Hypothetical situation regarding dollar vs peso

[harpo]

That $500,000 plus house, holidays, etc is paid for on debt.

And how did you find out that?

England is not Europe. There are still plenty of places in Europe where houseprices are not going down or just slowly

Sorry, I assumed you were using your friends as examples of normal people in reasonably well-paid jobs.

The UK is in Europe as much as Staten Island is in the States. It's been in the EU since 1974, in just about every European body you can name - with the exception of the Euro (which puts us outside Europe in the same way as Switzerland is outside Europe).

If BBW tells us house prices are going down in Norway, then you can assume they are dropping pretty much everywhere. That has been my experience and I am based in France at the moment. Nowhere is immune from this slump.

 

[bigbadwolf]

The UK is in Europe as much as Staten Island is in the States. It's been in the EU since 1974, in just about every European body you can name - with the exception of the Euro

And it's not in Schengen, to be pedantic.

 

[mini]

Sorry, I assumed you were using your friends as examples of normal people in reasonably well-paid jobs.

The UK is in Europe as much as Staten Island is in the States. It's been in the EU since 1974, in just about every European body you can name - with the exception of the Euro (which puts us outside Europe in the same way as Switzerland is outside Europe).

The point is, I think as I read it, that what happens in the UK does not mean it is happening in Europe. Like Paris is in France, but Paris is not France.

House prices in Switzerland are not going down. They went up 5%.

 

[BlahBlah]

Sorry, I assumed you were using your friends as examples of normal people in reasonably well-paid jobs.

Privatly they are most likely not in debt other then the home, and that is okay as long as you can afford it

The UK is in Europe as much as Staten Island is in the States. It's been in the EU since 1974, in just about every European body you can name - with the exception of the Euro (which puts us outside Europe in the same way as Switzerland is outside Europe).

UK is not Europe, I already gave you some reasons and can give you many more

If BBW tells us house prices are going down in Norway, then you can assume they are dropping pretty much everywhere. That has been my experience and I am based in France at the moment. Nowhere is immune from this slump

I am not familiar with the prices in Norway but I am sure they are not tanking. This is the same in many places in the north of Europe.

A property value is a non-issue for most people, about 90 to 95% of the people who own a home are not looking to sell or to move. As long as they can afford the home they have there is no reason to worry






Mini, you are right

 

[bigbadwolf]

I am not familiar with the prices in Norway but I am sure they are not tanking. This is the same in many places in the north of Europe.

If you're not familiar with the prices, how come you're so sure? You can see a graph here for Norwegian prices. They peaked in 2007 and have been going down since. In 2008 the rate of decline was at 8% p.a. Switzerland is doing well now but this compensates for several poor years in the 90s; see graph here. Germany has been negative in real terms for almost 20 years -- see graph here.

 

[BlahBlah]

Do you know what tanking is?

 

[mini]

I don't see any tanking in Norway. In fact, it's seem you can still get very good returns on your 10 year investment.

If you bought at 40 in '95 & sell it for 110 today, that's quite good. Or am I missing something?

 

[bigbadwolf]

Do you know what tanking is?

The dictionary definition:

Slang. to do poorly or decline rapidly; fail: The movie tanked at the box office.

I repeat: How can you be so sure when you don't have the facts and figures at your disposal?

 

[bigbadwolf]

I don't see any tanking in Norway. In fact, it's seem you can still get very good returns on your 10 year investment.

If you bought at 40 in '95 & sell it for 110 today, that's quite good. Or am I missing something?

You are missing very basic things. The same holds for the British and American property markets. That doesn't mean prices have not taken a sharp nosedive in the last two years. And why stop at '95 if you want to make this type of argument? A bit arbitrary. You could use '85, '75, or even '65. This is the kind of argument used by fund managers: our fund has increased in value 135% in the last ten years. This is a meretricious argument. What matters for financial decisions is what's happening now and what's been happening in the recent past. You may have bought a property for $5,000 fifty years ago. But with regard to a decision to keep it or sell it, you will look not at the appreciation in value over that period but what's been happening in the last one year and what your prognosis is for the next year or two.

Rising real estate prices (in real terms) involve a transfer of wealth from one group to another. In the long run such real increases (not nominal increases) tend to lead to asset bubbles and are unsustainable. I've seen two already in the UK -- one in the mid '80s and one lasting a little over a decade from 1996 to 2007. Likewise in the USA. Any time there is a steady real increase in property prices, either it follows a long period of decline and stagnation, or there is an asset value puncture ahead of it (or both).

A major chunk of the reason why rising real property prices must ultimately lead to decline and stagnation is that the rise itself depends on a new generation of suckers to be buying in at the bottom level. A kind of pyramid scheme, loosely speaking. When young people either cannot not borrow enough or cannot service the loans, when young married couple are borrowing five times joint earnings in the UK for a tiny maisonette, when people like new teachers, policemen, firefighters, social workers cannot afford to buy a property (and concomitantly even find rents beyond their means), then the writing's on the wall.

 

[BlahBlah]

The dictionary definition:



I repeat: How can you be so sure when you don't have the facts and figures at your disposal?

How do you know what I do know?

This just patetic!!!!!