UK House prices: News & Views

[LauraB]

Don't understand. Who thinks like that? The majority of my money is 'saved' in my house but, all other things being equal, I'm going to need somewhere to live until I depart this mortal coil ... so why would I ever think of my house in terms of gold?

 

Wires crossed. I was only responding to 'prices'

what is the point of thinking of house prices in terms of gold?

.......................................

What did they say when you said 'My investment in gold has doubled, your investment in property has, at best, stagnated and has probably gone down. I can now buy twice as many properties as I could have 5 years ago'? Do they still trot out the old property mantras?

 

I might wear purple, but that is not my style!

Don't I get any brownie points?

Sorry to disappoint but the host is one of my favourite people, & as he is awaiting the 'Olympic effect' to finally find him a buyer for his gated box in Stratford so he can retire early , I found a non-Brit to converse with to save his feelings.

[Jake]

'cheap as chips' This sticks in my head, Van. Do you think so? I see the graph and if I was in the US I may start viewing properties. But equally likely is 2000 USD gold. Thus houses for around 80-85 ounces. I suppose once there at 2000 you'd be persuaded to move the goalposts again and listen to 5000USD (Schiffy) or 8500USD (Robin Griffiths). So av houses around 20 ounces. Cheap as chips? Now or then? Of course gold at 8000 USD doesnt mean your dollars will still be the same value as today...but maybe they would still buy you the same house. (ie no nominal change from today).

 

Any rate I am not in the US and wont be buying US property...but this is a useful exercise nevertheless.

I suppose we are now just under 100oz for the US and 168oz for the UK. Cheaper than yesterday's chips. I wonder how much they'll be by Christmas?

[Jake]

what is the point of thinking of house prices in terms of gold?

 

 

All told, swapping gold bars for bricks, whether as investment or a place to live, hasn’t looked this attractive since the inflationary depression of 1981. US housing’s previous low came during the deflation of the Great Depression. Never mind that the average US home doubled in size inbetween, or swelled another 40% since. Because whichever flavor of depression we’ve got today, the immutable object of unchanging, unencumbered gold has once more whipped back to its pre-20th century value against the ever-changing, credit-reliant market of residential housing.

It’s almost as if the “long boom” of easy credit never happened. At bottom, the average US home cost the equivalent of some 71.5 ounces of gold in 1934. Forty-six years later, it fell below 77 ounces of gold. Today’s 103-ounce price tag isn’t rock-bottom yet. But compared to the top of a decade ago, it’s getting there.

 

 

There's a few points of thinking house prices in gold, dispassionate or not, I guess?

[drbubb]

It’s almost as if the “long boom” of easy credit never happened. At bottom, the average US home cost the equivalent of some 71.5 ounces of gold in 1934. Forty-six years later, it fell below 77 ounces of gold. Today’s 103-ounce price tag isn’t rock-bottom yet. But compared to the top of a decade ago, it’s getting there.

 

There's a few points of thinking house prices in gold, dispassionate or not, I guess?

Yeah.

But the average homes is so much BIGGER.

It becomes a magnet for buying all sorts of consumer junk, that the homeowner doesn't really need.

 

Will people's standard of living improve or diminish if they live in smaller homes closer to the city, and wind up driving a good deal less?

 

I reckon it will improve, as people shift their aspirations to things like community, cooking better food, and growing organic vegetables in small "victory gardens".

[Jake]

Yeah.

But the average homes is so much BIGGER.

It becomes a magnet for buying all sorts of consumer junk, that the homeowner doesn't really need.

 

Will people's standard of living improve or diminish if they live in smaller homes closer to the city, and wind up driving a good deal less?

 

I reckon it will improve, as people shift their aspirations to things like community, cooking better food, and growing organic vegetables in small "victory gardens".

I think the great downsizing has already started, (even in Japan). I was reading that by 2030-50 there will be more single dwelling households than family dwelling here. Go figure

 

But bigger houses don't 'have to' mean married to consumer junk. You could have a larger family (against the trend) or you could be an extended family (on the increase)/community of like minds etc etc. Or you might have a buisness going, or be a smallholding/farm.

I am sure the smaller walkable homes thing will gain traction (esp with YOUR oil forecasts), in fact it already is/aspirations are. But life may get difficult in (parts of) the cities.

Knowing what you want. This is a tricky one and a difficult act to balance.

BTW can you start a thread tracking US walkable community house prices. Are they buccking the trend? I expect so. I'd also be interested in seeing some of these 100 oz US homes. Where and what are they like?

I found an interesting Japan foreclosed/real estate link btw...but I wouldn't even go to Tokyo at the moment, let alone buy. But that's just me. They just felt the 6.4 quake yesterday. And I don't think that is near over. Plus radiation/contamination, food sources all from Tohoku, all contaminated. But you may see that as a buying opportunity, blood on the streets kind of thing.

All the best! J.

 

Very good info here and links. Chris Dillon is mentioned. How is he?

 

http://www.facebook.com/RealEstateJapan

[drbubb]

I think the great downsizing has already started, (even in Japan). I was reading that by 2030-50 there will be more single dwelling households than family dwelling here. Go figure

 

But bigger houses don't 'have to' mean married to consumer junk. You could have a larger family (against the trend) or you could be an extended family (on the increase)/community of like minds etc etc. Or you might have a buisness going, or be a smallholding/farm.

I am sure the smaller walkable homes thing will gain traction (esp with YOUR oil forecasts), in fact it already is/aspirations are. But life may get difficult in (parts of) the cities.

Knowing what you want. This is a tricky one and a difficult act to balance.

BTW can you start a thread tracking US walkable community house prices. Are they buccking the trend? I expect so. I'd also be interested in seeing some of these 100 oz US homes. Where and what are they like?

I found an interesting Japan foreclosed/real estate link btw...but I wouldn't even go to Tokyo at the moment, let alone buy. But that's just me. They just felt the 6.4 quake yesterday. And I don't think that is near over. Plus radiation/contamination, food sources all from Tohoku, all contaminated. But you may see that as a buying opportunity, blood on the streets kind of thing.

All the best! J.

 

Very good info here and links. Chris Dillon is mentioned. How is he?

 

http://www.facebook.com/RealEstateJapan

A Walkable Community Property Price Index for the US ?

That's an interesting idea - I suppose one could compare the Most Walkable with Least Walkable communities

 

I agree. I should make sense to stay away from Tokyo, and and maybe focus your life on the "most stable" parts of Japan, which may be to the North and to the West, I suppose. Have you found a map for Japan for the Post upheaval period, as may be produced by various psychics?

 

I haven't spoken with Chris recently, but I see that "Christopher Dillon" gives a thumbs up on that Facebook page you linked too. Perhaps you should be-friend him on Facebook, and pass on my regards. Then you might introduce yourself as a GEI member.

[drbubb]

The selling continues... BDEV-chart

 

UK:BDEV - Barratt Developments PLC

8/3/2011 08:28 AM

90.30 Change: -2.35

Open: 91.90 / High: 92.00 / Low: 90.05 // Volume: 376,087

Percent Change: -2.54%

 

Did anyone else see the CEO of Taylor Woodrow on Bloomberg spinning for his life.

 

The company reported a Loss, and he said Bloomberg had its numbers wrong, and proceeded to talk about operating profits, rather than the bottom line.

 

My impression was this was a cheap trick, coming from a "cheap trick company."

[BoldAsBrass]

I reckon it will improve, as people shift their aspirations to things like community, cooking better food, and growing organic vegetables in small "victory gardens".

 

Do you think the world is going to turn into some sort of big kibbutz?

 

Surely most people's first aspirations are enough money to provide somewhere to live, food and clothes. Oh, and a car, phone, gas, electricity, broadband

... and income tax, national insurance, VAT, council tax etc. etc. ad infinitum, ad nauseam.

 

If we have some sort of crisis ... you see us all suddenly turning the local park into small 'victory gardens'. Where I live it would mean the park being shared by several thousand people. You envisage some sort of rural utopia as a result of this crisis? I can't say I'm wild about the idea but I foresee a lowering of living standards and, in due course, social unrest.

[BoldAsBrass]

There's a few points of thinking house prices in gold, dispassionate or not, I guess?

 

Yes, but what's the point? You make house buying decisions directly based on the relative relationship between the price of gold and houses?

 

You live in a tent and buy gold until the time is right? Which, for much of my lifetime, would have meant living in a tent all along.

 

The point I was trying to make was that, for the average person, the relationship between the price of gold and houses is of only academic interest. Interesting it may be, but not something the average person will ever be able to take into account.

 

If I had listened to the gold bugs when I sold to rent in 2003 - if I had had the nerve to put my STR fund into gold and wait (and wait, and wait) I would have doubled my money (I guess, I haven't checked the numbers ... all I know is that gold has gone up a lot lately). But I didn't. I waited 7 years in rented accommodation and bought back into the property market.

 

The only thing that stopped things being a bit of a disaster is that in the first few years the interest on my STR fund more than paid the rent so I saved some money up and, in the area I live, house prices now are about the same as they were in 2003 (the boom had pretty much happened here by 2003).

 

So, you know who not to come to for investment advice! I am willing to make predictions if asked to allow you to do the exact opposite and, no doubt, make money.

[LauraB]

Do you think the world is going to turn into some sort of big kibbutz?

 

Surely most people's first aspirations are enough money to provide somewhere to live, food and clothes. Oh, and a car, phone, gas, electricity, broadband

... and income tax, national insurance, VAT, council tax etc. etc. ad infinitum, ad nauseam.

 

If we have some sort of crisis ... you see us all suddenly turning the local park into small 'victory gardens'. Where I live it would mean the park being shared by several thousand people. You envisage some sort of rural utopia as a result of this crisis? I can't say I'm wild about the idea but I foresee a lowering of living standards and, in due course, social unrest.

 

I'm going to be shot for this: Some/most of your reaction is caused by being locked-in to the UK 'rats-in-the-maze' aura, (matrix?). Buried by relentless bills; an unhealthy degree of imposed 'we'-think; living too close to one another; & possibly, a one-time-around mentality.

Trying to make the right choices in such an environment is not easy.

[John Doe]

I'm going to be shot for this: Some/most of your reaction is caused by being locked-in to the UK 'rats-in-the-maze' aura, (matrix?). Buried by relentless bills; an unhealthy degree of imposed 'we'-think; living too close to one another; & possibly, a one-time-around mentality.

Trying to make the right choices in such an environment is not easy.

 

Shot? Why?

 

It is very true that there are a huge number of UK citizens who struggle by every day, living in shoeboxes with tiny rooms and no space, jammed together in what amounts to only about 10% of the UK land. Of course this has an effect.

 

It's part of my reasoning when explaining why I think the UK market has some particular traits not found elsewhere.

[drbubb]

Do you think the world is going to turn into some sort of big kibbutz?

 

Surely most people's first aspirations are enough money to provide somewhere to live, food and clothes. Oh, and a car, phone, gas, electricity, broadband

... and income tax, national insurance, VAT, council tax etc. etc. ad infinitum, ad nauseam.

As society begins to unravel, and the tax and spend institutions fade, people will find they will need their local community more... and the value of those community connections will become more clear

 

Gold is not the ultimate "safe haven" investment. Community is.

[Jake]

Yes, but what's the point? You make house buying decisions directly based on the relative relationship between the price of gold and houses?

 

You live in a tent and buy gold until the time is right? Which, for much of my lifetime, would have meant living in a tent all along.

 

The point I was trying to make was that, for the average person, the relationship between the price of gold and houses is of only academic interest. Interesting it may be, but not something the average person will ever be able to take into account.

 

If I had listened to the gold bugs when I sold to rent in 2003 - if I had had the nerve to put my STR fund into gold and wait (and wait, and wait) I would have doubled my money (I guess, I haven't checked the numbers ... all I know is that gold has gone up a lot lately). But I didn't. I waited 7 years in rented accommodation and bought back into the property market.

 

The only thing that stopped things being a bit of a disaster is that in the first few years the interest on my STR fund more than paid the rent so I saved some money up and, in the area I live, house prices now are about the same as they were in 2003 (the boom had pretty much happened here by 2003).

 

So, you know who not to come to for investment advice! I am willing to make predictions if asked to allow you to do the exact opposite and, no doubt, make money.

BAB, I think you talk a lot of 'common sense', which is... utterly useless. You remind me of my uncle, (RIP). The average person would do very well to look into the relationship between the price of gold and houses. Where you buy on the cycle can seriously damage your wealth prospects. What would you advise your own children? Not to bother looking? Surely not.

Living in a tent? WTH are you on? You only had to str and buy gold and be 4 times up. You could have bought 4 houses with your str fund. (please, check the numbers).

[drbubb]

Living in a tent? WTH are you on? You only had to str and buy gold and be 4 times up. You could have bought 4 houses with your str fund. (please, check the numbers).

I bought 10...

10 apartments in Hong Kong, after having sold one property in London, and in the interim - invested in gold shares

[Jake]

I bought 10...

10 apartments in Hong Kong, after having sold one property in London, and in the interim - invested in gold shares

yes but I mean 4 for cash, no mortgage leverage. And you mentioned a few nights poor sleep along the way-I think. Jags are fast but shermans are safe®. Anyrate, I am in a clapped out old mini. But it is a car I was always fond of.

[drbubb]

yes but I mean 4 for cash, no mortgage leverage. And you mentioned a few nights poor sleep along the way-I think. Jags are fast but shermans are safe®. Anyrate, I am in a clapped out old mini. But it is a car I was always fond of.

Sure.

Even if I had had no debt, the speed of the property price fall in Hong Kong would have caused me to lose sleep.

 

Over 25 weeks or so, it fell at over 1% a week (on average). That's "crash cruise speed" on steroids.

[John Doe]

Sure.

Even if I had had no debt, the speed of the property price fall in Hong Kong would have caused me to lose sleep.

 

Over 25 weeks or so, it fell at over 1% a week (on average). That's "crash cruise speed" on steroids.

 

Hi Dr.B. How is the Haliwide NSA data looking?

 

Have you got a chart of the action since you started compiling the data?

[BoldAsBrass]

BAB, I think you talk a lot of 'common sense', which is... utterly useless. You remind me of my uncle, (RIP). The average person would do very well to look into the relationship between the price of gold and houses. Where you buy on the cycle can seriously damage your wealth prospects. What would you advise your own children? Not to bother looking? Surely not.

 

My eldest son is 22. "Son, when the time comes to think about buying a property for the first time, make sure you bear in mind the relationship between the price of houses and the price of gold."

 

"Okay Dad - I've had a look and, just now, houses are pretty cheap compared to the gold price - way below the average in fact."

 

"There you are then son, now is the time to buy."

 

"But Dad, I can't afford a house because I haven't got enough gold/money or money/gold to buy one?"

 

Living in a tent? WTH are you on? You only had to str and buy gold and be 4 times up. You could have bought 4 houses with your str fund. (please, check the numbers).

 

When I STRed I thought that the housing market, being seriously overvalued in my area by 2003, was going to crash in the same way it did in 1988. I didn't realise - and nor did anyone else at that time - that the correct course of action was to sell your house, buy gold, wait, wait, wait and wait a bit more until gold went up enough to make the waiting worthwhile, sell your gold and buy a house - and have a load of extra money too.

 

Of course, what could have happened is that house prices corrected (as they started to do in 2004/2005 and the fool Gordon Brown had not done everything he could to re-inflate the borrowing boom and keep the house price boom going) and that, after a few years housing could have moved back to normal affordability levels and the credit crunch of 2008 would never have happened and, likewise, the boom in gold in gold.

 

Things could just as easily have panned out like that. As I said in my original post, if you want investment advice, ask me and do the opposite. Right now I'm thinking of taking 100k out of my offset mortgage account and buying gold with it. You have been warned.

[drbubb]

Hi Dr.B. How is the Haliwide NSA data looking?

Have you got a chart of the action since you started compiling the data?

You can follow it here:

http://www.greenenergyinvestors.com/index.php?showtopic=10607

[frizzers]

Goldfinger,

 

How about an update on your gold vs London house prices chart?

 

Best

CC

[drbubb]

"There you are then son, now is the time to buy."

"But Dad, I can't afford a house because I haven't got enough gold/money or money/gold to buy one?"

This points out the big LIE here:

People say: "Gold is a hedge for inflation."

 

It isn't. Gold prices have run far ahead of inflation. You can buy a much better "Man's suit" with an ounce of gold now, than you could 3-5 years ago.

 

And since if ran ahead of inflation, it can fall back too, even if inflation rises.

 

It is tough to buy gold, since monetary policy has robbed people of a return on their savings, and that is why money has flowed into gold.

[BoldAsBrass]

As society begins to unravel, and the tax and spend institutions fade, people will find they will need their local community more... and the value of those community connections will become more clear

 

Gold is not the ultimate "safe haven" investment. Community is.

 

Yes, society began to unravel a bit in Tottenham the other night. I think I'm right in saying that 'community' was not the main beneficiary.

 

The tax and spend institutions won't 'fade' - they'll do the opposite - they, and their police force, will loom ever larger in our lives.

[drbubb]

Yes, society began to unravel a bit in Tottenham the other night. I think I'm right in saying that 'community' was not the main beneficiary.

The tax and spend institutions won't 'fade' - they'll do the opposite - they, and their police force, will loom ever larger in our lives.

 

The Road of dependency-on-the-state leads to Fascism.

Fortunately, there is an alternative : Enlightened community involvement

=========================================================================

 

If we try to stay in the bubble of spiritual self-sufficiency, the hurting of the world sneaks in as various of the new diseases, forcing itself upon our consciousness. Consider, for example, two of the most significant of the new diseases, MCS (multiple chemical sensitivities) and electromagnetic sensitivity. Toxic chemicals and EMFs are the physicalization of our negativity, as well as the byproduct of our mindset of separation that sees nature as an indifferent reservoir for our wastes. For the chemically and electromagnetically sensitive, no amount of retreat is enough. Trying to avoid negativity, we have to retreat further and further, until the repeated intrusion of the world upon our serenity makes us realize we have to cleanse the whole world of toxic chemicals and all they represent, not just avoid them.

 

The yogic teaching, "Don't try to cover the world with leather, just wear shoes," served us well in the age of spiritual self-sufficiency, but it serves no longer, especially if taken to mean, "Heal thyself; the world is not your responsibility." That was true, for a time. It was medicine. It healed us of self-rejection and self-sacrifice. It was a necessary stage toward the next step, when we do seek to heal the world - not as an act of self-sacrifice, not at the cost of our own well-being, but as a necessary step in our own self-healing. Through our relationship to the other we heal ourselves. There is no other way.

 

This realization often manifests as a desire to find one's true purpose in life, one's service to the world. Such a purpose is never just about the separate egoic self. It is always about service; it is about one's gifts and how to give them. Purpose is about gift and relationship. The emerging state of vitality, joy, and love that humanity is entering is not a place where we can abide for long on our own. We need each other.

 

/source: http://richardalanmiller.com/ram/index.php?option=com_content&view=article&id=346&Itemid=426

[scruffian]

CHEAP PROPERTY?

 

UK property may look cheap relative to gold, but it looks expensive relative to income.

 

So unless your income is in Gold, property owners still have a problem

 

This got me thinking... In the UK, with a more or less stable population, an ageing population, and likewise a relatively stable number of properties, won't we see an increasing number of people who own their property outright? In this scenario isn't the value of a house only important relative to it's desirability to other house owners, not their ability to pay that value based on their income?

 

Doesn't this mean that the value of property becomes detached from earnings? Maybe I am missing something...

[G0ldfinger]

Update.

 

http://gold.approximity.com/gold-silver_watch.html