Mike4 wrote:BullDog wrote:Mike4 wrote:BullDog wrote:So, the market is red hot, overheating and this is surely the very peak of the market. A sustained period of house price stagnation has to be next. It always has been when it's been like this before.
I agree, stagnation could be is next but not a decline in prices. People just take their houses off the market rather than accept a price cut, most often.
We are Easter weekend, the start of massive housing market activity until the holiday season starts, then it dies on its feet until the kids go back to skool, then a brief surge of activity until thoughts turn to Xmas and it all dies down into doldrum territory again. SO for now, I predict a bit more rampant inflation.
Yes, there's no doubt currently there's a frenzy of seasonal house buying here. The last time I can remember anything quite like this was 1987 when every conversation seemed to involve a discussion about how much a person's house is worth that week. It was followed by a significant period of slowly declining or static at best house prices. I think we are likely going to see something akin to that from Q3 this year. The current buying frenzy is unsustainable.
Well of course it's unsustainable. All bull markets are unsustainable. Last time I saw it like this was 1997 to about 2007. Seemed like it would never end but the fin crash fixed that, predictably. I know that nice Mr Brown told everybody "No-one could have predicted what happened", but plenty of posters on TMF were predicting exactly what happened. The one thing they consistently got wrong was the "when" part. The crash callers started off about 1997 and they were a decade too early. As illustrated back then its easy to predict the future, predicting exactly when the future will happen is the hard part.
Just a function of inflation, interest rates, investment alternatives, and perceptions of whether the prosperity will continue unabated. If somebody had said back in the 1980s or 1990s, or 2000s that inflation would be 7%, and interest rates 0.75%, they would have thought the Central bankers had lost their minds. And indeed they have lost their collective minds. To kill this inflationary dragon, 9% will be needed. But which Central Banker who wants to keep his job and get a gong is going to suggest that?
Meanwhile British property remains probably the best hedge against inflation that there is, so more and more will invest more and more in it.