Has the Property Market learnt from the House Price Crash?
The property market is starting to recover from the recent housing crash witnessed and experienced around the world. However, it is a start of a recovery and certainly in our minds has not ‘recovered’ as some would like us to believe will happen very shortly or has actually happened and we just missed it.
The economic meltdown caused by the banking crisis will no doubt continue to affect the property market for some time (unless it was really caused by the introduction of HIPs) though the phoenix could rise out of the flames with some new and improved solid foundations. This possibility does potentially bring some questions to the forefront;
Are we still looking and hoping for rapid increases in property value with house prices that continue from where we left off in boom times?
Or, have we learnt from past mistakes and will ensure that these are not allowed to be repeated?
In many walks of life steady, consistent and reliable can be seen as slightly boring, dull and frankly not very exciting; BUT is this not exactly what the housing market needs for a period?
Are we really advocating a preference for our children to chase the Pete Doherty type?
Boom and bust will certainly not seem attractive to the many people who entered the market at a time where unsustainable house prices rises were at their peak.
Lloyd Blankfein CEO of Goldman Sachs, told an interviewer that Goldman Sachs ‘was doing God’s work’ which he seemed quite serious about, this must make even the least religious of people shake their heads with complete dismay.
If the ‘wild child’ partner is still appearing more attractive than the solid, reliable option; recent commentary within the Guardian may question this belief and looks at the economic advantages which could be gained by many Americans by ‘walking away from negative equity’ . This is also likely to apply to a number of people within the UK and surely is not the way a socially responsible society should allow banks and the property market to head once again.
Gradual rises in the property market which return realistic and ’sensible’ growth figures year on year are not to be feared and rejected as the way forward. It can seem many do not want to promote, publicise or work towards achieving this, even when we are so close to the recent turmoil in the property market. Instead, the headlines continue to read in a manner which promotes a boom or bust scenario.
‘House prices to increase 40% by 2013.’
‘Property prices to fall by 10% in 2010′
I am sure there will be many parents who have said within their passed on snippets of wisdom to their children;
“Son, make as many mistakes as you like…… just do not make the same mistake twice.”
Are we already at real risk of that happening within the property market? If so, what is the solution?
Related posts:
- House price forecasts for 2009 – how far can they fall?
- Nationwide – 2010 The End of House Price Rises?
- Agents report increased interest in property market
- Good News For the UK Property Market
- Nationwide – house prices rise again
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February 2nd, 2010 at 2:59 pm
Since when was a ‘recovery’ when prices get more expensive?
I don’t understand why petrol is view positively when prices go down and houses viewed negatively for the same.
I still can’t afford to upgrade my house, I’ve been living in a flat for 20 years and am now renting a house which costs a fortune to heat. Of course I might be able to upgrade if I took out a mortgage of 5.5x mine and my partners salary but I will only be able to repay that while interest rates are low and while both of use are working. There seems a high chance one or other of those things will not hold.
February 2nd, 2010 at 6:20 pm
As someone who doesn’t own a home, this “recovery” is bad news by my definition, and indeed that of most young people.
Not only that, we are overflowing with evidence to show that high house prices and too much borrowing to pay for them are detrimental to the economy.
This isn’t “recovery” any more than a heroin addict getting a fix to dampen his withdrawal symptoms is recovery. The underlying issue needs to be tackled.
February 2nd, 2010 at 6:43 pm
What, you think it’s all over? It hasn’t even started yet.
February 3rd, 2010 at 3:03 am
The property market crashed because the banks said “No more money”, NOT because the demand fell away due to people not wanting to buy. They simply couldn’t afford to buy, simple!
As the banks start to make money available again by offering decent mortgage rates with lower initial deposits, people start buying again and the market bounces back.
Everyone accepts that the house prices have started to rise again and first time buyers know that the first chance they get of borrowing the money, they will buy. They are certainly not concerned about further possible falls and while buyers are out buying and NOT considering possible falls, falls are unlikely to happen unless the banks halt loans again.
We deal with commercial factories etc. and lately the big housing developers have been buying up brown field sites and are starting to build houses again, so they are confident that the worst is behind us!
February 3rd, 2010 at 3:57 pm
The UK property market is essentially boom and bust and will always be with the utter greed that is spread accross the people involved. The includes joe bloggs to the professional investor developer.
Our house is our castle etc, rubbish, it is just the same as as spin on the roulette table. The difference is at least you know the odds on roulette. When will the UK realise houses are best rented and buying is for the foolish.
Come on guys lets get real !! some people are up to the eyes in debt for what is essentially 4 tiny little squalid walls. Choose life, rent !! not strife, buying.
February 4th, 2010 at 11:49 am
Prices must come down and people will have to see the really value of their property.