oh dear: Housing bust ‘likely in next few years’

**expat** · 22 November 2006, 07:48

Originally posted by AtW

Housing bust ‘likely in next few years’

By Chris Giles, Economics Editor

A housing market bust is likely within the next few years because house price growth has been grounded in unrealistic expectations of double-digit annual rises, a report by a prominent economist and former adviser to Gordon Brown will warn on Wednesday.

Throwing cold water on the current housing market euphoria, David Miles, chief UK economist of Morgan Stanley, says it is only possible to explain the more than doubling of house prices in the past decade if people’s demand for housing has been heavily influenced by expectations that the rapid price rises would continue.

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My willingness to accept a fiver from you is heavily influenced by my expectation that otherw will continue to be willing to accept it from me. That doesn't stop the monetary system from working.

**wonderwaif** · 22 November 2006, 08:03

Keep hoping AtW.
Having been brave enough to enter the house market long ago I have absolutely no fear of negative equity, and some of us bought our houses to live in and it's 'worth' to me is all the money I continue to save in rent.

Edit: And no, I have no idea who has a spare £50,000.00 cash. Neither do I care.

**expat** · 22 November 2006, 08:15

Originally posted by wonderwaif

it's 'worth' to me is all the money I continue to save in rent.

over interest, shurely?

Rent = money down the drain.
Interest = what you pay to get something you want.

Rent = what you pay to get something you want.
Interest = money down the drain.

**wonderwaif** · 22 November 2006, 08:20

Originally posted by expat

over interest, shurely?

Rent = money down the drain.
Interest = what you pay to get something you want.

Rent = what you pay to get something you want.
Interest = money down the drain.

This has been done to death, so I'll let other people retread this ground..
I have no intention of detailing my finances as there is no need.
I'm quite happy for AtW to continue to hope for a property crash, and equally happy that for me buying beats renting by a huge margin.
You can all keep renting with my blessing, you can even feel smug about it if you like.

**expat** · 22 November 2006, 08:55

Originally posted by wonderwaif

This has been done to death, so I'll let other people retread this ground..
I have no intention of detailing my finances as there is no need.
I'm quite happy for AtW to continue to hope for a property crash, and equally happy that for me buying beats renting by a huge margin.
You can all keep renting with my blessing, you can even feel smug about it if you like.

Indeed it has. We do all seem to be in different situations. For example, as I remarked yesterday, I'm buying for non-financial reasons, and NOT happy about it financially.

**DimPrawn** · 22 November 2006, 08:55

Doomed!

**sunnysan** · 22 November 2006, 09:01

In a nutshell

Property will ALWAYS rise over the long term.

If you are looking to make a quick buck then maybe its not the time to take the plunge but over a 30 year period you are very unlikely to realise a loss on any property investment.

In 30 years time people will remeber fondly when you could buy a studio flat in the East End for 150K.

You can only really go on historical figures as nobody knows whats going to happen in the future.

In accounting terms owning a property is adding and asset to your portfolio and taking out a mortgage is essentially paying for an asset. Renting is a liability.

So yes there is a risk attached to owning property but ATW, isnt it the Russians that say , "he who risks , drinks champagne" or something like that.

**wendigo100** · 22 November 2006, 09:14

Originally posted by sunnysan

In accounting terms owning a property is adding and asset to your portfolio

Moderator! A word to sunnysan please, for using the p-word!

**tim123** · 22 November 2006, 09:18

Originally posted by sunnysan

Property will ALWAYS rise over the long term.

Really, why's that then.

I can accept that it's true that average property prices always rises.

But it certainly isn't true to say that *all* property prices will always rise. There are many examples of property in some areas reaching levels which are only justified because of some transitory reason, which then fall back when that reason disappears, never to reach the same heights again

Who's to say that: econonic stituation UK 200X, isn't a transitory reason.

BTW they used to say that there was no five year period where the stock market had lost money. They don't say that any more.

tim

oh dear: Housing bust ‘likely in next few years’