Senior economist predicts house price crash of between 20 to 50%

If I believed that that house prices were going to crash, I would do the following:

1) Place a large spread bet with someone like IG Index 2) Not bother trying to convince other people that a house price crash is imminent, as it really wouldn't make any difference.

It seems to me that the only reason to act otherwise would be if I 'hoped' or 'thought' that house prices might crash, in which case a spread bet would be a stupid idea. But if I 'really believed' that this is what would happen, then this would be a sensible thing to do.

Given that this is appearing in 'uk.finance', finding someone 'obsessed with money' is perhaps to be expected ...

Regards,

Nick

Reply to
Nick Lacey
Loading thread data ...

Ultimately property prices cannot exceed what people are capable of paying. In the long term what people are capable of paying will relate to the real productivity in terms of goods and services that the country generates. With the production and supply of real goods are services increasing moving to India, China and elsewhere and an ever increasing proportion of the population becoming engaged in essentially parasitic bureaucratic employment the outlook is far from encouraging. One day there will be a general realization that the whole edifice is unsustainable and the whole thing will collapse in days or weeks.

R
Reply to
Roger Dewhurst

What does his *position* have to do with it? His opinion is designed to increase the NPV of American Express, not reflect reality.

You poor deluded chap - you probably think Blair still tells the truth because he's basically y'know just a straight down-the-line kinda guy. No wonder Liebour is still in charge :)

You know what, if the interest rate suddently goes from 4.5% to 20%, his prediction may actually come true. I'll give you that !

Reply to
Andrew Thomas

So in what way do you think a house price crash would benefit American Express Bank ? Please enlighten us, I'm dying to find out.

A comment so ludicrously naive it doesn't merit a reply.

Reply to
Crowley

I don't know - I don't have access to Amex's inner-sanctum cash flows, so I have to go by motive.

Well, *I'm* reading a reply. Given your sanctimonous, yet oddly slavish, comment regarding the apparent (but no better informed) OPINION of Amex's chief economist, I'd expect you to be good at pointing naivete out but as with the economist, expectations aren't always met.

Reply to
Andrew Thomas

Ooh! Ooh! Another "expert" for us all to hang our own beliefs on whilst we inwardly align what we perceive to be "facts" with the opinion proffered. No wonder this country is so stupid - it can't even think for itself any more.

Line the man up with all the other fuckwitted "experts" regularly trolling the newspages...

Reply to
Andrew Thomas

No and yes.

Reply to
R.Peffers.

Get real. In 1962 the average wage for a tradesman was 11 - 12 per week. The cost of living was in line with that income so the average worker was no better, and no worse, off then as they are now . The cost of living goes up and the worker sells his/her skills and/or labour for as much as they can demand. The boss puts up prices of his/her commodity to keep ahead and the worker then asks more for the only commodity they have to sell - their skills and labour. Then the boss outsourcers to India and --- --- ---

Get the picture?

Reply to
R.Peffers.

One assumes he/she got paid for that warning.

Reply to
R.Peffers.

Where are they going to find rented accommodation? Actually the smart move is to panic everyone else into selling up and first rent your property out as flats and buy up the homes being sold to turn into more flats.

Reply to
R.Peffers.

So you don't know then.

More puerile drivel

Reply to
Crowley

You really are an angry little fellow aren't you ? Or is it that you already 'know it all' and don't need to listen to anyone else.

When people, whether so-called experts or not, express an opinion they are usually prepared to try to back them up. Something you have failed dismally to do so far.

Reply to
Crowley

Hmmm, so if you cant find one, then maybe houses arent overpriced after all and neither are rents too high? Though I'm not surprised there isnt one to rent in your scenario, since the HPC-proponents also think that BTL is a stupid idea so there shouldn't be anyone renting. For only 1 year, put up with something sub-optimal, put stuff in storage. Mopst people would do that for say 50% of the value of their house. If they believed the scare stories. Which they dont.

Well there will be after a massive crash obviously, you could buy it back at above the market rate and have people clamouring to sell to you. Think of all the new builds with builders just desperate to sell.

Why do you think I'm money obsesed? I'm not one of the people posting doom and gloom stories about HPC and economic crashes 10-15 times a day!

However, I make my point that just about every person you hear talking about a HPC doesnt actually take any action on it inspite of the fact that they could, for example, clear their mortgages, move to a better house, and so on. If they all think one is coming, why dont they do something to take advantage of it. If in say 1 years time, you are living in a house with massive negative equity you are going to look pretty stupid after telling everyone what was going to happen and then not getting out of the way of the oncoming wreck! "Hey look everyone there is a massive train heading straight towards me, and I'm just going to stand right here , and continue telling everyone about it until it runs right over me. And even as it does that, I'm still not going to move!

You should be able to find somewhere better you'll be cash rich. And the mortgage wont reduce the size of the gain at all. If your house was say 200k with a 200k mortgage, sell house for 200k, settle mortgage. 1 year later buy house for 100k, new mortgage 0k. Gain 0k. WIth no mortgage, gain is still 100k.

There is no point warning someone who wont do something when they receive the warning. And the whole issue about HPC *is* financial!! House **price** crash.

Reply to
Tumbleweed

Just one problem with that.

While you may agree that there is going to be a house price crash, you may concede that prices might go up a bit more before they crash.

You might also not know when exactly it is going to happen.

In this situation, you could still lose a lot of money on your spread bet even though you are subsequently proved right.

Reply to
Jonathan Bryce

If I had a book to sell?

Reply to
davidof

Given the readyness of most Brits to move or "trade up" I would say a large number of the population only view their current house as something temporary and so would be quite happy to go into a rented house for 12 months if they could pay off their current mortgage.

I own my house outright but if I believed prices would crash by 30-50% in the next 12 months I would sell up like a shot. I'm not money obsessed but I would be completely stupid not to; there are plenty of houses in my area which I would also like to live in. I do believe the current market is overvalued and have believed that since around 2002. The problem is we've been hearing HPC in the next 6 months stories for so long that it is clear that the experts have about as much clue as the punters. The fundementals seem wrong but thats it.

The Amex guy has a lecture circuit and a book to make money from so has good reason to over egg his cake. I don't trust experts who wont eat their own dogfood.

Reply to
davidof

So you've simply made one up to support your view then.

You may be correct in your assessment that this chap is wrong. But if you wish to claim that he is saying it just because it helps his business you have to have the proof. The chap is a financial professional he is perfectly entitled to come to view he has on the evidence alone, he is not the only person to have done so.

tim

Reply to
tim (in sweden)

By your own figures they are.

A house than in 1962 used to cost one times this person annual salary now costs three or more (you didn't put an upper limit on the value).

In some areas the price of starter homes is now 6 times average salaries. The people who think that houses are overpriced aren't (generally) suggesting that the price will go down to a level based upon some previous periods absolute prices, they are suggesting that the multiplier will decrease. A thirty percent reduction (from

6 times to 4 times) will still leave houses at historically very high level, but a 30% reduction in a 300K house is a large lump of (virtual) money to lose.

And this keeps house prices high, how?

tim

Reply to
tim (in sweden)

It is depressingly hard to find rental properties in the UK on terms that match the needs of the average 'established' individual.

Agents insist on no flexibility in leases, requiring back-to-back six month periods (or a year) with a new set of rip-off charges each time. But if you do want to move in for a long period, rarely do you get any real feel for how long you might be able to stay unless you sign up for a long time at the start, but then you have the possibility of needing to buy yourself out if plans (jobs) change.

So you either have to take a chance on needing to move (and pay the associated costs) each six months when the landlord decides that he doesn't want to rent anymore (or puts up the rent too much), or risk signing up for a number of years for a place that turns out to be a millstone.

Yes, I know that landlords, in for the long term, prepared to let to a good tenant (which simply means one that pays the rent on time) for as long as the tenant wants on a months notice, exisit. But finding them (in some areas) is next to impossible.

In Europe this type of rental is the absolute norm, IMHO it should be so in the UK too.

tim

Reply to
tim (in sweden)

Dogs don't eat cake.

Reply to
Troy Steadman

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.