The Housing Market Is Hanging On By A Thread Signals High End Real Estate

This is a discussion on The Housing Market Is Hanging On By A Thread Signals High End Real Estate within the Economic & Fundamental Analysis forums, part of the Methods category; Originally Posted by new_trader 26 years ago is about right, and you accept that it was a bust, right? Let's ...

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Old Aug 17, 2016, 7:56am   #57
NVP
 
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Quote:
Originally Posted by new_trader View Post
26 years ago is about right, and you accept that it was a bust, right? Let's look at the data:

Source: http://www.nationwide.co.uk/about/ho...m-1973-onwards

According to the data:
Peak: Q3 1989, Average price: £62782
Trough: Q1 1993, Average price: £50128
A peak to trough decline of 20.2% and this according to you is a bust, right?

The next bubble:
Peak: Q3 2007, Average price: £184131
Trough: Q1 2009, Average price £149709

A peak to trough decline of 18.7%... a difference of only 1.5%! You're arguing over 1.5%? One is a bust and the other isn't...1.5%?

It took 14 years for the property market to recover from one trough and move to the next peak, so 2023 is when we will revisit this thread, give or take.

assume you will still take credit if its earlier than that ?

I have watched thousands of traders fall by the wayside using such benign and vague rules to try to make money ............I don't recommend it if you want to be professional at anything

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Old Aug 17, 2016, 8:51am   #58
 
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Originally Posted by new_trader View Post

To say “The days of boom and bust don’t apply anymore” is the epitome of arrogance.
You seem to be picking a fight with this statement uttered by Gordon Brown in his budgetary speel.

He was of course a politician on an electioneering campaign to get him self in to the PM seat. Why attribute this to the rest of bloggers on this thread and skew the debate on property? Don't see any bloggers here agreeing with him do you?

The economic growth cycle is still here and always likely to be and different industries perform at different levels. Whether it's bonds, commodities or shares the cycle continues. Property as simply another asset class and building industry is no different.

Last edited by Atilla; Aug 17, 2016 at 9:29am.
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Old Aug 17, 2016, 5:45pm   #59
 
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Half price property

Look at what happened to property prices in Northern Ireland...a loss of over 54% !

Click the image to open in full size.



But the forkwits will tell you the U.K doesn't do property crashes...last time I checked Northern Ireland is a part of the UK...but to tell you the truth under all this Brexit I've lost track myself
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Old Aug 17, 2016, 5:55pm   #60
 
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Originally Posted by Atilla View Post
You seem to be picking a fight with this statement uttered by Gordon Brown in his budgetary speel.

He was of course a politician on an electioneering campaign to get him self in to the PM seat. Why attribute this to the rest of bloggers on this thread and skew the debate on property? Don't see any bloggers here agreeing with him do you?

The economic growth cycle is still here and always likely to be and different industries perform at different levels. Whether it's bonds, commodities or shares the cycle continues. Property as simply another asset class and building industry is no different.
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Originally Posted by forker View Post
I think the housing market is only going to get worse in terms of prices. Population growth and people living longer will continue to pressure demand. Added to this is availability of land and how fast builders deliver new supply. In my opinion, which is based on the evidence, the days of boom and bust doesn't apply globally anymore. Sure there will always be the high end market where the greatest fluctuations take place but it won't affect the rest of the market as much. Take London as an example, the high end market has taken a hit but the rest has either increased or unchanged.

Just the forkwit you keep agreeing with

Put me on ignore, please...you are tedious.
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Old Aug 17, 2016, 9:23pm   #61
 
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Quote:
Originally Posted by new_trader View Post
Look at what happened to property prices in Northern Ireland...a loss of over 54% !

Click the image to open in full size.



But the forkwits will tell you the U.K doesn't do property crashes...last time I checked Northern Ireland is a part of the UK...but to tell you the truth under all this Brexit I've lost track myself

NT you missing the point. It is simply about supply & demand. Whilst the US & EU were having issues 2007/8 - property asset prices were storming ahead in Asia including Australia (and BRICS were doing well). London hardly registered and recovery was really a V-type correction in UK property market. Much of it supported by migrants, foreign investors/buyers and lower interest rates, easy money yes.

The economic cycle is with us but as with capitalism (without changing the subject) can not handle any slowdown in profits. Capitalism is inherently unstable seeking continuous growth in profits etc.

Same thing happened in Spain as in Irelan ie with the PIGS. The boom and bust was avoided or perhaps postponed but easy money policy did work.


imho What we need now is some fiscal policy to bring in tax revenue and redistribute that to infrastructure projects and manufacturing around the country to provide the platform for UK to be able to compete in international markets.

Bit of inflation here should help to eradicate the debt burden too.


To answer the question of the thread however, to get back on track - the UK housing is not hanging by a thread but ticking along nicely with an increase in supply a requirement for continued stability and dampen excessive price rises.
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Old Aug 18, 2016, 12:11am   #62
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Originally Posted by new_trader View Post
Central Banks cause the property bubbles by suppressing interest rates
gardian article

"The report, called Finding Shelter, cites statistics showing that 85% of prime London property purchases in 2012 were made with overseas money. "

"Civitas says the problem is not confined to the top end of the market and that overseas buyers are also acquiring less expensive newbuild homes. It says that over the past two years only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia."

In the run up to 2007, Russia and Singapore had interest rates of 6%, Malaysia was just under 3%, Hong Kong was over 4%, and the UK was over 4%. None of the countries listed had suppressed interest rates so how does one explain the cause? this leads onto your next point:

Quote:
Originally Posted by new_trader View Post
it was Gordon Brown who helped fuel the UK property bubble and subsequent bust in 2007
Admittedly, Gordon is a basket case with him selling our gold reserves the way he did. That being said, he was responsible for freeing brownfield land for new homes and gave people a change to shared ownership but this wasn't a driver to inflation, it was a reaction to it. Availability of land is one of the key drivers in the shortage of property. It could be argued that Gordy could have slowed foreign investment through taxes. It also could be argued that he could have removed tax credits to landlords (controversial as they provide rental liquidity).

Gordy is a good point you raise however you fail miserably in your delivery where you associate his help with this "bust" as you call it in 2007. Gordon was not the architect of subprime securities categorised as investment grade. Nor was he responsible for the lack of liquidity on international capital markets. He also wasn't responsible for banks, such as those in Ireland,for holding too much risk in a single asset class. Ultimately we can only conclude that you talk a good turd which is evident with your elegant follow through:

Quote:
Originally Posted by new_trader View Post
it was Gordon Brown who pushed interest rates down to almost 0%
in 1997, Gordon announced that the bank of England have operational independence over monetary policy (including setting interest rates). Stating he pushed them down to almost 0%, well, the only comment i have on this is the irony in your following statement:

Quote:
Originally Posted by new_trader View Post
My experience tells me that you and others in this thread haven't got the foggiest idea of what you are talking about.
one more thing, i need to correct you on something:

Quote:
Originally Posted by new_trader View Post
misguided belief that the days of boom and bust are over.
Perhaps i should put it in layman's terms so you don't regurgitate the turds that flow so easily for you

"Does not apply globally anymore"
does not translate to
"believing the days of boom an bust are over".

Your interpretation of what i have said is no different than me telling you measles doesn't kill globally anymore. Your interpretation then follows as the days of people dying of measles are over.
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