Flightman, I often get the impression you are a bit bitter about the way the whole housing market has gone over the last 15 years. Why is this?

Also it seems to me rather than taking advantage of actual current situations you are waiting for your doomsday scenario to play out. This scenario may never happen or may take another 5 years. So either you'll go to your deathbed screaming to your children that it will all crash or you'll have wasted close on 20 years of your life waiting to be proved right.

But in that 20 years many people have sorted themselves out very nicely.

I'm not having a dig by the way, you're a nice chap and have been very helpful to me. It's just on this matter I think you've got slightly tunnel vision.

 

PMSL!

 

No offence taken.
Any bitterness you perceive, and I'd actually call it frustration or annoyance rather than bitterness, stems from the destruction of our economy on the alter of ever rising house prices,and the cheap credit required to fund the purchase of those properties. My personal circumstances mean I don't need need to move house, so I'm not wasting anything thanks, let alone 20 years.

 

Forgot about this article from a while ago - http://www.dailyreckoning.com.au/con...ry/2008/08/04/

 

Why get frustrated about it or annoyed .It is what it is ,so if you are comfortable yourself ,eg not destitute or looking in bins for your next meal then dont worry about it .!!

You wont change the world so get on with living .

 

Agreed. If you are waiting for prices to crash, you'll be waiting forever. History shows this.
Long term, property is the best place to invest your cash.

 

Is it?

If I bought a house in 200AD how much would it be worth today?

 

I'd like to see some figures backing this statement up.

If you look at house prices in relation to earnings, you will see that they are reasonably interlinked, i.e. house prices can not get too far out of kilter relative to earnings (this makes sense, if you think about it, because if house prices got more and more expensive in relation to earnings, then eventually nobody would be able to afford a house, even the queen).

The reason house prices (and everything else) has gone up in "numbers" is of course wage growth. Some of the wage growth is down to genuine "growth" in the economy etc, but I think most of it is down to inflation and wages keeping up with inflation only.

Stocks and shares are also inflation linked to an extent, and I think that if you did some research (I haven't), you might find that shares have kept up or beaten house prices. Gold might also be a good candidate at the moment.

 

If you're an owner-occupier and buying in a part of the country (or world) where supply consistently fails to keep up with demand, that's undoubtedly the case.

 

Stocks and shares are also inflation linked to an extent, and I think that if you did some research (I haven't), you might find that shares have kept up or beaten house prices. Gold might also be a good candidate at the moment.[/QUOTE]

But the thing that gives Property the edge ,is that you can enjoy it/use it, as an investment ,eg live in it .Now what is that worth ??

All you do with shares/gold is see the value on paper .Not a lot of fun really .IMO .

 

If you think a house (which you have to maintain while living in) is as good an investment as dividend paying stocks over the long term, then good luck to you! LOL

 

Alan, I have read varying reports about what gives the best return over the long run ie stocks (with dividends reinvested) vs property. Some say one some say the other, to some extent it depends when you start measuring this from and how you measure it. Like all statistics it is fraught with difficulties, so to my mind there is no clear answer to the question.

 

Well, BTL is on the up again!!!!

http://www.bloomberg.com/news/2011-0...er-shares.html

 

I know what you're saying, and it obviously depends on area, but I still think stocks are far superior for savings in the long-term - i.e. for retirement etc.

If you look at this chart - http://www.housepricecrash.co.uk/gra...ouse-price.php Even buying at the low point and selling at the high, you would still have done much better in stocks growing (with reinvested dividends) at a conservative average of 5% a year. I'm sure the real average for that timescale is over 10%, which blows houses out of the water. Then you have to factor in the cost of any maintenance, which obviously with stocks is done by management and the overall growth figures include things like capex. But with a house you may have spent quite a bit that will somewhat increase your true investment.

 

how would a house purchase in 1972 costing 8k but now worth 1.8 million stack up against the stock market during the same period Glesga

 

Quite well. Just like a stock bought for pennies back then and sold for pounds today probably.

 

Congratulations if that's you or anyone you know btw (although I guess you will be too young for it to be you!). It would be interesting to know where and what kind of property/house that was.

 

Past performance is no guarantee of future performance.

You won't see those returns on property again because the market won't see the mass liberalisation/democratisation of credit again - it can only happen one.

 

don't forget if that was ones principle private residence that is 100% free of tax

shares would have to work pretty hard to match that surely

 

Yeah, they would. But like the house, in rare cases it can happen. All I was saying above was that, for the vast majority, stocks seem to be a better route to take, unless you're happy hoping to get lucky and using that chance to offset the more likely poorer growth of savings than that of stocks.

 

I would have to disagree and say that for the vast majority the risk of losing everything on stocks is not an option !!

Bricks and mortar are the safest bet .

 

Can't see how you would be in a position to predict what's going to happen over the next thirty years. How comes you are in a position to say so surely and accurately what will happen

Don't you still live with your mum??

 

The point about the housing market is that it is completely none uniform across the country.
Houses in areas where people aspire to and wish to live have not decreased in value during the past few years they have just increased at a slower rate.

 

The risk of losing everything on stocks, eh.

I wonder what the odds of even a noticeable chunk of, say, thirty prominent companies all going bust at the same time are, especially if they mostly do different things?

 

Thats Ok if you know what you are doing with Stocks/Shares ,but still risky to most people .

And I may be wrong ,but do the deficits in the pension schemes not corrulate to bad investments in stocks/shares,and endowments that are worth D1ck after 20 yrs of investment also come back to bad investment in stocks/shares ??

 

No my point is that the 80's credit revolution cannot be repeated.

But yes maybe aliens will come down and vaporize half the housing stock so yes I don't know.

 

Thanks. So unless there is an alien attack specifically on housing stock in the UK your predictions on property prices over the next 30 years or so will be spot on?

Forgive me if I totally ignore investment advice from a guy who still lives with his mum

 

If you bought in 1989 and had to sell in 1991, as an example, you would have a very different view. I can only assume that you were too young to be a houseowner then?

Prices have crashed in the past, will crash in the future. History shows us this!

Granted, over the long term - considering that a house is also a requirement of living - the cost of providing a roof over your head has been profitable, if buying rather than renting.

However, I do think that the housing market is currently on the edge of a cliff ...... it is well balanced - low interest rates are anchoring it to the cliff top. You remove low interest rates and remove any lingering confidence and we will see a crash. It's taking its time - I have been hoping for one for years now ...... just when I give up and buy another property it will happen!!

 

Home repossessions jump by 15%.

http://www.independent.co.uk/life-st...5-2282848.html

 

I bought in 1989 and sold (to my brother) for a loss, 3 years later, interestingly my brother held on and has made a fortune on the property