increased by the rate of inflation.
The fact that the house sold for £220k means a 7.2% fall in real terms relative to 2003 prices.
RacingPete said:
Moonhawk said:
menousername said:
Housing is unaffordable
You say that, yet I can buy a 2 bed terraced house within 5 miles of Manchester city centre for £85k (a little over 3x average salary) - or a 3 bed detached house with a garden for £150-180k.We sold our house in this area back in 2003 for £164k. An identical house on the estate sold a year ago for £220. This means house prices in that area have actually gone down in real terms since 2003.
Edited by Moonhawk on Tuesday 11th July 08:17
Mortgages are actually the most affordable they have ever been and probably ever will be.
menousername said:
Everyone has been saying it for 100s of pages now. You dont want to believe it so you deny it.
Yet every time people say "housing is unaffordable" they quote London prices, or prices in some of the most expensive and desirable locations (like Didsbury and Chrolton).We couldn't afford to live in Didsbury back in 2003 despite is being highly desirable back then too - so we bought in a location we could afford.
We worked down in London a few years back and couldn't afford to buy there either, despite quite fancying the city living thing - so we bought a flat out in Hertfordshire and commuted in.
Expectation vs reality.
Moonhawk said:
The house didn't go up in real terms.
£164k in 2003 would, according to the bank of England inflation calculator, be worth £237k in 2016 money had the house prices only increased by the rate of inflation.
The fact that the house sold for £220k means a 7.2% fall in real terms relative to 2003 prices.
But what happened to the local average salary in that time?£164k in 2003 would, according to the bank of England inflation calculator, be worth £237k in 2016 money had the house prices only increased by the rate of inflation.
The fact that the house sold for £220k means a 7.2% fall in real terms relative to 2003 prices.
And what are employment prospects like?
Do the people that would live in a 2 bed terraced 5 miles out need parking?
Are average locals on average salaries who can afford that 21 or 35? If the latter do they need 3 beds?
Moonhawk said:
So - some of the most expensive and desirable areas in Manchester then.
It's not like there aren't more affordable options within the same distance of the city centre.
I used to live in Droylsden which is about the same distance from the city centre as Didsbury - but much more affordable. We bought there precisely because Didsbury was unaffordable - this was back in 2001, so hardly a new phenomena.
This kinda backs up what I have said previously - is it housing that is really unaffordable in a lot of cases, or is it people's expectations that are actually beyond their means.
Apart from Didsbury itself are there really any desirable areas within the M60? Rampant suburbia, with deprived areas one street away. Chorlton I really don't understand at all. Every day I drive past the same bar and every evening the same people are sat outside. It's a place that sells 'craft' beer (another thing I struggle to understand the price premium) that charges £5 for a small bottle or can. In the case of Chorlton it's the case of a few independent shops next to the usual fried kebab places that tries to offer some soul. It's not like there aren't more affordable options within the same distance of the city centre.
I used to live in Droylsden which is about the same distance from the city centre as Didsbury - but much more affordable. We bought there precisely because Didsbury was unaffordable - this was back in 2001, so hardly a new phenomena.
This kinda backs up what I have said previously - is it housing that is really unaffordable in a lot of cases, or is it people's expectations that are actually beyond their means.
Edited by Moonhawk on Tuesday 11th July 07:51
Thanks Crux of it is people will buy there as they'll pay as much as they can afford a month. In real terms how much can they really afford if times turn bad for the economy.
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