Property Market Price Outlook

[absolutezero]

I can't see why property prices will fall.

House building shares are a good two-year forward indicator.
They have lost about a third to 40% of their value from peak.
The market sees what is coming and has discounted the builders accordingly.

.....and what occoured to prices when that happened in the past......a slight hiccup & then......onwards and upwards.

It really is different this time. Think mid 90s rather than recent times.
The era of cheap and freely available debt is over.

[richlist]

Those people who predict a property price fall......if they do it loud enough and for long enough then, they might eventually achieve a small degree of success. But, the many thousands of times that they will have falsely cried wolf in the past will be long forgotten as they hold their hands high and declare ' I told you so'.

[absolutezero]

Those people who predict a property price fall......if they do it loud enough and for long enough then, they might eventually achieve a small degree of success. But, the many thousands of times that they will have falsely cried wolf in the past will be long forgotten as they hold their hands high and declare ' I told you so'.

Burying one's head in the sand does leave other parts vulnerable.

[CliffEdge]

Why would anyone sell their house when property prices have fallen? They won't, so property prices won't fall. Price rises might not keep up with the overall cost of living though, I agree with that.

[absolutezero]

Why would anyone sell their house when property prices have fallen? They won't, so property prices won't fall. Price rises might not keep up with the overall cost of living though, I agree with that.

Not everyone voluntarily sells. Deaths. Divorces. Movements. Repossessions.
House prices are set at the margin, remember.

See also shares. 'Why would anyone sell when the price has fallen?'

[absolutezero]

This is good.
https://www.bloomberg.com/news/articles/2022-08-26/alarm-bells-ring-for-uk-housing-as-signs-point-to-falling-prices

[richlist]

I can't see why property prices will fall.

House building shares are a good two-year forward indicator.
They have lost about a third to 40% of their value from peak.
The market sees what is coming and has discounted the builders accordingly.

.....and what occoured to prices when that happened in the past......a slight hiccup & then......onwards and upwards.

It really is different this time. Think mid 90s rather than recent times.
The era of cheap and freely available debt is over.

Wasnt the case in the past... let's see.....early 1970's, all thru the 1980's, 1990, mid 1990's, 2008. Every time there was an economic issue the property doomsayers would be out in force predicting serious problems. Carry on......you are bound to be right eventually !

[CliffEdge]

Why would anyone sell their house when property prices have fallen? They won't, so property prices won't fall. Price rises might not keep up with the overall cost of living though, I agree with that.

Not everyone voluntarily sells. Deaths. Divorces. Movements. Repossessions.
House prices are set at the margin, remember.

See also shares. 'Why would anyone sell when the price has fallen?'

The margin includes buyers. People don't live in shares. We don't have a subprime mortgage problem in this country.

[Tara]

Why would anyone sell their house when property prices have fallen? They won't, so property prices won't fall. Price rises might not keep up with the overall cost of living though, I agree with that.

This does not make any sense. It is like saying “ Why would anyone sell Bitcoin when Bitcoin has fallen by 50%? They won’t, so Bitcoin won’t fall!”. Quite absurd.

[Tara]

Those people who predict a property price fall......if they do it loud enough and for long enough then, they might eventually achieve a small degree of success. But, the many thousands of times that they will have falsely cried wolf in the past will be long forgotten as they hold their hands high and declare ' I told you so'.

Well you probably know the story then. Eventually the wolf does come. And UK house prices will fall. House prices are already collapsing in many locations in the US and Australia.

[richlist]

There is a group of people who continuously predict property prices are far to high and will collapse. The group comprises of people who don't own property but who relish the idea of a complete collapse in values. I've come across them many times in the past. I can only assume their enthusiasm is driven by jealousy or a belief that it will provide them with an opportunity to buy.

[Mike4]

This is good.
https://www.bloomberg.com/news/articles/2022-08-26/alarm-bells-ring-for-uk-housing-as-signs-point-to-falling-prices

Thank goodness for that. Falling prices = rising rents.

It's already happening. I've just re-let a very nice studio flat in Reading for £695 a month.

Three years ago it was only making £500, Goodness knows what the market rate will be once everyone is scared witless to buy due to falling prices!

[Tara]

There is a group of people who continuously predict property prices are far to high and will collapse. The group comprises of people who don't own property but who relish the idea of a complete collapse in values. I've come across them many times in the past. I can only assume their enthusiasm is driven by jealousy or a belief that it will provide them with an opportunity to buy.

And of course the landlords who make money out of property are all blameless people and they have no other motive.

The main motivation of landlords is of course making money at the expense of those who are less fortunate, and that is the reason why so many of them are called “greedy” landlords.

[Mike4]

There is a group of people who continuously predict property prices are far to high and will collapse. The group comprises of people who don't own property but who relish the idea of a complete collapse in values. I've come across them many times in the past. I can only assume their enthusiasm is driven by jealousy or a belief that it will provide them with an opportunity to buy.

And of course the landlords who make money out of property are all blameless people and they have no other motive.

The main motivation of landlords is of course making money at the expense of those who are less fortunate, and that is the reason why so many of them are called “greedy” landlords.

Nobody is forcing tenants to rent from us. Or not from me anyway.

Nothing is stopping them buying instead, if they resent paying rent.

[Wuffle]

The OP enquired about nice, holiday let's by the coast.
The answers are here but have got lost.

The market for these is likely solid because it is buoyed by the section of society who have benefited from 15 years of nominal interest rates to the extent that they have moved into a different league. It is as though none of you have read another post on TLF. Intergenerational wealth is now widespread and real, and they own nice holiday let's by the coast.

Talk of multiples to average income is unhelpful because the millions toiling at or close to minimum wage are not in the market for property, though once we're. Uncomfortable as it may be for the landlord, investment and exploitation are bedfellows and a considerable slice of western economies are now forced to rent because the better paid jobs go to the children of people who own holiday lets.

Bifurcation, applicable to science and economics.
And holiday lets by the coast.

W.

[Wuffle]

Bugger, I missed a couple of 'let's' in the 1st paragraph.

W.

[Dod101]

There is a group of people who continuously predict property prices are far to high and will collapse. The group comprises of people who don't own property but who relish the idea of a complete collapse in values. I've come across them many times in the past. I can only assume their enthusiasm is driven by jealousy or a belief that it will provide them with an opportunity to buy.

And of course the landlords who make money out of property are all blameless people and they have no other motive.

The main motivation of landlords is of course making money at the expense of those who are less fortunate, and that is the reason why so many of them are called “greedy” landlords.

Why are you implying that people who rent are 'less fortunate' ? That is one of the myths in this country, that people who rent cannot afford to buy otherwise they would. This is a mindset only as far as I know shared in this country. Landlords are not 'making money at the expense of those who are less fortunate'; they are fulfilling a need and a desire. This is how a capitalist society works.

Dod

[Dod101]

This is good.
https://www.bloomberg.com/news/articles/2022-08-26/alarm-bells-ring-for-uk-housing-as-signs-point-to-falling-prices

Thank goodness for that. Falling prices = rising rents.

It's already happening. I've just re-let a very nice studio flat in Reading for £695 a month.

Three years ago it was only making £500, Goodness knows what the market rate will be once everyone is scared witless to buy due to falling prices!

Why do falling prices equal rising rents, (except on yield of course) Falling property prices ought to mean more people can afford to buy.

What you may mean is that falling prices are an indicator that people cannot afford to make offers for property and so demand to buy is weakening. Those same people are thus forced to rent so increasing demand for rental properties, and rents tend to rise.

Or of course that the general economic situation (or their own) means that they chose not to buy and prefer to rent.

Dod

[Mike4]

Why do falling prices equal rising rents, (except on yield of course) Falling property prices ought to mean more people can afford to buy.

I don't have an explanation of why it happens. Its something I've noticed over 25 years investing in property. When the property sales smarket talls or goes into reverse, rents tend to rise. And vice versa. During the meteoric rise in prices starting in the late 90s, rents around here were broadly static for a decade.

You could well be right about the reasons.


Edit to add a missing word!

[Dod101]

Why do falling prices equal rising rents, (except on yield of course) Falling property prices ought to mean more people can afford to buy.

I don't have an explanation of why it happens. Its something I've noticed over 25 years investing in property. When the property sales smarket talls or goes into reverse, rents tend to rise. And vice versa. During the meteoric rise in prices starting in the late 90s, rents around here were broadly static for a decade.

You could well be right about the reasons.


Edit to add a missing word!

I am not trying to be clever. What you say is interesting but when prices fall it ought to produce an increased demand The housing market is not a 'normal' market, though. There is a FOMO effect I think. It would probably be helpful for Government of somebody to advise buyers of how markets actually work. I remember, when I bought my last house, a big step up valuewise from my previous one, I took advantage of a slump in the demand for North Sea oil and was happy to relieve a younger couple of their rather expensive house when they were forced sellers close to one Christmas, he having lost his job. I discovered afterwards that he of course had a very big mortgage and could not service it. I had access to cash and was thus effectively a cash buyer. That is how markets are supposed to work.

Dod