Originally Posted by KJinDoha (Post 12072499)

House prices will need to drop for the British society at large. The question is how and when.

It is clear that the current government will not want to get on the wrong side of the landlords, so they are not regulating enough (for example to build the number of houses that is needed or to really tax landlords). Perhaps the population and economy size post brexit will help.

In any case the market will inevitably correct when Toxic mortgages, due to fundamental un-affordability and lender greed, overflow. The question is, when will this happen?

Originally Posted by KJinDoha (Post 12072505)

And thank goodness! It is the equities markets that caused the majority of the damage. Over stretched institutions failed, tax money bailed some banks, leading to massive job losses and a nose dive in sentiment.

At least the housing market has a tangible value and serves an every day purpose. That's why it never plummeted.

In the next correction - the equities and such like are being tightly regulated so the damage will be spread towards housing. Who does that help?... the Bankers!

Originally Posted by KJinDoha (Post 12072505)

At least the housing market has a tangible value and serves an every day purpose. That's why it never plummeted.

Originally Posted by Scamp (Post 12072512)

Toxic mortgages played their part in the 08 crash, not just equities, they made it many times worse with the bundling of awful mortgages but the root problem was overlending.

Lots of cities are 20% landlord owned in the UK now.

I would think that at the moment there needs to be a slow down in property prices but an increase in wage inflation (or any combination that brings property in the UK back towards a sensible multiplier of average salary).

Originally Posted by weasel decentral (Post 12072513)

That tangibility is an illusion just as much as stocks and shares imo.

Originally Posted by weasel decentral (Post 12072513)

That tangibility is an illusion just as much as stocks and shares imo.

Originally Posted by Scamp (Post 12072521)

Welcome back...

Originally Posted by KJinDoha (Post 12072524)

I hope this does not come to bear. An over-leveraged housing market (excluding the reselling of that debt) is a scary reality.

Originally Posted by weasel decentral (Post 12072530)

It's not even about leveraging after the fact, there are very few residential developments that have a linked relationship with the cost to build price. Just as share prices do not seem to have a relationship with actual earnings.

Originally Posted by weasel decentral (Post 12072492)

Go on then what's real terms? Do you expect wages to rise while house prices are stationary, or real terms when measured against the dollar or euro?

Originally Posted by KJinDoha (Post 12072519)

Agree 100%

Ps. how do you quote multiple sources in one post?

Originally Posted by weasel decentral (Post 12072525)

;) Cheers.

I like to throw my big oar in every now and then. Not that I am in the ME any more but this forum still has some action in it from time to time.

Originally Posted by weasel decentral (Post 12072513)

That tangibility is an illusion just as much as stocks and shares imo.

Originally Posted by KJinDoha (Post 12072537)

Well, I don't think there are any developments where a higher build cost home is priced below a lower build cost home.

In terms of the price of housing being so much more than the build cost, I agree this is too far removed. Where do those margins go??

It is about supply and demand of course. Government should more closely manage supply at this stage, given the relationship with actual earnings. But perhaps the Brit ideal of home ownership will adjust.

Originally Posted by Millhouse (Post 12072538)

I've missed you.

What do you think the aim of the minimum wage is? If we can also create better internal demand that will help too.

Wages have hardly increased since 2007. House prices are over 20x average earnings in some places. A crash won't come soon though - no government will allow that.

Originally Posted by Scamp (Post 12072541)

Where are you now then?

Originally Posted by weasel decentral (Post 12072543)

About 50% of my last developments have sold way below build cost, admittedly due to the collapse of the developer in most cases. Removal of the first developer fully de-linked the cost to build from the sale price.