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House prices dependent on oil?

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  • House prices dependent on oil?

    Here's an interesting post I read the other day:
    The Mischief of the Cheap Money Bubble » The Daily Reckoning Australia

    The suggestion is that UK property prices are very much reliant on the oil boom, with money from the Middle East being used to purchase from the London property market, which then ripples out across the UK.

    As we're in a period of sustained high oil prices, the suggestion from our Aussie friends is that the UK property trend will be maintained.

    Certainly an interesting perspective, if nothing else.

  • #2
    I would think things such as groceries, and other consumables, might be dependent upon the oil prices for the rise in prices, but I don't see how property values and prices would be affected by it. Interesting idea.

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    • #3
      Just want we need another thing controled buy oil prices. But it is something I had never thought of. Interesting to say the least.

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      • #4
        Of course, politics or a change in politics could effect all that too. But oil is political too lol.

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        • #5
          Originally posted by vicki2 View Post
          Of course, politics or a change in politics could effect all that too. But oil is political too lol.
          what if there's a change in politic but still didn't work out?

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          • #6
            Sadly it seems like everything is political anymore. It gets so old after awhile if you ask me.

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            • #7
              I wonder what will happen when the oil finally runs so low that it just isnt ecconomically viable any longer...

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              • #8
                I think that I will see that in my lifetime.

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                • #9
                  They have a point, but come on, how much property in London can one buy? Surely not enough to sustain a market!
                  Government Authorised Property Real Estate Agents in Kefalonia, Greece.

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                  • #10
                    Must affect things

                    Well even if the wealth abroad and foreign investors doesn't push up the prices, the fact that we spend more and more of our disposable income on fuel means we have less to spend on our homes and contents? Maybe this redresses the balance a little.

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                    • #11
                      Well I guess it makes sense to me...everything effects everything else in the world somehow. A direct link between the two might seem a bit exaggerated to me though.

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                      • #12
                        Originally posted by braegheneffe View Post
                        Well even if the wealth abroad and foreign investors doesn't push up the prices, the fact that we spend more and more of our disposable income on fuel means we have less to spend on our homes and contents? Maybe this redresses the balance a little.
                        True - I guess anything that pushes up prices ( and redirects investments awy from property ) will affect house prices generally.

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                        • #13
                          I think one of the reasons that central London property prices are holding up better than the rest of the UK is that food and transport costs, as a proportion of income, are less significant to an investment banker on, say, 100,000 + pa than a family on average earnings. The only reason that "RPI" is in single fingers is that wealthier persons' inflation is actually far, far less than real inflation where families are spending a substantial proportion of their income on fuel, food and transport - not to mention borrowing costs. In Kensington, Chelsea and Westminster etc fewer people have been dependant on very high loan to value mortgages.

                          It paints a worrying picture of affordability across much of the UK. Given the finite stock of housing across the UK (even with rushed plans for "ECO Towns") I can't see rents falling either. It looks like it may be the High Street retailers that are going to take the hit - with consequent repercussions on employment.

                          Interesting times.

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