Well I have to point out that the statement about property rising and crashing is simply not true..prices going down at all was simply unheard of at all until the cycle reversal in the approx early 90's (depending on your region). They may , or may not do that again. If they do reverse again they may or may not replicate the last fall. No one knows for sure , because as usual all of the factors that contributed to the historic reversal mentioned are not entirely replicated this time so we are left best guessing.
The statement re why people buy or sell properties is also not accurate..people do not just engage in the market for those reasons. People's activity of so-called 'timing' the market is relatively new and I am still not convinced it is something the majority of people do. Historically ,most people just bought or sold a house for the usual boring reasons..moving areas, bigger family , wanted a bigger/smaller garden etc..and I suspect this is still applicable to most people. Perhaps the problem is that when you are a trader you tend to view these sorts of matters as a 'trader' forgetting that most people don't view things in this way.
The statement re estate agents (who I don't necessarily love) is also strongly biased...basically the agent (estate or otherwise) has a job to do on the client's behalf to get the best price he/she can for that client..yes we know this often is also to the advantage of the agent ,but that does not negate the brief mentioned. To achieve the brief they use any and all tactics ,but what is achieved is dependant on the would be buyer being willing and able to complete the equation.
JT , people always seeem to quote average national income, but this is not the critical factor. It is NET disposable income that determines whether Joe Smith is able to complete the equation. This is determined by interest rates , but by other factors as well. Level of overall taxation , general rate of inflation on household income reducing or increasing purchasing power...and of course all of this in relation to the cost of property..I might have also mentioned the confidence factor which is what determines whether Joe Smith is willing to complete the equation.
JT, this is why your statement re people "who buy at the peak of the market are always the one's who get in trouble" is not strictly correct. For a start knowing where a 'peak' is is nigh impossible anyway without hindsight. Second, it is not where you buy that determines whether you will be in trouble. With property if you are a 'normal' residential buyer it is whether you have allowed enough 'buffer' in your calculations when you worked out how much you could afford to buy the property. If you got that wrong you will be in trouble. For investors there are other issues such as alternative investment considerations etc..
I thought there were earlier posts re this 50% price drop ,but they appear to have disappeared. Anyway , if the reference to a 50% price crash is actually saying prices will drop by an average of 50% do you know what this will actually mean when we know that some will not drop by this average figure? If it were to occur it may mean that some properties would have to go down by as much as 60-70%.....sorry , but if someone is trying to tell me a bog standard 3 bed semi in the Nwest currently valued at £160k is going to be worth £80k sometime soon I can't see it. If of course it did happen we are going to see 'blood in the street' and a huge number of opportunites for anyone holding cash in which case I can only pray that I am wrong.
Cheers
