Re: Immediate Future of House Prices-

Stagnant......... for the next 48-72 hours, possibly longer.

Though I suppose that also depends upon your definition of immediate

Stephen

YOU'RE A F(*&%^ TOSSER AND TOTALLY WRONG THEY CAN ONLY GO UP AND UP BUY REAL ESTATE NOW THEY AREN'T MAKING ANY MORE LAND IMMIGRANTS ARE TAKING OVER THE COUNTRY AND HAVE BAGS OF MONEY SO YOU'VE GOTTA BUY BEFORE THEY GET THE HOUSE THAT YOU WANT BUY BUY BUY BUY BUY !!!!!!!!!

Wow. That was kinda fun. I've always wanted to do that!

I however agree with the response, people will not continue to pay

100,000+ to purchase converted garages on a 22,000 per year income. Eventually reality sets in. But if you want a different opinion just ask any realtor trying to flog some overpriced converted sewer down pipe.

Stephen

Who's made a 90% reduction prediction? Certainly not anyone with any sense.

Peter Saxton from London snipped-for-privacy@petersaxton.co.uk

Well, some of the things Mike Holmes comes out with can be a bit unorthodox, but to dismiss him as having no sense would be going a bit far.

And though he hasn't actually predicted a 90% reduction, he has dropped heavy hints that it would certainly not be beyond the realms of possibility, especially given that it *has happened* recently in Japan.

Quite a few people have been trying to argue against a property crash here in the UK on the basis of low interest rates, but that (of itself) has not prevented Japan with 0% interest rates from property deflation of 90%.

:> And though he hasn't actually predicted a 90% reduction, he has :> dropped heavy hints that it would certainly not be beyond the :> realms of possibility, especially given that it *has happened* :> recently in Japan.

: Quite a few people have been trying to argue against a property crash here : in the UK on the basis of low interest rates,

This would IMHO be a fair assessment were we discussing an ordinary property bubble: any collapse would almost certainly be a result of the deleveraging following a hike in interest rates.

: but that (of itself) has not : prevented Japan with 0% interest rates from property deflation of 90%.

Really the aftermath of a credit bubble with the credit raised agsint both equities and property.

As I've said before, I think the bond ructions of the past month may indicate the imminent end of our own credit bubble. Things could be put to the test quite soon. Interesting that it hasn't excited much comment in the comics.

FoFP

Could that be because they don't believe it will happen?.........

I ask as someone who having sold up a couple of years ago would love to see property dive so I can get something half-decent with my dosh.

I see in the observer at the weekend that a new BoE governer, a new predicting model - running alongside the old apparently for 6 months or so - a new way of gauging inflation all point to a slackening of discipline and hence lower trend in interest rates and etc.etc. 4% inflation (measured the old way) over 5 years or so might be manageable and would eat away significantly at debt.

This isn't my point-of-view or conviction, more my anxiety.

Who is Mike Holmes when he's at home? How much credibility is given to this prediction?

So why are we likely to consider a property crash of that amount just because it happened in Japan?

FWIW i can't believe we will see a drop of 75% - 90% without prices going up much higher. But i, like a lot of other people would welcome the idea of being able to buy a 100k house in real terms for 10k.

Do you expect prices to go higher or do you think prices have topped?

What year are you currently predicting for deflation?

Also just out of interest how have you positioned yourself financially, what signs are you looking for before you will position yourself differently.

Your views are always welcome on this newsgroup, even if i go to sleep at times when you and Stephen go off. No doubt he will pipe up soon with a little bit more than a wise crack.

It would be ludicrous to compare a western industrialized highly populated Island with an aging population that has moved it's industrial base off-shore and maintains a low interest policy to an Eastern industrialized highly populated Island with an aging population that has moved it's industrial base off-shore with a low interest policy.

It would be farcical to compare Japan and the UK. I mean people there were paying silly prices for residences in Tokyo with beyond a lifetime payback schedule, the price of homes in London is very reasonable priced aren't they? Besides the housing market in London remains strong doesn't it?

Nothing like the UK at all, it's like comparing navel and mandarin oranges.

Stephen.

Isn't the chief difference that Japan is a net creditor and the UK (along with the US) is a net debtor?

There was an article in one of the broadsheets recently about how this causes some countries to worry more about inflation and some more about deflation. Most of it went over my head so perhaps someone could fill me in?

Pete

In article , M Holmes writes

A fair bit in the pink one, though.

More interesting was the snippet about the jump in swap rates and withdrawal of fixed rate loans by a few lenders. Preparation for rising interest rates, methinks.

In my local area (not London) estate agents are taking on a increasing amount of houses onto their books but (virtually) nothing is selling. Sounds like ideal conditions for a downwards trend in house prices.

However the local rag is still reporting an increase in prices.

Mark

: There was an article in one of the broadsheets recently about how this : causes some countries to worry more about inflation and some more about : deflation. Most of it went over my head so perhaps someone could fill me in?

Short form: At the start of a deflation, you want to be out of debt.

FoFP

So then am I correct in saying that deflation eg. is the opposite of "inflation", and instead of your money being reducedin value, eg. then in "real terms" your debt being reduced it is actually increasing in real terms?

And so I assume that would also be the case for your mortgage debt?

Can you say that Global Deflation is a good thing?

That sound pretty close to it to me. Hence people that have done through deflation are very cautious of debt.

Inflation; the governments way of uniformly stealing from millions.

Stephen

Yes, For the Japanese or any other net creditor (assuming they are able to collect ;-)

Stephen

:> Short form: At the start of a deflation, you want to be out of debt.

: So then am I correct in saying that deflation eg. is the opposite of : "inflation", and instead of your money being reducedin value, eg. then in : "real terms" your debt being reduced it is actually increasing in real : terms?

: And so I assume that would also be the case for your mortgage debt?

Yes and yes.

FoFP