A big part of it for the metropolitan capitals can be what the exchange rate has done. Turkish lira has absolutely cratered in value. I’m not claiming knowledge of the Turkish housing market at all, but I do observe that it means houses in Istanbul must look very, very cheap to outsiders.
House price crash
- Thread starter ska invita
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ska invita
back on the other side
yeah but a 100% increase an relatively cheap is still less than 50% increase on already extortionate
shakespearegirl
just worked out taglines
Asking prices have dropped 10./. in our old street since we completed in September. The two houses on the market are much better renovated and presented than ours was..
Spymaster
Plastic Paddy
I'd treat figures like this with some scepticism. Is that the start or end of covid?
I keep an eye on property prices in several areas and everything has come down over the last 6 months, sometimes significantly. What's happening a lot less is people trying to sell for ridiculous prices. It used to be the case where you'd see a property come on to the market at 20-30% over where it should be and it stuck out like a sore thumb. Owners chancing their arms basically to see if they got a bite. That's stopped happening and things are being more sensibly priced generally but it's still not selling quickly and further reductions in 5-10% increments are commonplace.
MickiQ
In My Defence I was left Unsupervised
I can't see a massive drop in house prices myself (long overdue though I think it is). A lot of the house prices in recent years has been fueled by near free credit. That's over now so prices are starting to come down steadily but as they do people who were previously priced out are going to start finding houses are affordable so that will shore prices up again.
A truly massive drop is going to need a truly massive crisis and whilst times are hard for many at the moment we're not talking Great Depression. The people most likely to loose out over the coming year or two are going to be renters. The general opinion amongst landlords seems to be that they're not getting much love at the moment and the number is falling as they pull out reducing the amount of rented housing stock in a market where demand already exceeds supply. I know the plight of landlords is going to get most Urbs reaching for their violins but even with falling house prices, the effect of falling rental properties will cascade downwards pushing renters at the very bottom out as those at the very top grab the property ladder from above.
There are just not enough houses period and an even greater paucity of social housing. Not much is happening to resolve the first and nothing whatsoever to resolve the second.
A truly massive drop is going to need a truly massive crisis and whilst times are hard for many at the moment we're not talking Great Depression. The people most likely to loose out over the coming year or two are going to be renters. The general opinion amongst landlords seems to be that they're not getting much love at the moment and the number is falling as they pull out reducing the amount of rented housing stock in a market where demand already exceeds supply. I know the plight of landlords is going to get most Urbs reaching for their violins but even with falling house prices, the effect of falling rental properties will cascade downwards pushing renters at the very bottom out as those at the very top grab the property ladder from above.
There are just not enough houses period and an even greater paucity of social housing. Not much is happening to resolve the first and nothing whatsoever to resolve the second.
People have been saying there's going to be a crash for decades now and yet... Supply and demand. Landlords may well be selling (oh no!) but there are still many many people waiting to buy. And all the wealth tied up in 'boomer' properties is still sat waiting to be released to the next generation. And so it continues...
You literally can’t compare prices now to 1970 or 1980. The change in everything related makes it irrelevant. Just one example of many: the liberalisation of banking in the 1980s meant that people could borrow at much higher multiples than previously. Since house prices are determined by available credit, that just multiplied up the price of a house. That effect won’t reverse unless they go back to much tighter restrictions on lending multiples again.
You can make at least some level of comparisons over the post-2000s, wherein at least interest rates have never been crazy high and the banking system hasn’t been completely overhauled (much as it needed to post-2008). And over that period, the UK has been consistent with other nations, and rises have been somewhere between bond yields and equity returns. The latter should be irrelevant but it isn’t, because UK people see property as an investment
ska invita
back on the other side
The best stat is average house price to average wage ratio. Bottom line is you can buy a chateaux in France for cheap, ive seen it on tv
It’s not, though. Why reify that measure? It’s not a physical law.
It’s not cheap if you can’t borrow to get it. French maximum multiples are roughly three times income AFTER expenses (including their equivalent of council tax). That’s what I’m saying — prices depends on the availability of credit
Surely, it’s the only or one of the only metrics to consider when looking at property affordability. The borrow to earnings ratio multiple is insane.
Debt equals violence. David Greaver and all that.
It’s an odd way to look at affordability, to use a clumsy proxy. If you want to look at affordability then look at affordability — what are your monthly housing costs as a % of your monthly income? That particular stat hasn’t changed much over the years. More than anything else, it defines rents. And a house price can be calculated in terms of fundamentals if you know its rental yield and the risk-free yield curve.
Don’t get me wrong — I’m not saying that average house prices to average wage is irrelevant. It’s an important measure. It’s just not the only one that matters, or even the most important.
bimble
floofy
Does this mean in France they have completely different laws to us about how much banks are allowed to lend people for their motrtgages and that lending limit has kept house prices low ?
That’s right. We used to have completely different laws too. Thatcher gave the banks licence to lend much more based on the same joint income.
Monkeygrinder's Organ
Dodgy geezer swilling vapid lager
I don't think 'you can get a chateau for cheap in France' tells you a lot anyway tbh. France has large areas struggling with depopulation - it's not surprising you can get property relatively cheap there. Can you get a cheap house in Paris though?
Artaxerxes
Look out, he's got a gnu!
Centre for Cities report on the crisis.
www.centreforcities.org
Estimated 4.3 million unbuillt homes...
The housebuilding crisis - Centre for Cities
www.centreforcities.org
Estimated 4.3 million unbuillt homes...
bimble
floofy
Im curious about what the impact is of this sort of info being shared widely (guardian today):
I mean the more people get told that any house they buy now will not increase in value at all for years, will drop instead, that knowledge will have significant effects on people’s buying behaviour won’t it.
I mean the more people get told that any house they buy now will not increase in value at all for years, will drop instead, that knowledge will have significant effects on people’s buying behaviour won’t it.
Spymaster
Plastic Paddy
Where is that quote from?
bimble
floofy
Value of UK housing stock hit record £8.7tn in 2022
Annual rise of £425bn smaller than in previous two years, says Savills as it predicts fall in house prices in 2023
Winot
I wholeheartedley agree with your viewpoint
If any house ie a drop across the board then I don’t see why. If they want a house to live in then its value once you’re in doesn’t matter too much.
Spymaster
Plastic Paddy
Value of UK housing stock hit record £8.7tn in 2022
Annual rise of £425bn smaller than in previous two years, says Savills as it predicts fall in house prices in 2023www.theguardian.com
That’s the view of the head of price research for Savills, rather than Savills marketing department, so it’s just an honest piece. The journo asked questions and they gave answers.
It may well have the effect that you suggest on some buyers but the guy has taken the line of giving an accurate picture rather than attempting to support the housing market.
existentialist
Tired and unemotional
I'm broadly in agreement, but you only have to talk to a few (potential) house buyers to hear things like "sure, it might go down, but I'm not planning on moving soon, and it will recover". And, largely, they've been right, depending on how long-term their thinking was.
But what would I know? I bought both the properties I used to own at the bottom of the market.
Spymaster
Plastic Paddy
I agree with you. I think you’d be an idiot to buy a house right now but the fact is, people are still buying them. As existentialist says, if you’re buying the property as a home rather than an investment and don’t need a big mortgage, short term price drops aren’t going to be a huge concern.
Supine
Newt Member
I’m trying to buy one now
It doesn’t matter much if it goes down in price if you only own one property. It’s landlords who will want to offload extra properties at the moment.
8ball
Decolonise colons!
It’s also possible that so many first-timers who have been frustrated for years by the prices will jump in at the same time and this will ramp up the bargaining.
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