Think house prices will rise now.. read this...

[new_trader]

Hoggums

What you say is very correct and I also agree that lots of people have jumped on the bandwagon thinking that property will be their pension.

For all those invested in 90's, that still hold true. They are sitting on huge equity - probably around more than 60% of the value. This in itself a great asset as far as banks are concerned. So for those people, this downturn is a great opprtunity to add further assets.

But those who thought the same and bought at peak and at 110%, their dream has collapsed.

People with money and assets today are able to, as a cash buyer, negotaite a price that is 80 to 90% of the value. In some case even more.

As long as I am in 40% to 60% ratio, I will be more than OK. Everyone has their own ratios about this.

Obviously I have no ablity to predict what will happen in 5 years time or for that matter in next 10 years. But one has to take a calculated risk - Nothing ventures Nothing gained...!!

Unless they were suckered into mortgage equity loans to fund an extravagant life or a Buy-to- let property. Do you think that everybody who bought a property in the mid-late 90's was sensible and knew about property 'investment' because they got the timing right? No, I don't think so, far from it.

 

[N Rothschild]

the housing bubble is burst. can you re inflate a balloon after sellotaping it back together? possibly, but unlikely.

 

[Technically Fundamental]

If they don't drop to a level that seems attractive to first time buyers - and not just the ones whose parents have 40-50k cash to give them for a deposit - then there's gonna be real trouble.

I think the fact that a lot of the construction industry workers are being laid off will be a major factor in this crash. They have been doing really well in the last decade and from what I've seen through work a lot of them who have been laid off or if their business is struggling are trying to cash in to scoop the equity whilst it's still there for money in the bank and s they don't have the worry of the mortgage. The market for flats/apartments is saturated already but once the market for affordable homes becomes saturated then free-fall I say.

 

[zambuck]

Hi all

I am talking about Property - Housing and Business - AND the opportunitie that are related to equity rich people.....

I am NOT talking about Jonses with 2 flats purchased with 110% equity.

I agree with most sentiments displayed here and it is correct.

But for equity rich people there are bargains galore in this market....This was NOT the case in 2008. People were asking for - and sticking with the price - and buying opportunities were just not there...

Sensibility has come to market and market forces are working nicely now in the sense that both purchasers and buyers do negotiate sensibly now and reach a agreement.

All bubbles do burst and after busrting, the sensibility and price adjustment prevails for some time. But if anyone says that because bubble has burst so it is end of the world then i is a very pessimist view.....

There is ALWAYS a RIGHT price for ANYTHING regardless of market situations....

 

[zambuck]

new trader

You are right....I was one of them....MY accountant pushed me into it...I was against it....But it has proved to be a very good run....A risk was there and I had NO idea as to how it will all unfold....But then one has to take a small risk once in a while....!

My pension pot is probably worth credit card limit (gold card)...but housing has performed a lot better...

 

[Technically Fundamental]

All bubbles do burst and after busrting, the sensibility and price adjustment prevails for some time. But if anyone says that because bubble has burst so it is end of the world then i is a very pessimist view.....

I'm being neither pessimistic nor optimistic. I just don't really think we've seen the full extent of this downturn yet particularly in the housing market. All the information I've seen has lead me to believe we are going to enter a sh1tstorm in the next 12-18 months and I personally think the housing market is going to take a BIG hit in said storm.

On the commercial side most property acquisitions are done through funding and at the moment the banks aren't giving out like they used to. Couple that with lower consumer spending (if this downturn goes the way I think t will) and it's really not a pretty picture. I'm thinking the only way to make a bit of certain money over the next year or two is to grab a few shares in budget food stores like Aldi and holiday companies (husband and wife rifts, escape from the pressure, less holiday homes being bought). As a matter of fact I'm going to look into that right now lol.

 

[N Rothschild]

Hi all

I am talking about Property - Housing and Business - AND the opportunitie that are related to equity rich people.....

I am NOT talking about Jonses with 2 flats purchased with 110% equity.

I agree with most sentiments displayed here and it is correct.

But for equity rich people there are bargains galore in this market....This was NOT the case in 2008. People were asking for - and sticking with the price - and buying opportunities were just not there...

Sensibility has come to market and market forces are working nicely now in the sense that both purchasers and buyers do negotiate sensibly now and reach a agreement.

All bubbles do burst and after busrting, the sensibility and price adjustment prevails for some time. But if anyone says that because bubble has burst so it is end of the world then i is a very pessimist view.....

There is ALWAYS a RIGHT price for ANYTHING regardless of market situations....

zambuck the problem is its not just a housing bubble that has burst. i recommend reading soros, the market crash of 2008

 

[Atilla]

the housing bubble is burst. can you re inflate a balloon after sellotaping it back together? possibly, but unlikely.

The answer to your question (with respect to housing) is ABSOLUTELY YES YOU CAN!!!

1. Houses are not balloons!

2. On the contrary most individuals and businesses buy run down or mismanaged property and fix those holes (with some sellotape :cheesy and sell it on for much higher prices.

3. Look back at the 70s 80s 90s 2000s and there is a distinct pattern. 70s period of high inflation subsequently led to rocketing of house prices. 80s after years of recession and massive PSBR debt under the Tories house prices rose. Likewise 93 & 2003. Be no different in 13 post Olympics fever. Watch this space...


I concur about the level of price falls required for the bottom but there is still a lot of cash buyers out there and I'm not sure people will wait for 35% price drops. I believe so far we have had about 25%. May still fall who knows but markets are much more liquid and information and know how as well as the potential profit from property is still fantastic. One other point - I feel price adjustment in the last year has been very dramatic. Thus quicker prices adjust quicker we move out of recession imo.



More realisticaly I believe the only way out of this debt crises is via inflation and in the next couple of years people will be clambering to secure their savings & pensions by buying property.

 

[N Rothschild]

you cant re inflate it..what you going to use to finance the re-inflation? hopes and dreams? as i said housing is not the only bubble to have burst..the era of cheap and easy credit is OVER. and imo we wont see the mass inflation eveyone thinks we will, mass deflation if you ask me

 

[N Rothschild]

seriously read george soro's book regarding bubbles and boom bust

 

[counter_violent]

Just wait while middle America wakes up and decides they aren't going to carry on paying their mortgages on 1mill dollar homes that are now selling for 500k .......then we will see a banking crisis......i expect only after the next crisis will property actually find a bottom .....whatever scenario plays out...property will not be coming back anytime soon ....the job losses will see to that....it's impossible to have any meaningful recovery in property without a recovery in jobs and wages.

 

[squall321]

House Prices Compared: What USD $500,000 Buys Worldwide

@ london

 

[N Rothschild]

could go for a couple of those propertys tbh

 

[zambuck]

.....Hope Nick Leslau is not reading the predictions of property markets by 'Pundits' on this site as he has just spent 240 odd million pounts buying commercial and misc property portfolio......

Read extract from Times below.....

The property world is full of pretenders to the throne of Britain’s most successful real estate entrepreneur. Nick Leslau certainly has a strong claim and, by investing £245 million into a distressed commercial property portfolio yesterday — the first acquisition of its kind since the slump began — he strengthened his case for the title.

His latest venture is Max Property, the £211 million investment vehicle he set up in May with Mike Brown to exploit opportunities in the downturn. When challenged on the timing of the launch, Mr Leslau said: “If we’re wrong, we’re not going to be very wrong.” Other property gurus now agree that the commercial property market is at, or close to, the bottom. Yesterday, the pair paid £97 million to buy the Industrious Portfolio of 86 industrial estate properties from Ernst & Young, the receivers of the Industrious Group.

The deal appears bullish at a time when other investors are waiting in the wings, but shareholders agree that the price of the distressed portfolio, at 37 per cent of its peak value, represents a great deal.

...So the original question was - Think house prices will rise now.. read this...

....Any comments...?

 

[Atilla]

If house prices don't drop in value ove rthe next two years I'll eat my hat. Also remeber to question these biased figures they put out. Are the based on a standard deviation of national selling prices or a sample? What kind of people use the bank that provides the data? What regions have been considered? are they talking about? What kind of properties are losing the highest % of value e.g. flats, semi, det, and price range? Sale price vs asking prices?


maybe they'll re-evauluate who is prime and who is sub-prime after this fiasco lol.

Something to look forward to?

 

[zambuck]

......Trilby and treacle...I undertand that this is an original recipe...!

 

[Atilla]

......Trilby and treacle...I undertand that this is an original recipe...!

You are a class act Zambuck.

TF you are not alone... Johnny Depp literally eats part of his hat - Mad hattery - StyleList Fashion Blog

 

[gfrost]

....It is very wrong to compare Japan with UK or India with UK etc.....Scenarios are not same.....

Hmmm... I remember the last housing boom, when the talk was. " it will soon be like Japan where mortgages have to be passed on to your Children"

It seems the talk is a little different now Japan housing is at a 24 year low !

 

[zambuck]

...Japan will NOT have the immigration that UK will have in next ten years from expanding EC.....All from EC and beyond will strive to enter UK because of one single factor....English Language....

....Japan is relatively immigrationless.....and self contained entity....But it has precious less land mass and hence the property prices....UK has relatively larger land mass and all this talk about UK as Island being full is baseless scaremongering from far right.....

...Just check the statistics of how many houses are needed in this country and you will know...

India on the other hand is enjoying a bix ex pat immigration in Goa and other parts.....Land value has reached dizzy heights and there is still no end in sight....Small farmers have become zillionarires overnight....and it is still going on....

One of the fastest growing economis of the world today and has a huge manufacturing clout, and it was not at all affected by the credit crunch as Indians have always remained aloof to UK and US Economies...

So every country is different when you look at property prices....

 

[zambuck]

....Intersting...perhaps it is a case of.....fedora and fondue......!!

You are a class act Zambuck.

TF you are not alone... Johnny Depp literally eats part of his hat - Mad hattery - StyleList Fashion Blog