I am renting, which is not for financial reasons just due to my situation. I dont have this need to own where i live, not yet anyway, i will one day but I dont want that now.
I have enough cash on me that if i purchased a house (thats bigger than what i am renting as i will want something decent then) the amount i would borrow with it even at 10% interest would be far less than what it costs me to rent.
at the risk of sounding arrogant, which I am not trying to do, I am just trying to illustrate to you i am in a position where financially it makes no difference to me if i rent of buy. there is no need for me to act one way or another.
as such i am not biased for one side of the argument to win out over the other, there is no vested interest for me. i am just looking at the logic of how it all works and what the limits are that it can work it.
no crystal ball is needed here, a mortgage consumes nearly all peoples wage now, so mortgages cant get bigger, as such house's cant be sold for more.
you are right they been talking about a crash for a while, and this is why. look at the data i posted the other day and graph it.
you will see housing normally booms for about 7 years surging 60% in value then falls, booms for another 7 years then falls.
around 2000 it was historicly time for the next fall,instead it surged for another 7 years totalling 14 years and 120% increase over all and has slowed off since around 2007, this is all ahead of inflation which you can see if you graph it... so combined with reaching the maximum price housing can get to with peoples wages the only way forward is accross or down, or both, but never up as its imposible. it cant go up without another fall first.
so historiclly 7 years boom at 60% then 20% fall this time around we had 14 years boom and 120% increase in value.. does that mean 40% fall is due?
housing has doubled in 10 years 40% fall would still be profitable to builders.. builders will sell house's at what ever is profitable and what they can turn them over at.
I can only see great risk investing in property, and little to no reward at this point of time in the cycle.
