Moderator: Peak Moderation
I think you're about right, but surely the way things ought to be is that the time to buy is not when you think you might make an unearned income from property investment (in a zero-sum world, one person's unearned income is another's loss) but when you and yours are old enough, independent enough and numerous enough to get out of your parents' nest.woodburner wrote:and now is not the time to buy.
Rents follow prices and prices follow the money and the money [currently] comes from the magic money printer. The major reason for currently insane house price is the wall of lent into existence FRB credit that has chased the real estate sector for the last thirty or so years and the main reason they have not crashed in the last five years is because central banks have made "good" on all those broken FRB promises with their magic money printing.woodburner wrote:IMO house prices and rents are high because the government an banks keep printing money. This helps keepinflation going. People have always got as much money as they could lay their hands on when buying a house, with the expectation the prices will always go up. I think life is about to change, and now is not the time to buy. Rents seem to be driven by landlords who have bought to let. Then again, I could be wrong.
Billionaires looking for a reasonably safe place to put it. I remember a story not so long ago about things in Germany almost getting to the point of demurrage(sp? well, negative interest rates) because large investors were willing to pay for somewhere safe to invest their money.vtsnowedin wrote:Borrow money from whom?
The sub basement was dry before all that monsoonal we've had in the past few days hitbiffvernon wrote:And you get a bonus by getting to live in Chelsea, have an underground home cinema in the basement and a swimming pool in the sub basement. What's not to like?
I agree with the other points, but I'm not sure about this one. The competition to win tenders is so great now that margins are being eroded to the point that there's a lot of work but not much money to do it well and make a profit. Sure there's some big salaries being paid, but not much in the way of dividends.PS_RalphW wrote: 2. The large building corporations ensure maximum profits from their land investments by corrupting the planning process and squashing building regulation reforms.
I have experience of this too, and it's true, I believe Michael Heseltine (sp?) actually had the audacity to recommend the practice publicly.woodburner wrote:The corps have always done ok.When the margins get small, they just stop paying their subcontractors. If they can hang out long enough, the subs go bankrupt, then there is no one to pay.
This should read asset price hyperinflation or hyperdeflation.stevecook172001 wrote:
It will end with hyperinflation or hyperdeflation. It's just a matter of when. And when that happens there will be a 3rd World War.
Indirectly Yes, I'd agree with you. However the rising house prices have been necessary for some years now to allow people to expand their debt to keep spending. The debt is what generates the money. TPTB think they're onto a winner as the debts are 'guaranteed by the 'property' and all the risk is with the debtor. Except now, as is starting to become apparent, that is no longer the case for a huge number of households.woodburner wrote:IMO house prices and rents are high because the government an banks keep printing money. This helps keepinflation going. People have always got as much money as they could lay their hands on when buying a house, with the expectation the prices will always go up. I think life is about to change, and now is not the time to buy. Rents seem to be driven by landlords who have bought to let. Then again, I could be wrong.
