Is a price crash/ major correction coming

[2buyornot2buy]

5 minutes ago, headmelter said:

BTC punt was a cracker... I kick myself for not buying when it was $30 in 2011 but still not a believer so won't cry over spilled milk...

I've been toying with the idea of moving but EA valuations are way out of kilter in my view but what I believed just a fortnight ago I'm now not so sure about. A few houses I went to view have since gone sale agreed... There's a bubbly feel about property but with IR's at such low levels it could well turn out to be an effective inflation hedge...

I've been a buyer of the shiney stuff & am probably overweight in Ag but will continue to swap fiat for hard assets... I'm prepared to wait until Sept/Oct before making a decision so fingers crossed things will be a bit clearer by then.

I'll keep the BTC until it goes to £650 or until I'm retired. It was an absolute punt.

I have a house with a small mortgage I can die in. My dream out of all this is I can retire (not need to actually work to live) with a decent lifestyle at 50.

[headmelter]

12 minutes ago, 2buyornot2buy said:

I'll keep the BTC until it goes to £650 or until I'm retired. It was an absolute punt.

I have a house with a small mortgage I can die in. My dream out of all this is I can retire (not need to actually work to live) with a decent lifestyle at 50.

A little late arrival prevented me from cashing in my chips & retiring @ 50 but the dream before 60 is still alive.😂😂

[2buyornot2buy]

15 minutes ago, headmelter said:

A little late arrival prevented me from cashing in my chips & retiring @ 50 but the dream before 60 is still alive.😂😂

Childcare at 1k a month each certainly sets you back.

Wonder is the snip available on BUPA?

[headmelter]

1 minute ago, 2buyornot2buy said:

Childcare at 1k a month each certainly sets you back.

Wonder is the snip available on BUPA?

I have 4.... the last 1 was a shock after a 7 year gap... I still haven't fully recovered.😂😂

[2buyornot2buy]

2 minutes ago, headmelter said:

I have 4.... the last 1 was a shock after a 7 year gap... I still haven't fully recovered.😂😂

Sweet Lord. If you ever setup a gofundme I'll be happy to contribute. 😆

In saying that, I'd happily work another 20 years if the choice was having them or not.

[JoeDavola]

If this keeps going some of these wee terraced houses are gonna end up at double the rateable value:

https://www.propertypal.com/22-eastleigh-dale-ballyhackamore-belfast/691302

[Sure thing!]

2 hours ago, JoeDavola said:

If this keeps going some of these wee terraced houses are gonna end up at double the rateable value:

https://www.propertypal.com/22-eastleigh-dale-ballyhackamore-belfast/691302

A conversation with an excitable person at work talking about how much their house was "earning" them gave me a 2006/7 chill and cause to dust off the account here. Double rateable value was when the wheels fell off last time?

[JoeDavola]

1 hour ago, Sure thing! said:

A conversation with an excitable person at work talking about how much their house was "earning" them gave me a 2006/7 chill and cause to dust off the account here. Double rateable value was when the wheels fell off last time?

Yes quite possibly. The only example I can think of is my parents old house. Rateable value 160K, peaked at 320K, sold about 7 years ago for 170K and only had one offer at that, now would be worth about 270K if similar houses listed recently are anything to go by.

I have no faith any more that prices will crash. Too many government schemes to prop up the bubble. Help to buy seems tame now compared to government-guaranteed 5% mortgages. They've made it quite clear they'll throw everything at keeping this inflating.

[Data Dave]

Prices in Belfast are still 'cheaper' in relative terms than surrounding areas. So you wait a year and prices, say, go up another 10%. For them to 'crash' 10% the next year and you sort of back where you started. Except you have a year paid off your mortgage? Any benefits I dont know...?

Put it this way, the government and their policies are currently fully behind supporting house price inflation.

Source: Land Registry [reported quarterly]

[JoeDavola]

4 minutes ago, Data Dave said:

Prices in Belfast are still 'cheaper' in relative terms than surrounding areas.

I'd assume what's being compared there are the 3 most expesive areas of NI - Belfast still seems more expensive than most parts of NI IMO.

Your point about the opportunity cost of paying rent every year is perfectly valid. Prices would have to fall faster than the money you're blowing on rent.

The other factor I guess is that many houses on sale are fixer-uppers, and I'm hearing a few reports of people being surprised at how high the quotes are from tradesmen to get work done these days.

[satsuma]

Its hilarious at the moment, there are building sites all about that noone would have wanted, Could not give them away. Now when you pass there are groups gathering and pointing excitedly at the "potential". Frigging muppets the lot. And what has changed from three years ago, what has changed is that more businesses have gone bust. Where will it end. Tears before bedtime.

[Data Dave]

Food for thought for the 'buy or rent' debate

Source:https://www.ulster.ac.uk/__data/assets/pdf_file/0006/828051/1779_AHSS_PrivateRentalReport_H1-2020_DIGITAL.pdf

Source: https://www.ulster.ac.uk/__data/assets/pdf_file/0004/861223/UU_HPI_Q1-2021-4MB.pdf

[Uchimata]

The USA inflation rate hit 4.2% in April, money printing put an extra $3 Trillion into circulation last year. Some people are bracing for hyper-inflation.

Are the UK/EU doing the same thing?

[JoeDavola]

18 hours ago, Uchimata said:

The USA inflation rate hit 4.2% in April, money printing put an extra $3 Trillion into circulation last year. Some people are bracing for hyper-inflation.

Are the UK/EU doing the same thing?

https://www.theguardian.com/business/2021/may/13/top-bank-of-england-economist-warns-of-1970s-style-price-inflation

Quote

Inflation would inflict “collateral damage on our finances, squeezing the purchasing power of our pay and causing rises in the cost of borrowing” and in response, the Bank of England should rein in plans to inject almost £1tn of electronic cash into the economy by the end of the year.

[Data Dave]

22 hours ago, Uchimata said:

The USA inflation rate hit 4.2% in April, money printing put an extra $3 Trillion into circulation last year. Some people are bracing for hyper-inflation.

Are the UK/EU doing the same thing?

4.2% wow, whats been the largest contribution to that figure, where are you really seeing prices rise, food?

Well 'our' inflation rate [CPI] 'only' rose by 1% from March 20-March21 and 0.3% MoM from Feb21-Mar21. So we arent quite at US levels currently.

[Uchimata]

58 minutes ago, Data Dave said:

4.2% wow, whats been the largest contribution to that figure, where are you really seeing prices rise, food?

Well 'our' inflation rate [CPI] 'only' rose by 1% from March 20-March21 and 0.3% MoM from Feb21-Mar21. So we arent quite at US levels currently.

I remember reading supermarket prices are up ~10%, it definitely feels like that. Petrol (Gas) prices have nearly doubled in the last year and used car prices have increased 10% due to supply drying up.

It may be the "free money" stimulus checks having an affect or the money printing, but you do notice the increases, I'll not even start on the house prices...

[Data Dave]

Seems Q.E inflation, aswell as Covid-19 related inflation [issues with production & supply chain etc] is coming home to roost.

On 5/13/2021 at 11:24 PM, Uchimata said:

I'll not even start on the house prices...

Yes, house prices, it could have just kicked off the greatest bull run in recent times, with the perfect storm of low IR's, high consumer savings, availability of credit and limited supply of housing stock.

[Uchimata]

10 hours ago, Data Dave said:

Yes, house prices, it could have just kicked off the greatest bull run in recent times, with the perfect storm of low IR's, high consumer savings, availability of credit and limited supply of housing stock.

30 Year Fixed rate mortgages are ~2% at the moment, the Fed indicate they will be kept low for the next 5 years.

With the money printing, not sure how this will all end...

[fuzzy_bear]

On 13/05/2021 at 23:24, Uchimata said:

Petrol (Gas) prices have nearly doubled in the last year

You what??

Petrol currently at 126 p/litre (UK average) - up from a low of approx 100p/litre in the earliest stages of the pandemic 2020

https://www.gov.uk/government/statistical-data-sets/oil-and-petroleum-products-weekly-statistics

[JoeDavola]

Some friends sale agreed their house (owned outright) about 6 months ago for a decent profit on what they paid 6 years back but still haven't sold and moved because there's nothing on the market that represents decent value without adding tens of thousands of extra debt to get something basically the same/inferior to what they have.

It's quite something to see someone with tons of equity in the market effecively still priced out from a mixture of ridiculous asking prices and absolute dross that's falling to bits but still asking big prices.

[Noah]

Do we think today's 0.5 interest rate rise will have any effect on Northern Ireland house prices? Surely at some stage rising interest rates have to lead to reduced house prices, is it that the supply demand imbalance is so large that prices will keep going up?

[2buyornot2buy]

7 hours ago, Noah said:

Do we think today's 0.5 interest rate rise will have any effect on Northern Ireland house prices? Surely at some stage rising interest rates have to lead to reduced house prices, is it that the supply demand imbalance is so large that prices will keep going up?

We'll have to wait and see. It's actually 6 increases in base rate, with another probably coming in 6 weeks.

The BOE are calling a recession and unemployment pretty much doubling. What effect this will have on supply, I've no idea but I don't see any upsides for house prices.

[upanddownagain]

There's no doubt the obvious value - where you could buy with 10 year fixed at under rental levels - has evaporated. But if Halifax today has NI up 14% year on year that's not actually a huge jump in real terms. You also get a momentum with rising prices as it gives people much faster rising equity that enables (tempts?) them on to more of the same. I would go for some continuation of rises, though probably more in the 'good condition in good area' rather than riskier sector

[2buyornot2buy]

4 minutes ago, upanddownagain said:

There's no doubt the obvious value - where you could buy with 10 year fixed at under rental levels - has evaporated. But if Halifax today has NI up 14% year on year that's not actually a huge jump in real terms. You also get a momentum with rising prices as it gives people much faster rising equity that enables (tempts?) them on to more of the same. I would go for some continuation of rises, though probably more in the 'good condition in good area' rather than riskier sector

I think we're going to be looking at stagnant prices and a big reduction in volume for the next 12 months while people adopt a wait and see approach. Winter will be a write-off for the EAs this year.

[JoeDavola]

On 05/08/2022 at 12:42, 2buyornot2buy said:

I think we're going to be looking at stagnant prices and a big reduction in volume for the next 12 months while people adopt a wait and see approach. Winter will be a write-off for the EAs this year.

I do wonder how some of these EA's are staying in business given the low transaction volumes - they must be making their money from management of lettings?

So much of what's coming on the market is absolute garbage but I can see the housing market here stumbling along in this kind of limbo for years to be honest.

I think you're right winter of this year will be dead; nothing but probates most of which are renovation projects that they're still looking a quarter million for.