Property crash, just maybe it really is different this time

[Axeman123]

36 minutes ago, HousePriceMania said:

Not if estate agents start going out of business, which will happen if there is nothing to sell.

That is an interesting point. Assuming RM stays the main online listing site, do they care about small one branch estate agents? There is only so much money to be made by estate agents as a group, and RM will get their cut regardless of how consolidated they become. 

[sancho panza]

49 minutes ago, Axeman123 said:

That is an interesting point. Assuming RM stays the main online listing site, do they care about small one branch estate agents? There is only so much money to be made by estate agents as a group, and RM will get their cut regardless of how consolidated they become. 

No they won't .RM charge per branch and for the likes of Purplebucks,they get an equivalence charge I beleive.

Consolidation in the sector will hammer RM's charging model.

[sancho panza]

On 27/11/2021 at 08:45, With a crooked smile said:

That's the attitude that I really disliked on ToS. 

Ultimately a lot of people took risks that they were happy to make. For many of them it's worked out well and if someone bought in the south during the early 2000s on a repayment basis a crash would have little affect on them financially. 

Blaming that person for getting on with it isn't the right attitude. Having a go at people who architected the finacial system ie politicians is fair game tho. 

There's people like The Count aka House price mania or whatever other name he's using that will never buy even if there is a crash because they still won't be able to afford it or they  lack balls to commit. 

An excellent point Wacs,they haev.We did badly psot 08 because I struggled to accept that the CB's were prioritzing asset holders over ordinary citizens.You have to play the hand that's in front of you and even though some people have fallen into a spot of luck in terms of monetary policy and HTB etc,they've played their hand well.

Doesn't stop me feeling sorry for our young people who won't have the benefit of cheap homes or a free education.They've been dealth a mixed suit 2,4,7,10,K....screwed before the first round of betting.

On 27/11/2021 at 10:59, Frank Hovis said:

 

Or they like the benefits that come from renting: no maintenance responsibility, no need to try to source tradesmen if something goes wrong, and if next door turns out to be the neighbours from hell or you obtain another job elsewhere then you can simply move at minimal cost.  

My investments have gone up by more than house prices so it would also have worked for me financially.

The only time that renting has looked like being the wrong idea has been since Lockdown where rentals in Cornwall have become scarce and shot up in price.

As it happens I did buy a house but wouldn't be bothered about not owning.

We rent,have done for years(have some property in the family though,so declaring that),but for us as Mr and Mrs P,we rent.Next pad is on a 2.5% rental yield as we prepare to decide where to retire(will likely buy).The madness of the summer has dulled up here in the midlands but the downsides of renting have to be acknowledged in terms of insecure tenancies.

On 27/11/2021 at 11:20, With a crooked smile said:

Tbf if interest rates were 6% they would be bidding at what they could afford at that rate and someone would be criticising them saying I remember rates during ERM ect. 

 

The average man on the street doesn't have that attitude at all its all in your head. Most people don't know what QE is and almost no one in RL knows what ZIRP is. 

I think that's the thing.90% of people work out the monthly payments and bid the max on what they can pay.You have to trade that.People don't research it like msot people on here do.

[sancho panza]

On 27/11/2021 at 12:01, Frank Hovis said:

 

I entirely agree about leverage.  I wouldn't make a leveraged investment even in property as I regard it as too risky.  I bought my house outright.

I however have always been primarily invested in indices (as in tracker funds that aim to match the indices by having the same holdings) rather than trying to pick winners in individual shares.

Shares may fall to zero but indices don't unless you have a communist revolution; and that wouldn't happen here.  Would it?

 

We trade options,so not as leveraged as futures but you can wake up down 50% on the night before occasioanlly.I'd rather elveage on oils tocks than something as mundane as a BTL portfolio where  you're unable to manage your risk in terms of tenatns/non payment/repairs/interest rates/LTV requirements,but it is perosnal chosce

11 hours ago, spygirl said:

Go go go ....

One in 16 homes changed hands in 2021: The busiest year for the UK's property market since the financial crisis has seen average house price jump £15k

https://www.dailymail.co.uk/money/mortgageshome/article-10246797/One-16-homes-changed-hands-2021-says-Zoopla.html

Thats ~7% of stock changing hands.

However ..... even in the 90s crash, the number of sales were higher.

To get this highest! eva!!!! figure Rishi has bro0ught forward 2-3 years of sales.

And a lot of these sales will be crap new builds for HTB.

 

 

B einteresting to see those stats adjsuted for population.

LE2 looks like average 150 trasnactionsper month pre northern crock and about 80 since.

Sturcturally there's no liquidity,which would make me wary of trading options on it(if possible) aside from some high volatility bets once in a while.

 

[spygirl]

7 hours ago, sancho panza said:

We trade options,so not as leveraged as futures but you can wake up down 50% on the night before occasioanlly.I'd rather elveage on oils tocks than something as mundane as a BTL portfolio where  you're unable to manage your risk in terms of tenatns/non payment/repairs/interest rates/LTV requirements,but it is perosnal chosce

B einteresting to see those stats adjsuted for population.

LE2 looks like average 150 trasnactionsper month pre northern crock and about 80 since.

Sturcturally there's no liquidity,which would make me wary of trading options on it(if possible) aside from some high volatility bets once in a while.

 

That's the issue.

Even life goes wrong and you to sell, quickly, how in fuck fo you do it in this market?

You are in the terrority of We buy your house!

Sales are more n more rare in my region.

I'd say HTB estate tgat have been built, both the crappy build and crappy location and crappy social element  are unsellable

[HousePriceMania]

10 hours ago, Axeman123 said:

That is an interesting point. Assuming RM stays the main online listing site, do they care about small one branch estate agents? There is only so much money to be made by estate agents as a group, and RM will get their cut regardless of how consolidated they become. 

£1000 per office per month I read.  If estate agents shut half their offices there revenue plummets.

If there are no houses to buy/sell those offices are going to be shut.

Also, RM put their prices up, much to the annoyance of estate agents, maybe the fall in listings is in part due to them moving to other sites.

RMs year end figures will be interesting.

[Boon]

Must be more complex than that. Purplebricks for instance, how many offices do they have? There probably are other hybrid models by now.

I would think some of the out of town agents have fairly low running costs in a downturn. If nothing sells or rents their staff will be minimum wage, but an EA can still earn from rent commissions every month even though the deal was signed ages ago. £1,000 Rightmove charge isn't going to be material.

[spygirl]

39 minutes ago, Boon said:

Must be more complex than that. Purplebricks for instance, how many offices do they have? There probably are other hybrid models by now.

I would think some of the out of town agents have fairly low running costs in a downturn. If nothing sells or rents their staff will be minimum wage, but an EA can still earn from rent commissions every month even though the deal was signed ages ago. £1,000 Rightmove charge isn't going to be material.

I think tis seat/account.

 

EAs cannot live with RM.

EAs cannot live without RM.

 

[Axeman123]

1 hour ago, HousePriceMania said:

£1000 per office per month I read.  If estate agents shut half their offices there revenue plummets.

If there are no houses to buy/sell those offices are going to be shut.

Wikipedia describes Rightmove as a "joint venture between four of the UK's largest property agents: Halifax, Countrywide plc, Royal & Sun Alliance, & Connells", but then notes HBOS sold it's share which I think means scratch Halifax. So If every estate agent bar them folds, do they care about losing the £1k a month if they get a near monopoly instead?

The estate agents have already tried to kick their RM addiction by starting "on the market" which was an absolute flop. Many agents got arsey about RM putting their prices up, but still pay it for lack of an alternative. RM really does seem to have all the cards, why not consolidate the entire industry?

[Frank Hovis]

48 minutes ago, spygirl said:

I think tis seat/account.

 

EAs cannot live with RM.

EAs cannot live without RM.

 

 

The main rivals to RM, bar Purple Bricks which has already been mentioned, are the exclusively local companies who focus on just one town and charge a fraction, maybe 20%, of bigger EAs.

I can offhand think of two in Cornwall whose boards dominate a particular town in which they have there own office.

I was trying to track rentals through RM during the summer but the majority of rentals in those two towns go through these two companies and never appear on RM.

On a national basis they are entirely unknown but they have their local markets sewn up.

[spygirl]

4 minutes ago, Frank Hovis said:

 

The main rivals to RM, bar Purple Bricks which has already been mentioned, are the exclusively local companies who focus on just one town and charge a fraction, maybe 20%, of bigger EAs.

I can offhand think of two in Cornwall whose boards dominate a particular town in which they have there own office.

I was trying to track rentals through RM during the summer but the majority of rentals in those two towns go through these two companies and never appear on RM.

On a national basis they are entirely unknown but they have their local markets sewn up.

That would require an EA to be cheap and good.

Most are not ...

 

[HousePriceMania]

Who knew....

 

https://www.abc.net.au/news/2021-11-28/house-prices-depend-on-interest-rates/100652592

 

House prices depend on interest rates: as one goes up, the other will fall

[Hancock]

23 minutes ago, HousePriceMania said:

Who knew....

 

https://www.abc.net.au/news/2021-11-28/house-prices-depend-on-interest-rates/100652592

 

House prices depend on interest rates: as one goes up, the other will fall

Yes all the complexity and genius people have used to explain why house prices are about to crash over the last 20 years was predominantly bollocks ... it all comes down to that simple equation.

[HousePriceMania]

1 hour ago, Hancock said:

Yes all the complexity and genius people have used to explain why house prices are about to crash over the last 20 years was predominantly bollocks ... it all comes down to that simple equation.

Ever get the feeling the whole country has been conned ?

[Hancock]

3 hours ago, HousePriceMania said:

Ever get the feeling the whole country has been conned ?

Yes, but not as badly as people who bought a new build in recent years!

[With a crooked smile]

On 29/11/2021 at 21:47, HousePriceMania said:

Not if estate agents start going out of business, which will happen if there is nothing to sell.

Most learnt their lessons years ago and have a letting side. Basically it's fairly recession proof for the owner. The staff on the sales side might get dropped or transferred to jobs on the rental side. 

[HousePriceMania]

On 29/11/2021 at 22:35, Axeman123 said:

That is an interesting point. Assuming RM stays the main online listing site, do they care about small one branch estate agents? There is only so much money to be made by estate agents as a group, and RM will get their cut regardless of how consolidated they become. 

What's going on here I wonder

 

https://uk.finance.yahoo.com/news/rightmove-plc-transaction-own-shares-170300828.html

 

RIGHTMOVE PLC - Transaction in Own Shares

[Boon]

Rightmove are basically a cash machine and have net cash. 

With low capex costs and no ambitions to expand to other countries if they don't do things with it then shareholders get restless

Buying back and dividends are ways to get rid of it. Handy for directors if your bonus is based on EPS, because less shares increases EPS without anything happening.

 

[HousePriceMania]

UK property Lion index update today, looks like the market has turn and the north is falling...meanwhile Lloyds anounce they're expanding their BTL empire and the BoE is going to lend more and more to anyone who'll take it.  Im not sure if it's insanity or out right systematic fraud now.  Either way the British people have a real problem and all the idiots celebrating house price rises are going to be shocked when they can't afford to heat their houses or eat due to inflation, I wonder if they'll feel rich then.

 

 

 

 

 

 

 

 

 

Edited December 6, 2021 by HousePriceMania

[HousePriceMania]

 

 

 

 

[HousePriceMania]

 

 

 

 

 

[spygirl]

Asking prices are meaningless at the best of times.

Pointless at the mo.

[HousePriceMania]

43 minutes ago, spygirl said:

Asking prices are meaningless at the best of times.

Pointless at the mo.

Thanks

 

[BWW]

On 27/11/2021 at 11:29, Frank Hovis said:

 

Most people have all or most of their investments in cash deposits and this is why houses appear to have rocketed when a big chunk of their apparent rise is really the devaluation of their cash.

RPI since 1987 has been 300%.

In terms of simple inflation if you have £300k in cash in 1987 allocated to buying a house but you don't do so and instead sit awaiting a "crash" then in 2021 simple inflation will have made that house cost £900k.  And then add in the effects of immigration on housing demand and people's property obsession and it's probably more like £1.5m.

This is the mistake that people who are awaiting a crash have made: they have sat in cash which is always likely to be a losing strategy.

 

 

Had however they had their money in the stock markets:

https://www.chartingyourfinancialfuture.com/investing/buy-stocks-not-houses-to-get-rich/

 

You would come to a different conclusion if you started those plots 10 years later. You would see S+P peaking a couple of times above HPI dropping below each time and now escaping far above and seemingly heading for the moon.

It is of course also HPI in the land of no recourse mortgages and thus not the same as UK [or Oz?  - do they have no recourse mortgages?].

[Frank Hovis]

50 minutes ago, BWW said:

You would come to a different conclusion if you started those plots 10 years later. You would see S+P peaking a couple of times above HPI dropping below each time and now escaping far above and seemingly heading for the moon.

It is of course also HPI in the land of no recourse mortgages and thus not the same as UK [or Oz?  - do they have no recourse mortgages?].

 

Yes.

I have done many presentations and when creating charts the key factor in making the chart say what you want it to say is where you start the clock.

I am heavily weighted to S&P and am grateful for the last couple of weeks' falls as I want to put some more in owing to the lack of any credible alternatives IMO.  Property is unaffordable to new entrants and crypto is a poker game for gamblers trying to outguess other gamblers.