Guest Guest66881 Posted March 27, 2014 Share Posted March 27, 2014 Britain is on the verge of a dangerous housing bubble, the Treasury’s chief watchdog warned yesterday. Soaring property prices are being inflated by speculators banking on further gains, according to Robert Chote, who heads the Office for Budget Responsibility. ‘With very rapid house price increases in some parts of the country you might see bubbly activity where people are willing to buy stuff off plan or not intend to live in it,’ Mr Chote told MPs. Prince Charles gave a separate warning yesterday that soaring prices in London will drive a generation of young people out of the capital. He said the dream of home ownership was becoming further and further out of reach for swathes of workers. The average price of a home in London is expected to jump from £458,000 to £650,000 over the next six years. Sound familiar. http://www.dailymail.co.uk/news/article-2590306/Beware-house-price-bubble-Treasury-watchdog-sounds-alarm-runaway-property-market.html Link to comment Share on other sites More sharing options...
jasepom Posted March 27, 2014 Share Posted March 27, 2014 So if present prices equate to about 1 million dollars the future prices would be about 1.5 million. You can get a fantastic home in the outer east of Melbourne for a lot less than 1 million dollars today if you like a pool or big back yard. You can stick your pokey London houses thanks. I hope there is a crash and people wake up in London. Link to comment Share on other sites More sharing options...
Quoll Posted March 27, 2014 Share Posted March 27, 2014 Again? We already had one here. I'd be more concerned that there hasn't been one in Aus yet. Link to comment Share on other sites More sharing options...
KIRK AND CO Posted March 27, 2014 Share Posted March 27, 2014 So if present prices equate to about 1 million dollars the future prices would be about 1.5 million. You can get a fantastic home in the outer east of Melbourne for a lot less than 1 million dollars today if you like a pool or big back yard. You can stick your pokey London houses thanks. I hope there is a crash and people wake up in London. I think there is more to this statment than you are letting on, did you sell in uk when houses were going through a bad patch ? & now in oz it has the chance of it happening there too. Link to comment Share on other sites More sharing options...
cheswick Posted March 27, 2014 Share Posted March 27, 2014 Again? We already had one here. I'd be more concerned that there hasn't been one in Aus yet. Indeed,in Sydney where I live at the moment the housing prices are going crazy fuelled mainly by overseas buyers pushing the price up..i know a lot of people who earn good wages struggling to afford the prices...let alone younger folk trying to enter the market...most of them are having to move out of the "good" suburbs to outer suburbs to afford to buy...then there is a very long commute...it seems to be a repeating trend in OZ and the UK...when will they both wake up? Link to comment Share on other sites More sharing options...
Johndoe Posted March 27, 2014 Share Posted March 27, 2014 It's already happening here..............the bubble has burst for me anyway. My house was valued at approx $680k 3 yrs ago, now it's on the market for offers over 599k. We re-mortgaged to downsize and the bank valuer (suncorp) put it at only 550k and the banks are nearer the mark than the real estate agents. It cost us $380k land and build 9 yrs ago. Considering that we made $205k on our first home after 5 yrs prior to that.......buying at 110K and selling at 315K. I reckon that it's looking pretty iffy nowadays Link to comment Share on other sites More sharing options...
Guest The Pom Queen Posted March 27, 2014 Share Posted March 27, 2014 It's already happening here..............the bubble has burst for me anyway. My house was valued at approx $680k 3 yrs ago, now it's on the market for offers over 599k. We re-mortgaged to downsize and the bank valuer (suncorp) put it at only 550k and the banks are nearer the mark than the real estate agents. It cost us $380k land and build 9 yrs ago. Considering that we made $205k on our first home after 5 yrs prior to that.......buying at 110K and selling at 315K. I reckon that it's looking pretty iffy nowadays Sorry to hear that Kev and the problem is if the bank has valued it at that then this is usually the max amount people can get a mortgage for. Link to comment Share on other sites More sharing options...
Que Sera Sera Posted March 27, 2014 Share Posted March 27, 2014 It does make we wonder. We rented in a suburb that is still very sought after. Our house was on the market for $580, it stayed on the market for 18 months and finally sold for $420. It was a really nice house but it obviously had been over valued. I think a lot of that seems to go on. Link to comment Share on other sites More sharing options...
T-bone Posted March 27, 2014 Share Posted March 27, 2014 There is always doom and gloom by UK press and a minority of economists when there's an increase in the property market. The UK has had a four year drop in prices and now a recovery is under way. London has bucked the trend and assuming the international buyers pull back (example; taking the current issues with Russia into consideration) there will probably be a hiatus, which isn't a bad thing, but there will not be a bust. The fact is salaries are on the increase and when you have this situation you have an upward drive on prices. The change in legislation on pensions alone will drive up the buy to let market, and when you have buyers that can't get on the housing ladder - they rent. This demand will again drive up the buy to let market. The simple fact is that demand will outstrip supply for at least 10 years, and therefore there is likely to be a general increase in prices during this period. Most economists are actually predicting a 14 year period of sustained growth in UK house prices with perhaps a few pauses in that time. Why anyone could "hope" there is a crash in the London/UK housing market is a pretty weird thing to say (jasepom). No one wants their house, which is their financial security, to lose money and I personally wouldn't wish it on anyone. Link to comment Share on other sites More sharing options...
Johndoe Posted March 27, 2014 Share Posted March 27, 2014 Sorry to hear that Kev and the problem is if the bank has valued it at that then this is usually the max amount people can get a mortgage for. Yep! we'll still be in front but not as much as we expected and with the medical bills I've got atm, the poor valuation couldn't have come at a worse time. Link to comment Share on other sites More sharing options...
flag of convenience Posted March 27, 2014 Share Posted March 27, 2014 Again? We already had one here. I'd be more concerned that there hasn't been one in Aus yet. Much more to the point. There was a fall but an overseas led recovery is well underway. Prices on average I believe 8% above highest rate of a few years back. Some 14% of purchases going to overseas buyers. Inflating the market definitely in Sydney and Melbourne. Government seems unconcerned about it. Link to comment Share on other sites More sharing options...
flag of convenience Posted March 27, 2014 Share Posted March 27, 2014 There is always doom and gloom by UK press and a minority of economists when there's an increase in the property market. The UK has had a four year drop in prices and now a recovery is under way. London has bucked the trend and assuming the international buyers pull back (example; taking the current issues with Russia into consideration) there will probably be a hiatus, which isn't a bad thing, but there will not be a bust. The fact is salaries are on the increase and when you have this situation you have an upward drive on prices. The change in legislation on pensions alone will drive up the buy to let market, and when you have buyers that can't get on the housing ladder - they rent. This demand will again drive up the buy to let market. The simple fact is that demand will outstrip supply for at least 10 years, and therefore there is likely to be a general increase in prices during this period. Most economists are actually predicting a 14 year period of sustained growth in UK house prices with perhaps a few pauses in that time. Why anyone could "hope" there is a crash in the London/UK housing market is a pretty weird thing to say (jasepom). No one wants their house, which is their financial security, to lose money and I personally wouldn't wish it on anyone. A crash or at least downward trend is the only thing to bring prices down to earth that Londoners can afford. Some three quarters of property was going to foreigners when I was house hunting there in 2010. The price being asked by agents was incredible for what was being offered. Housing should return to its core value. Not as an investment item to flip at a massive profit every couple of years. Market so out of whack with reality it is crazy. Link to comment Share on other sites More sharing options...
Guest Posted March 27, 2014 Share Posted March 27, 2014 Not sure what the warning is? Beware there is going to be a boom so buy quickly.....thus fueling the boom? Beware and don't buy because bust follows boom and you could end up with a house worth less than you paid? If you are buying a home then you buy when the time is right for you and you buy what you can afford. If you only plan to stay in an area a few years then it probably isn't the right time to buy. If you are buying an investment then as many financial products warn the price may go down as well as up. It is people just starting out I feel sorry for, especially those who may rush into buying a property when the time isn't right and is more than they can afford - happened to me as a naive 23 year old in the '80s boom & lost £15k - not on paper in the value of my house but in real cash when the bust came and unemployment followed. I don't think JohnDoe was whinging about buying at $380k and selling at say $550k but plenty of people do - so what if it was once worth $680k, at that time you'd have been paying a lot for to buy your next one. I think the point JohnDoe is making is that there is evidence of house prices dropping where he is - hopefully it means he'll pick up a bargain where he buys. I know we can now buy houses we could only have dreamed of when we moved in 2008 because we made money on our house in Australia in the same period houses were going down in the UK. Link to comment Share on other sites More sharing options...
Lambethlad Posted March 27, 2014 Share Posted March 27, 2014 Chinese buyers are only interested in 1 million plus premium property. They see Oz as a safe and cheap place to invest. They just buy it and sit on it. A friend who lives in the exclusive suburb of Camberwell in Melbourne said Chinese people bought a house in his street two years ago and no one has ever lived there. The only thing to do to level off prices is to stop foreigners buying residential property but I suppose they would always find a way around it. Link to comment Share on other sites More sharing options...
Xenon4017 Posted March 27, 2014 Share Posted March 27, 2014 It's already happening here..............the bubble has burst for me anyway. My house was valued at approx $680k 3 yrs ago, now it's on the market for offers over 599k. We re-mortgaged to downsize and the bank valuer (suncorp) put it at only 550k and the banks are nearer the mark than the real estate agents. It cost us $380k land and build 9 yrs ago. Considering that we made $205k on our first home after 5 yrs prior to that.......buying at 110K and selling at 315K. I reckon that it's looking pretty iffy nowadays To be honest, what was really iffy is a house nearly tripling in value in 5 years. Anyone who bought in the late 90's/early 00's could hardly fail to make money. Your house went up by 40k per year. It's not sustainable, is it. Even if the bank are right you've still made 170k. Which works out to be a 44% increase. Not bad considering the market has been stagnant/lightly receding for 3 of those 9 years. Link to comment Share on other sites More sharing options...
WeegieDave Posted March 27, 2014 Share Posted March 27, 2014 I put an offer on a house last week for $680 k. Got a call from the mortgage broker today saying the bank wants to evaluate it prior to issuing finance. Will be interesting to hear the outcome next week! It could screw me though! Link to comment Share on other sites More sharing options...
Guest Guest66881 Posted March 27, 2014 Share Posted March 27, 2014 I put an offer on a house last week for $680 k. Got a call from the mortgage broker today saying the bank wants to evaluate it prior to issuing finance. Will be interesting to hear the outcome next week! It could screw me though! Good luck bro, hard on a single income but you will be alright:wink: Link to comment Share on other sites More sharing options...
Guest Posted March 27, 2014 Share Posted March 27, 2014 I put an offer on a house last week for $680 k. Got a call from the mortgage broker today saying the bank wants to evaluate it prior to issuing finance. Will be interesting to hear the outcome next week! It could screw me though! Bank evaluated our house in Perth for $80k less than it sold for - hard when you're the purchaser. We've put an offer in on a house here this week at the valuation price but reckon we'll be out bid by someone willing to pay more. It's mad surely a house is worth what someone is willing to pay? Link to comment Share on other sites More sharing options...
Guest Guest66881 Posted March 27, 2014 Share Posted March 27, 2014 Bank evaluated our house in Perth for $80k less than it sold for - hard when you're the purchaser. We've put an offer in on a house here this week at the valuation price but reckon we'll be out bid by someone willing to pay more. It's mad surely a house is worth what someone is willing to pay? Mad yes, but a bank cannot crystal ball the googly eyes of a buyer and the cash they would throw at said house purchase. Link to comment Share on other sites More sharing options...
HappyHeart Posted March 27, 2014 Share Posted March 27, 2014 pleased we bought at the lower end of the market and got 'a good price' happy if we make 20k on it...20k more than we'd have if still renting! Link to comment Share on other sites More sharing options...
Londongal76 Posted March 27, 2014 Share Posted March 27, 2014 Londons bubble won't burst, it hasn't in the 15 years i've been here. The doomsayers roll it out about once a year but demand well outstrips supply and that ain't changing anytime soon. Fact is people are getting into bidding wars offering over the market price to even get a look in at the moment. The help to buy scheme will see that continuing for a long while yet. Link to comment Share on other sites More sharing options...
Johndoe Posted March 27, 2014 Share Posted March 27, 2014 Bank evaluated our house in Perth for $80k less than it sold for - hard when you're the purchaser. We've put an offer in on a house here this week at the valuation price but reckon we'll be out bid by someone willing to pay more. It's mad surely a house is worth what someone is willing to pay? Not if the bank will only mortgage to their valuation. Link to comment Share on other sites More sharing options...
Guest Posted March 27, 2014 Share Posted March 27, 2014 Not if the bank will only mortgage to their valuation. I understand that but if every offer on a property is more then the bank valuation then the valuation is wrong! We challenged the valuation the bank on our house - as 'evidence' they were right they provide a copy of the valuation which had been done in Adelaide (the house was in Perth) and included screen shots from Google earth taken before the house was built! No-one had even looked at the outside. Link to comment Share on other sites More sharing options...
Guest Posted March 27, 2014 Share Posted March 27, 2014 Mad yes, but a bank cannot crystal ball the googly eyes of a buyer and the cash they would throw at said house purchase. It's not unusual in Scotland for houses to be re-valued after all the offers have been made, we've lost out on houses where we offered TWICE the asking price and people were willing to pay still more (this is pre-2008 not recently) Link to comment Share on other sites More sharing options...
zk2102 Posted March 27, 2014 Share Posted March 27, 2014 We had our house valued two weeks ago. It's going on the market in another two weeks. They said for a quick sale £650 or we could hold on for £685. They also said that it will probably be 'foreign' money that's been invested off shore. The house next door to ours was sold to a cash buyer who is having it ripped apart and extended before they move in. I can't see the 'bubble' ever bursting in London because there just isn't enough housing stock. Sorry state of affairs that I could never afford to buy my own house if I were looking now. Ours is an ex council house with the typical box 3rd bedroom. Link to comment Share on other sites More sharing options...
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