Friday, 11 November 2011
A house is a home not an 'investment'
It is a shame that it is those who don't deserve to that are usually those that suffer. The housing market is a case in point. Those who got onto the housing ladder in 2006/7 when the housing market peaked are now in grief because prices are down some 20%. Others see their chance of owning a home receding. It is the word 'home' that matters. For decades ones 'home' was also seen as a safe route to ever increasing wealth. This delusion was fueled by oceans of credit. I sold a house in 1985 which was sold again in 2005 for eight times what I got for it. Meanwhile the average income had slightly more than doubled. That madness was bound to stop sometime and it has.Transactions are down some 50% from a peak of 1.25million and likewise the number of estate agents has halved. To get some sort of balance back prices need to fall further. Predictions are 3% this year, 5% next year & 5% in 2013. Cruel luck -except of course for those who can afford a property costing millions where the market is still buoyant.