[quote TheGuruishere]@thequantofmontecarlo
Just stop, you are embarrassing yourself now, with your obviously, vested interest in a house price fall.
As others have pointed out, buying a home isn't just a investment, you should really be aiming your advice at investors. Even then, most would probably not take it, due to the history and nature of the housing market.
You are attempting to predict the bottom, many people try in various other markets, only to overlook some future change. Then, it's all to late, they've lost their money.
The advice your giving here, which you hold with out right conviction, is dangerous.
You seem to think, that people are acting illogical by buying now, when they could sell and then rent... People who are selling, have done their maths and are changing their finances and property to suite. Hence the stamp duty removal, as a gift from Sunak, to make this process easier.
Renting, is not a good idea, when it's often 50% higher than mortgages. Then you get evicted and the process which follows.
10 years of renting, is real lost money, wether a house fluctuates in price, around 10-30%, over that time, eventually the repayments will come to an end. The renter, will continue to pay forever... lets not forget, houses have always increased in value, due to the increase in money supply and as you've seen lately, theres alot more money being pumped into the system.
You also have no control over new measures Sunak and BOE might introduce, if rates go negative, to -3% where realistically, they may go.
I'll warn you also, becareful because following 2008, many held out expecting the market to correct, it never did.... HTB was introduced and ever cheaper credit.
Now, if interest rates go negative, those who have bought now, will be able to sell the house for much more. Those who hold out will have to pay much more, which could result in them no longer being able to afford the property, they can now.
It's also possible, that we see other measures to relieve pressure on mortgage holders and further support for FTBs...
You seem desperate to convince others of your advice, calling others fools... Mystic Meg, oh please tell me the future of Tesla and when to place my sell order for the correction, so I can become rich.
It's all speculation, an you don't know what will happen and what the powers to be will do.[/quote]
@TheGuruishere
Still not taking in the wider economic picture. You are still referencing whats happened in the last decade. Recession in the 1990's and the GFC in 2008 both resulted in a drop in house prices. Both resulted with people in negative equity and this economic situation will be far greater.
It's the banks that control house prices in their willingness to lend not Sunak. If the BoE reduces interest rates to -3% do you really think the banks will follow and pay you to take out a mortgage? Banks are there to make profit by lending and other products and provide a return in dividends to investors.
That's the difference between 2008 to now. Interest rates were cut from 5% to 0.5% which enabled room for maneuver as well as QE printed money flowing into assets. There no way the government would be able to subsidise everyone's mortgages without currency being inflated to toilet paper.
It's not speculation, the economic impact of this will become very real, only those being paid by the government to drink wine and sun themselves in the garden recently don't realise that yet.
It is certainly not a time to over-leverage yourself if you are uncertain of your future job prospects and ability to repay debt.
After this initial period of deflation (economy restricting) the government will want austerity/tax rises and to deflate away the debt with inflation.
This isn't crystal ball gazing it's economic fact. Then the government has to actually RAISE interest rates to avoid the currency becoming worthless. Imagine servicing a mortgage with interest rates at even 5% let alone 10%+. Many in the 90's handed their keys back.
So if you are a cash buyer and aim to live in a forever house, then knock yourself out and buy now. Over a lifetime in a home it doesn't matter. If your aiming to take on eye watering debt, then you'll maybe want to re-assess unless you can fix now for 10+ years and overpay it off in that time.
This current economic shitstorm was coming regardless. COVID was only a catalyst which has fast forwarded the inevitable. The US treasury yield curves inverted last year which predates EVERY recession.
P.S Place sell order of Tesla now. Bigger market cap than Toyota yet hardly produces any cars, that isn't sustainable. Big drop in that and the ridiculous price ratio of the FAANGs to come once the economic impact is realised.
I'm in Gold/Silver and precious metal miners and doing very well and plenty more to come.