In light of the inflation and interest rate rises expected in the UK and US...
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Is that like a view of a 10 year old? ;P
Chris Meech I am Canadian. [heard in a local bar] In theory there is no difference between theory and practice. In practice there is. [Yogi Berra] posting about Crystal Reports here is like discussing gay marriage on a catholic church’s website.[Nishant Sivakumar]
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Perhaps it is wise to fix your mortgage rate, even if it is 4% or 5% and probably best not to pay off your mortgage since in 10 years the house, and the money you paid into it will be worthless. Of course it raises the question of where to invest the cash you could have paid into your pile of bricks, any suggestions? Gold? Normally inflation proof. Anything else anyone can think of?
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Balloons. Then inflation is a good thing.
Ideological Purity is no substitute for being able to stick your thumb down a pipe to stop the water
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Perhaps it is wise to fix your mortgage rate, even if it is 4% or 5% and probably best not to pay off your mortgage since in 10 years the house, and the money you paid into it will be worthless. Of course it raises the question of where to invest the cash you could have paid into your pile of bricks, any suggestions? Gold? Normally inflation proof. Anything else anyone can think of?
============================== Nothing to say.
gold is a bubble also, especially the gold futures.... unless you have the right of bullion delivery it is worthless... i have heard that gold futures contract are oversold (IE 10 gold bars have been sold 10000 times) if i where you i would invest in chinese currency since they peg the value of it. making it relatively unchanged in volitile western markets flutter around. FYI: the whole fractional reserve banking system combined with central banking is a ponzi scheme that farms debt slaves... before 1934 sovreign countries printed their own money(responsibly not like zimbabwae) instead of borrowing it from the synagoge of satan(REV 2:9).
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Bergholt Stuttley Johnson wrote:
but the property will in all likelyhood increased in line with inflation
Not given: 1) Higher interest rates to counter the inflation. 2) Higher borrowing costs as the 'easy credit' model of ecconomy the west has depended on for the last 20 years is no longer current. 3) Reduction in young house buyers feeding the chain due to babyboomers having moved up the age ladder thus reducing demand. The house bubble has not even started its deflation yet. It has a long way to go.
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Erudite_Eric wrote:
Not given:
- Higher interest rates to counter the inflation.
even when interest rates were at 15%+ this didnt happen so why would it in future?
- Higher borrowing costs as the 'easy credit' model of ecconomy the west has depended on for the last 20 years is no longer current.
so borrowing will be more difficult but as supply is still not matching demand there is an underlying trend upwards forcing prices higher
- Reduction in young house buyers feeding the chain due to babyboomers having moved up the age ladder thus reducing demand.
no actually, the demand from first time buyers is actually growing, this is due in some measure to divorces spliting up households so taking up 2 houses for what used to be 1, this drives up demand (and prices as these older buyers have on average more money) yet are looking for exactly the same housing stock as first time buyers so whilst the credit crash has dented house prices the trend is still upwards, the only thing that will change this is a drop in demand and ALL forecasts indicate that this is not going to happen, or the massive increase in housing stock, which is unlikely as 1, lack of room for them, 2, builders not wanting to build cheap housing as the profit on them is very small (and would dissapear completely if you were remotely correct)
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
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Erudite_Eric wrote:
Not given:
- Higher interest rates to counter the inflation.
even when interest rates were at 15%+ this didnt happen so why would it in future?
- Higher borrowing costs as the 'easy credit' model of ecconomy the west has depended on for the last 20 years is no longer current.
so borrowing will be more difficult but as supply is still not matching demand there is an underlying trend upwards forcing prices higher
- Reduction in young house buyers feeding the chain due to babyboomers having moved up the age ladder thus reducing demand.
no actually, the demand from first time buyers is actually growing, this is due in some measure to divorces spliting up households so taking up 2 houses for what used to be 1, this drives up demand (and prices as these older buyers have on average more money) yet are looking for exactly the same housing stock as first time buyers so whilst the credit crash has dented house prices the trend is still upwards, the only thing that will change this is a drop in demand and ALL forecasts indicate that this is not going to happen, or the massive increase in housing stock, which is unlikely as 1, lack of room for them, 2, builders not wanting to build cheap housing as the profit on them is very small (and would dissapear completely if you were remotely correct)
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
Bergholt Stuttley Johnson wrote:
even when interest rates were at 15%+ this didnt happen
I guess you werent in the UK in the early 90's... Anyway. What I said was the relative value of housing will come down. As a play, housing is done for te time being. (10 to 15 years) Nothing you have said disagrees with this statement.
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Bergholt Stuttley Johnson wrote:
even when interest rates were at 15%+ this didnt happen
I guess you werent in the UK in the early 90's... Anyway. What I said was the relative value of housing will come down. As a play, housing is done for te time being. (10 to 15 years) Nothing you have said disagrees with this statement.
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er yes I was and I was working for a building society at the time so forgive me if I dont think you are correct were you? I remember house price boom despite the high rates - true it later crashes but every single house bought during that time is now worth more. I have doubts that it will, it never has over a period of a mortgage, in every case I know over the period of a 25 year mortgage the house is allways worth more at the end that it was at the begining and by a factor greater than inflation. house prices here have not only stopped falling but are now showing signs of increasing so even in an economy like this houses are nearly matching inflation yet somehow you reckon they wont in future? history shows this doesnt happen, yet you claim it it will but have shown nothing to support it
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
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er yes I was and I was working for a building society at the time so forgive me if I dont think you are correct were you? I remember house price boom despite the high rates - true it later crashes but every single house bought during that time is now worth more. I have doubts that it will, it never has over a period of a mortgage, in every case I know over the period of a 25 year mortgage the house is allways worth more at the end that it was at the begining and by a factor greater than inflation. house prices here have not only stopped falling but are now showing signs of increasing so even in an economy like this houses are nearly matching inflation yet somehow you reckon they wont in future? history shows this doesnt happen, yet you claim it it will but have shown nothing to support it
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
Bergholt Stuttley Johnson wrote:
er yes I was and I was working for a building society at the time so forgive me if I dont think you are correct
were you?Yes, you can clearly see the effect of high interest rates in the early 90s: http://www.mortgageguideuk.co.uk/housing/uk-house-price-index.html[^] Of course when sterling fell out of the ERM rates were lowered. Remeber Soros was responsible for this by beting heavilly against sterling?
Bergholt Stuttley Johnson wrote:
I have doubts that it will
Years ago we would have said self certified mortgages were impossible too... What do you think the effect of flooding the west with money is going to be? What will be te risk appetite of banks given the recent history? What effect will splitting the banks up so investement banking is seperate to high street banking? With inflation and tight lending the true value of houses will fall. Look, you say they have started gong up in the UK. Well, from MY point of view they have collapsed, because I work in euros. OUr house there used to be worth 210 k euros. Now it is worth 120K. Thats a 40% or so drop in price. See the effect of QE? It already impacted house prices. What you dont realise yet is just how worthless sterling is and how much inflation you have got coming.
============================== Nothing to say.
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Bergholt Stuttley Johnson wrote:
er yes I was and I was working for a building society at the time so forgive me if I dont think you are correct
were you?Yes, you can clearly see the effect of high interest rates in the early 90s: http://www.mortgageguideuk.co.uk/housing/uk-house-price-index.html[^] Of course when sterling fell out of the ERM rates were lowered. Remeber Soros was responsible for this by beting heavilly against sterling?
Bergholt Stuttley Johnson wrote:
I have doubts that it will
Years ago we would have said self certified mortgages were impossible too... What do you think the effect of flooding the west with money is going to be? What will be te risk appetite of banks given the recent history? What effect will splitting the banks up so investement banking is seperate to high street banking? With inflation and tight lending the true value of houses will fall. Look, you say they have started gong up in the UK. Well, from MY point of view they have collapsed, because I work in euros. OUr house there used to be worth 210 k euros. Now it is worth 120K. Thats a 40% or so drop in price. See the effect of QE? It already impacted house prices. What you dont realise yet is just how worthless sterling is and how much inflation you have got coming.
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well sounds like you r financial skills arnt as good as you think, we bought our house for £85k and its worth £200k now. and thats within your 10 year timescale. maybe you should stop using the Euro and then you will not be affected by its colapse
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
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well sounds like you r financial skills arnt as good as you think, we bought our house for £85k and its worth £200k now. and thats within your 10 year timescale. maybe you should stop using the Euro and then you will not be affected by its colapse
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
You said 15% interest rates dont afect house prices. I show you a graph that shows they did in the early 90's (rates hit 15% as the UK tried to stay in the ERM). You respond by saying that during a different period of very low rates your house went up 120%. No doubt if we continued this discussion you would come up with increasingly odd and irrelevant statements. :) Suffice it to say, house proces in the UK will come down in real value. Look, inflation is what, 5%? If house prices arent doing 5% then their value is decreasing. Forget the figure value, I am talking about their real value.
============================== Nothing to say.
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er yes I was and I was working for a building society at the time so forgive me if I dont think you are correct were you? I remember house price boom despite the high rates - true it later crashes but every single house bought during that time is now worth more. I have doubts that it will, it never has over a period of a mortgage, in every case I know over the period of a 25 year mortgage the house is allways worth more at the end that it was at the begining and by a factor greater than inflation. house prices here have not only stopped falling but are now showing signs of increasing so even in an economy like this houses are nearly matching inflation yet somehow you reckon they wont in future? history shows this doesnt happen, yet you claim it it will but have shown nothing to support it
You cant outrun the world, but there is no harm in getting a head start Real stupidity beats artificial intelligence every time.
Bergholt Stuttley Johnson wrote:
I have doubts that it will, it never has over a period of a mortgage, in every case I know over the period of a 25 year mortgage the house is allways worth more at the end that it was at the begining and by a factor greater than inflation.
There is the counter example of Detroit. The loss of industry in that city killed the real estate market. There are still people selling houses there for $1 just to get out of the property tax burden. That is far from a typical result but at least serves as a reminder not to put all your real estate eggs in one basket.
Kill some time, play my game Hop Cheops[^]
