Iām not talking about the house prices today I was referring to the constant uptrend for the housing market since records began, that is the truth of it. When have house prices fallen for a decade? Never but commodities do.
You have a valid point although is the growth rate sustainable.
I donāt know ask all the people that havenāt had wage increases in line with house price changes.
Average house prices are currently 7.6 X the annual salary, official figures show that the average price paid for a home jumped 259% between 1997 and 2016 while earnings rose a measly 68% by comparison. In 1997, house prices were typically around 3.6 X workersā annual gross full-time earnings
1 Like
The only people capable of stopping the residential market growth is the government via councils, if they had a post war attitude and built council houses āwithout profitā and began subsidising the rental market again house prices would level out and potentially fall.
This is the only scenario in my opinion that is capable, or a vast percentage of our population gets wiped out. Otherwise house prices will continue to rise, with the current pandemic people will value home ownership imo over and above everything else for atleast another generation.
1 Like
But surely if house prices keep rising beyond 7.6x salary it will just get to a point where people canāt buy. They will either rent or stay with extended family and house prices will fall or like you say councils will intervene.
My youngest daughter rented a house from a private owner, when she moved in she got letters from Gas, Electric and a few others, they were addressed to the previous tenant who had done a runner.
She later left that property and rented another house from a housing agency, they owned the block where this house was, again she got letters demanding money addressed to the previous tenant.
She now is renting a house in another area, but funny enough she got a few letters again for money owing from the previous tenant.
She canāt afford to buy because the rent is so high she canāt save any money, so unless she wins the lottery she will always be stuck renting, so the only people buying from what I can make out is people who are working and on a decent wage or people with money who buy to rent and housing associations.
2 Likes
Iām sure they said the same about precious metals but that didnāt work out either.
With so many now owning 2nd homes and multiple buy to letās the market doesnāt need everyone to be able to buy thats the underlying problem.
Plus will house prices come down, as Iāve said competition and margins. Have you seen some of the robots theyāre developing that can build on mass. Yes early days, but this will create standards, reduce costs and all the dodgey snag lists you get with every āpooā build you buy. Construction of course wonāt be fully autonomous but there is big room for it in areas.
Rich property tycoons take additional profit through reduced costs they donāt hand it back
As Lenos says, arguably a reason to be bullish on big developers as that will likely increase profit, like with land they currently bank up, They only build to make certain profit, if not at that point they simply dont build.
Possibly, I will still avoid, construction has a terrible track record in recessions. Look at all the firmās going bust in China which is in a much better state than our economy and about 6 months ahead of us in terms of Covid.
One of things I canāt understand is building offices, the amount Iāve seen with with signs saying āOffice Spaces Availableā etc.
This was before the pandemic so it must be even harder to fill them now, it was mentioned above about converting them for housing but a lot are in industrial areas so not really a nice place to live unless they a very cheap to rent.
Yes I would avoid companies who build offices or own them, mostly its funds or financial companies right? The housing stocks like TW, Persimmon, Redrow, Barratt etc have limited or no exposure to offices as far as I have seen.
What housing stocks do people think are the best buys right now? (after the recent vaccine surge)
1 Like
Colin the amount of new builds on brownfield sites near industrial estates Iāve seen is unreal yet people flock to pay 400k for them lmao. Iād rather live in a gypsy camp.
1 Like
Offices are by far cheaper to build run and maintain, they are also easier to get planning permission for.
Anyone worried about companies going under should just check the bottom line and company trading time.
I thought the NHS was going broke this year? Its amazing how the need of the people changes everyones perception and we need houses/flats like never before
Anyone got an thoughts on when they think this surge will end or what targets to look at. I am wanting to add more but not sure if this is a temporary little pop with housing stocks and it will pull back hard too in coming months. I am not complaining with the amount of % im up but just wanting to add more without bringing my average up massively if its gonna pull back hard.
1 Like
I donāt see a downside for the residential building industry for quite some time, just look at the investors flying into builders merchants. Commercial is another story entirely that will depend on what the government puts up as incentives to get the market going again
Yep I agree I am in house builders that what I mean about housing not commercial stuff. Redrow as it currently sits I feel has upside growth wise and its a 5%+ yield, TW difficult to know how much upside growth but once dividend reinstated in 2021 (special in 2022) that could mean potential 10% dividend yield based on current prices (160p a share).
1 Like
Not housing but Warehouse REITs will be pretty popular in a yearās time since you need those to house Amazon/Supermarket etc commodities, Food and Materials once Brexit is done.
1 Like
Taylor Wimpey looking at a decent price for entry/adding.