The Great 2007 Property Crash

[Mick Mac]

People refer to the crash....What crash.

Well I'm sorry but I don't see it in the better parts of SE22, for example:

1.75m under offer.

http://media.rightmove.co.uk/72k/71731/71731_L4P-470293671_IMG_00_0000.jpg

[Pearson]

? bargain!

was it through Foxtons ;)

[Mick Mac]

The prices on some roads on se22/se21 borders are incredible. But the price is what people are willing to pay, so all is fair in love, war and housebuying, good luck to them.

What I'm interested in is how many people were predicting 30/40% house price falls two or three years ago. It may have happened in some areas of the UK but it certainly has not happened in ED.

[Pearson]

As you say. Supply and demand.

I've never been to worried about drop in property prices as it's all relative really.

[katie1997]

Y-es Mick Mac. Houses are only ever worth what people are prepared to pay for them.

2007 did not see a drop in property prices in CM16. Fact*

* although probably less well-known than the Paper Cut Fact.

[Ridgley]

Lovely House Mick

[Narnia]

Are you moving then Mick?

[SeanMacGabhann]

Mick started this thread specifically to welcome quids back to Thursday

FACT

I suspect some properties (flats at the lower end) may have dropped quite a lot in price

[Mick Mac]

He likes his financial threads.

There seems to have been a rise in price in flats in ED over the last year. Maybe not quite clawed back everything, but may not be far off.

Anyway the 35% falls that many were predicting have not happended here.

[karter]

Indeed Sean and they should drop lower.

[mockney piers]

"Houses are only ever worth what people are prepared to pay for them"

As I'm embarking on building one I can tell you that there are significant intellectual property, labour and raw material costs involved, it's not entirely a conceptual opportunity cost believe it or not!

[Keef]

It is when they're second hand.

[Ridgley]

What do you class, as the lower end in ED Sean they are all pricy in this area?

[DJKillaQueen]

"Houses are only ever worth what people are prepared to pay for them"

They are also only worth what multiple of salary banks are prepared to lend, somthing that will have a ceiling limit evntually. The level of growth enjoyed by the baby boomers won't continue, bcause it can't.

[SeanMacGabhann]

The lower end of the scale for this area, Ridge. Not lower as in ?ooh look 50k for a one bedroom flat close to the station ? result?

I agree with you that this still makes them unaffordable for most, which is why the prices are either coming down or the properties aren?t shifting. We tried to sell a while back and in the end figured it wasn?t going to happen

[Ridgley]

Thanks for clarifying, sorry you could not sell your home it is a difficult time.

[katie1997]

mockney piers Wrote:

-------------------------------------------------------

> "Houses are only ever worth what people are

> prepared to pay for them"

>

> As I'm embarking on building one I can tell you

> that there are significant intellectual property,

> labour and raw material costs involved, it's not

> entirely a conceptual opportunity cost believe it

> or not!

mockney - I can believe this cost is not entirely conceptual, speaking as someone who has previously embarked on building one, albeit not in SE22. Wish you lots of luck with it.

[*Bob*]

Yes, good luck Mockers!

Give me a shout if you run out of Duplo - I think we have a box in the loft.

[Jeremy]

The local market did indeed drop... it recovered a bit, but the lower end is still down from the peak.

A bit of a drop is probably a good thing though.

[Belle]

we're looking at the moment and have noticed far more reduced asking prices in the last month or two than we've seen before. Plus, it's always interesting to look on www.houseprices.co.uk as you can see the actual price the house sold for, there are some suprising (and for us, encouraging) figures there.

[HAL9000]

The Sterling price of a UK asset (such as a residential property) has fallen more than 30% against the price of Gold (used here as an international benchmark) since the beginning of the 2008 Financial Crisis (all else being equal).

In other words, if one had sold a house at the peak and invested in Gold bullion their asset value would now be over 30% greater (or as much as 36% with perfect timing) - assuming UK house prices had remained unchanged during that period.

[womanofdulwich]

how easy is it to buy, keep safely and then sell that much gold? ie entry, keeping and exit costs vis a vis a house? any idea? you make it sound so good!

[*Bob*]

Easy - you just build a house out of the gold - and live in it.

[HAL9000]

womanofdulwich Wrote:

-------------------------------------------------------

> how easy is it to buy, keep safely and then sell

> that much gold?

Very easy - many companies and banks provide various levels of service: but speculating in Gold is not a game for widows and orphans, when the price breaks, as it does periodically, it can move up or down like greased lightning.

[????]

...and do gold investment companies put you and your family up once you've sold your gaff and turned it into gold>

Back in the real world..... Mick I think your a bit delusional about the solidity of the uk housing market, at the top we are going to run out of rich bankers, footballers etc etc with the resolve or even need to buy up any more property, and at the bottom young middleclass Londoners (forget anyone else even having a vague chance) will be faced with graduate fees, increased direct and indirect taxation and the growing realisation that they'll have bugger all to retire on meaning that they won't be able or as keen to put down deposits ..the FTBuyers market is drying up - ask people trying to sell flats in ED -, the huge increases in property that have helped mere mortals who don't work in the city but were lucky enough to take the first step on the ladder when it was vaguely in touch with reality, and have benneffoited from a massive asset increase which has at helped them move up to next stage has now gone leaving the majority of even well paid people who don't own way, way behind....we'll end (and are ending up) with a growing number of empty nesters trying to offload their houses to a load of young families squashed up in smaller non-family flats that they can't get rid off.....in the end prices will fall. You just can't keep finding people with the ?100,000k 10% deposits and ?250,000k joint annual income to buy ?1.2 million houses in what is, after all, a pleasant but not that spectatcular suburb in SE London. We are the only country whose property bubble hasn't burst...although its unwound a bit but I still believe it's very possible and certainly the period of massive accumulation of wealth by holding property has gone (until another crash takes us below long term 'sensible' prices - personally, I think the best you can hope for is static and probably small falls in nominal prices, which is a decline in real terms.

This is aside from the wider position and fact that it's being propped up by QE etc long enough for our banks to rebuild their asset positions and recaptilise before a slump completlet buggers up their balance sheets.....in some ways this is not a bad thing in stopping catastrophe 2 years ago but you can't beat market forces for ever....