The next property surge?

[stupower]

I would welcome views about the likely date for the next property surge? - pundits offer various guesses with little agreement. A graph in The Property Development Handbook quotes previous peaks in 1973; 1979; 1989 and 2003, which suggests it could be a couple of years yet?

[brian]

It's a good question - but note the differences between the dates:

6 years
10 years
14 years

Looking at the current situation, property prices need to fall around 20% just to reach their normal trend level against earnings.

However, also note that earnings are now coming down due to pay freezes and similar that are cutting their real value.

So property prices continue far ahead of their normal earnings trend, which the earnings trend drops further.

Not a good sign, IMO.

At least in the USA the market appears to be potentially normalising - slow, but no longer any really big drops, but only after falls of around 30-40%. They're a couple of years ahead of us in the devaluing process IMO, and we aren't even half way there yet.

[Hotpend]

About half a million public sector workers are to lose their jobs. The government hope the private sector will create new jobs to make up for the loss. There is no evidence of this happening yet. There is a pay freeze in the public sector, and pay in other sectors of the economy is not matching inflation. Interest rates are at a record low but soon the Bank of England will need to raise rates to choke off rising inflation. I would guess house prices are likely to fall.

[New Homes Expert]

Property oprices will fall before they rise again imo.
So if prices fell 20% then they would then have to rise by 25% to be back where they were.

Buy for a home not for an investment. All this speculating is what caused the mess in the first place.

[Dan S]

That's good advice from NHE. There's never a bad time to buy if it's for somewhere to live in.

[Dan S]

Hi Shaxi

My point really is that if you buy a home now then it goes up and down with the market, so as long as it's a home then from that point onwards it really doesn't make any difference. You're right that buying at the right time INITIALLY makes a difference, but that's really where the relevance stops. In order to buy at the trough, sell at the peak and then buy at the trough again requires moving into rented accommodation whilst you wait for the second trough, which of course is ridiculous, not to mention utterly speculative. If you're getting a BTL property, then there absolutely IS a right time to buy. To conclude, i'd like to offer your theory to those who bought homes in 2007 and are now desperate to move.

[plumber]

safe as houses ? if investors are not buying gold, where do they invest ?

[Dan S]

That's the million dollar question!

[The Buy to Let Business]

In our opinion prices will remain flat with regional variances. The strong rental demand due to first time buyers being priced out will ensure buy to let investors will still buy if the price is right. The next property price surge is likely to be some years away, but as history has shown in the long term prices will go up.

[Dan S]

If there could be a tweet representative of the entire market...current and future...then that would be it! I absolutely agree with you. People always forget the issue of regional variation..