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The next property surge?

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  • The next property surge?

    I would welcome views about the likely date for the next property surge? - pundits offer various guesses with little agreement. A graph in The Property Development Handbook quotes previous peaks in 1973; 1979; 1989 and 2003, which suggests it could be a couple of years yet?

  • #2
    Re: The next property surge?

    It's a good question - but note the differences between the dates:

    6 years
    10 years
    14 years

    Looking at the current situation, property prices need to fall around 20% just to reach their normal trend level against earnings.

    However, also note that earnings are now coming down due to pay freezes and similar that are cutting their real value.

    So property prices continue far ahead of their normal earnings trend, which the earnings trend drops further.

    Not a good sign, IMO.

    At least in the USA the market appears to be potentially normalising - slow, but no longer any really big drops, but only after falls of around 30-40%. They're a couple of years ahead of us in the devaluing process IMO, and we aren't even half way there yet.

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    • #3
      Re: The next property surge?

      About half a million public sector workers are to lose their jobs. The government hope the private sector will create new jobs to make up for the loss. There is no evidence of this happening yet. There is a pay freeze in the public sector, and pay in other sectors of the economy is not matching inflation. Interest rates are at a record low but soon the Bank of England will need to raise rates to choke off rising inflation. I would guess house prices are likely to fall.

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      • #4
        Re: The next property surge?

        Property oprices will fall before they rise again imo.
        So if prices fell 20% then they would then have to rise by 25% to be back where they were.

        Buy for a home not for an investment. All this speculating is what caused the mess in the first place.
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        • #5
          Re: The next property surge?

          That's good advice from NHE. There's never a bad time to buy if it's for somewhere to live in.
          Free Guides For First Time Buyers!

          www.FirstTimeBuyerGuru.com

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          • #6
            Re: The next property surge?

            Hi Shaxi

            My point really is that if you buy a home now then it goes up and down with the market, so as long as it's a home then from that point onwards it really doesn't make any difference. You're right that buying at the right time INITIALLY makes a difference, but that's really where the relevance stops. In order to buy at the trough, sell at the peak and then buy at the trough again requires moving into rented accommodation whilst you wait for the second trough, which of course is ridiculous, not to mention utterly speculative. If you're getting a BTL property, then there absolutely IS a right time to buy. To conclude, i'd like to offer your theory to those who bought homes in 2007 and are now desperate to move.
            Free Guides For First Time Buyers!

            www.FirstTimeBuyerGuru.com

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            • #7
              Re: The next property surge?

              safe as houses ? if investors are not buying gold, where do they invest ?

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              • #8
                Re: The next property surge?

                That's the million dollar question!
                Free Guides For First Time Buyers!

                www.FirstTimeBuyerGuru.com

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                • #9
                  Re: The next property surge?

                  In our opinion prices will remain flat with regional variances. The strong rental demand due to first time buyers being priced out will ensure buy to let investors will still buy if the price is right. The next property price surge is likely to be some years away, but as history has shown in the long term prices will go up.

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                  • #10
                    Re: The next property surge?

                    If there could be a tweet representative of the entire market...current and future...then that would be it! I absolutely agree with you. People always forget the issue of regional variation..
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                    www.FirstTimeBuyerGuru.com

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                    • #11
                      Re: The next property surge?

                      Price Waterhouse Coopers were predicting a return to 2007 prices by 2020.

                      I believe prices will gradually fall for a few years yet before slowly starting to rise. The UK housing bubble is yet to deflate properly like the other bubbles in US, Ireland and Spain. So best waiting a few years yet before buying.

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                      • #12
                        Re: The next property surge?

                        You're absolutely right Simon, but it depends on people's personal circumstances and where they're intending to buy. If buyers are intending to stay in a newly bought property for several years at least, then paying rent for several years to hold out until the market corrects itself may be a false economy.

                        Of course, at the end of the day, it's all difficult to predict. You're certainly correct that something's got to give! Especially for first time buyers.
                        Free Guides For First Time Buyers!

                        www.FirstTimeBuyerGuru.com

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                        • #13
                          Re: The next property surge?

                          In my opinion in the next 8 years

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                          • #14
                            Re: The next property surge?

                            That's probably not a bad estimate. Maybe a little too long in the future. People, and more importantly mortgage lenders, need to have enough time to forget that house price crashes can actually happen. Only then will everyone forget the lessons learned. It's a shame though, since property remains the most over inflated asset known to man...just look at the rebuild costs of a normal house compared to the sale price!
                            Free Guides For First Time Buyers!

                            www.FirstTimeBuyerGuru.com

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                            • #15
                              Re: The next property surge?

                              Originally posted by Dan S View Post
                              If buyers are intending to stay in a newly bought property for several years at least, then paying rent for several years to hold out until the market corrects itself may be a false economy.

                              Of course, at the end of the day, it's all difficult to predict. You're certainly correct that something's got to give! Especially for first time buyers.
                              I totally agree about renting being false economy in some, if not the majority of cases. Renting is dead money if it's not a short term thing.

                              Why has something got to give? What laws of economice dictate that the UK has to follow the US etc?

                              It's true UK property is over valued. Our UK homes replacement cost is about half what we paid for it in december 2009 (That does not take into account the value of the land it is built on though).

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