Mark Barton
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also now there is a house price index chart.study the chart on a monthly basis
Will the housing market decline push the Stock Market Up?
chump
trading anything long term - property or stock markets - always works - until it does not work - and when it does not work - you are screwed and give back all you have made - plus a bit
so if you look back at prior stalls - they were either warnings or just things to convince you that a long term approach is right
but most leveraged property guys got screwed on the last move down - since the banks pulled loans to anyone they thought had some cash hidden away in the hope of shoring up the banks balance sheets
so the only property people who were not screwed - had either sold up or the bank thought they had no money or they didnt have loans or their partner worked for the bank or building society!
property is a real illiquid asset - 3 months minimum to get out - and it aint no fun watching a falling market like that
so the question is - was the last fall a warning for whats to come?
if you want a different view - ask someone in germany what they think of property as an investment - properties been tanking there for ages and repossesions are massive - cant happen here? - it can and will and a long term depression in property - not a quick warning shot this time!
trading anything long term - property or stock markets - always works - until it does not work - and when it does not work - you are screwed and give back all you have made - plus a bit
so if you look back at prior stalls - they were either warnings or just things to convince you that a long term approach is right
but most leveraged property guys got screwed on the last move down - since the banks pulled loans to anyone they thought had some cash hidden away in the hope of shoring up the banks balance sheets
so the only property people who were not screwed - had either sold up or the bank thought they had no money or they didnt have loans or their partner worked for the bank or building society!
property is a real illiquid asset - 3 months minimum to get out - and it aint no fun watching a falling market like that
so the question is - was the last fall a warning for whats to come?
if you want a different view - ask someone in germany what they think of property as an investment - properties been tanking there for ages and repossesions are massive - cant happen here? - it can and will and a long term depression in property - not a quick warning shot this time!
Steve,
No particular argument with your statements,but the problem we have here is in defining terms "long term depression" whats that 3 years, 5years ,8years, 10 years, at what level will price still be considered to be depressed current , - 20% ,-30% , -50% ? Not being argumentative. Just making the point that terms not quantified are easy to misunderstand.
IMO I don't see real probability of upside on capital values and I don't know how long that will take to change. No time soon though would be my best guestimate.However, whether there is much price depression , or whether a process of price sidesteppng in tandem with inflation will achieve the same outcome..really ,who knows, I certainly don't.
Gard, I speak as someone who has a fair number of properties and I can tell you IMO neither I nor anyone else I know in property called the top on this market..all that has happened is like a trader we , or some of us, have cashed in some part of our investment because we were happy with that return , or more likely we were sufficiently old we wanted to take the money and find 6 foot of sand and sun with our name on it..yes I know this all sounds mundane , no insightful picking of market turns ,but seriously I think if you could interview a few they would just say something like "don't see much probability of up money to come so I will bank what I need for the forseeable and sit out the rest"..I can say that I know a number of other property investors who have been sending me cards from Spain and Greece..in other words they've already done the business..the guys who might get hurt are the late comers who have listened to the spiel about being leaveraged and there might be quite a few of them judging the buy to let mortgages that have been done in the last couple of years but even that thought is not necessarily a given certainty..
I've talked to a few of the above , a sparky who did some work for me , a decorator, a colleague of my wife's ,and the common flaw they all showed was they biased towards optimistic numbers.. I call it the rose tinted glasses look..ignore all the nasty maybe's and concentrate on the fact we are going to be rich...LOL anyway I am now off topic so to answer your question I doubt property moving will have any effect of note on stocks..the cash is already out there (probably in commodities or heading East or maybe lying on a beach).
I should also say it is very misleading to talk in terms of market generalities ..no matter what happens some locations and some types of property will do much better than others and in that respect they are no different to stocks.
Cheers from a mere mortal
No particular argument with your statements,but the problem we have here is in defining terms "long term depression" whats that 3 years, 5years ,8years, 10 years, at what level will price still be considered to be depressed current , - 20% ,-30% , -50% ? Not being argumentative. Just making the point that terms not quantified are easy to misunderstand.
IMO I don't see real probability of upside on capital values and I don't know how long that will take to change. No time soon though would be my best guestimate.However, whether there is much price depression , or whether a process of price sidesteppng in tandem with inflation will achieve the same outcome..really ,who knows, I certainly don't.
Gard, I speak as someone who has a fair number of properties and I can tell you IMO neither I nor anyone else I know in property called the top on this market..all that has happened is like a trader we , or some of us, have cashed in some part of our investment because we were happy with that return , or more likely we were sufficiently old we wanted to take the money and find 6 foot of sand and sun with our name on it..yes I know this all sounds mundane , no insightful picking of market turns ,but seriously I think if you could interview a few they would just say something like "don't see much probability of up money to come so I will bank what I need for the forseeable and sit out the rest"..I can say that I know a number of other property investors who have been sending me cards from Spain and Greece..in other words they've already done the business..the guys who might get hurt are the late comers who have listened to the spiel about being leaveraged and there might be quite a few of them judging the buy to let mortgages that have been done in the last couple of years but even that thought is not necessarily a given certainty..
I've talked to a few of the above , a sparky who did some work for me , a decorator, a colleague of my wife's ,and the common flaw they all showed was they biased towards optimistic numbers.. I call it the rose tinted glasses look..ignore all the nasty maybe's and concentrate on the fact we are going to be rich...LOL anyway I am now off topic so to answer your question I doubt property moving will have any effect of note on stocks..the cash is already out there (probably in commodities or heading East or maybe lying on a beach).
I should also say it is very misleading to talk in terms of market generalities ..no matter what happens some locations and some types of property will do much better than others and in that respect they are no different to stocks.
Cheers from a mere mortal
TheBramble
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It's a major assumption to make that everyone with property portfolios of the size you indicate are 'ahead of the game'. As posted above, some were/are clearly not.Gardan said:
But it is precisely lean times in a declining housing market that push rental rates UP. A good time to own if you're lightly to no leveraged and if you're in for the long haul.
Having said that, there are so few (relatively) people in a position of that size. A few thousand individuals and the rest are property companies who will typically diversify their cash through intermediary companies, brokers etc.
My point is, even this segment of the property population will have little combined overall impact on the financial markets by supplying/withdrawing their speculative/investment funds.
Just one last thought also for you Gard..do a search on changes in tax law as Pensions are about to be able to invest in residential property. This has not been possible before ,but will shortly become law..again what impact that as on the market who knows at this time, but it does not seem to have been discussed much so perhaps not a lot of people are aware of this impending change? It does seem to me though to be a move by govt to encourage people to invest long term in property and thus not be as exposed to the stock market as they have historically been.
Cheers
Cheers
Chump, Re tax laws for investing in property under pension umbrellas.if I am not mistaken,that the changes are pencilled in for 2006/7. Some people suggest that given what has happened with the housing market recently that it may only be introduced gradually stating with "action areas" . The advice I have been given on tax changes is "Commercial Property" may be first to get the greater benefits/tax free income from rents ect.Self administered pensions allowance of 200k per anum to put into a fund for commercial properties ect @ 2006 is one figure I was given. Listening to all your comments which has been much appreciated. I think the general consensus to my original question is a flat "NO" There goes another great theory then! Thanks to everyone again. Gary
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