Cyprus-Forum.com

[Johnson&Johnson]

Pantheman, Z4

In response to your question 'what do you suppose we do Mr doom and gloom?'

1) DO NOT BUY ANY PROPERY NOW. prices will fall, and fall big.

2) Stay OUT of property and property related businesses for the next 5-7 years. now i know pantheman is an estate agent and has been trying hard to convince himself that all is rosy, and fair do to the guy i am sure he has got a family to feed. but there are a million small-fry estate agents on the island, all trying to flog their overpriced fantasyland properties, and most of them will crimp when the crash gathers pace.

3) Reduce your consumption. pay down your debts. save money. get rid of that gas guzzling BMW or SUV you like to show off in and buy a toyota. oh, and teach your kids the value of things.

4) understand that you cannot run a healthy economy by selling overpriced houses to one another and getting further and further into debt to do so. it doesn work.

I am not a doom merchant, simply a realist. it is the job of the estate agents and developers to sucker fools into buying overpriced cyprus properties, so of course they will kick and scream and try to shout down my arguments

but it is a glaring fact that prices are unrealistic and unsustainable.

This crash is going to be a big one and it is going to take down a lot of people. we may even enter a japanses-style deflationist depression.

Yes values will recover, but not before prices come back down to a realistic level and reach some kind of historical norm (e.g in the UK this would be 3 or 3.5 times earnings)

I repeat, 10.5% down in 7 months is a massive drop. that's 18% annualized. bigger, harder and faster falls than the last crash during the 90's.

hold onto your hats,

[Johnson&Johnson]

pantheman

you are wrong also in your assumption that property moves in 10 year cycles - there is a good case for 18 year cycles, although nothing is proven.

check fred harrison's book 'boom, bust, house prices and the depression on 2010' - well woth the money

[Z4]

Pantheman, Z4

In response to your question 'what do you suppose we do Mr doom and gloom?'

1) DO NOT BUY ANY PROPERY NOW. prices will fall, and fall big.

2) Stay OUT of property and property related businesses for the next 5-7 years. now i know pantheman is an estate agent and has been trying hard to convince himself that all is rosy, and fair do to the guy i am sure he has got a family to feed. but there are a million small-fry estate agents on the island, all trying to flog their overpriced fantasyland properties, and most of them will crimp when the crash gathers pace.

3) Reduce your consumption. pay down your debts. save money. get rid of that gas guzzling BMW or SUV you like to show off in and buy a toyota. oh, and teach your kids the value of things.

4) understand that you cannot run a healthy economy by selling overpriced houses to one another and getting further and further into debt to do so. it doesn work.

I am not a doom merchant, simply a realist. it is the job of the estate agents and developers to sucker fools into buying overpriced cyprus properties, so of course they will kick and scream and try to shout down my arguments

but it is a glaring fact that prices are unrealistic and unsustainable.

This crash is going to be a big one and it is going to take down a lot of people. we may even enter a japanses-style deflationist depression.

Yes values will recover, but not before prices come back down to a realistic level and reach some kind of historical norm (e.g in the UK this would be 3 or 3.5 times earnings)

I repeat, 10.5% down in 7 months is a massive drop. that's 18% annualized. bigger, harder and faster falls than the last crash during the 90's.

hold onto your hats,

J&J

I hear what your saying but this is life I'm affraid and we can't stay still, we have to move on with the times. Buying a property now is fine, but just do your research. You are not going to make as much profit as people did 10 years ago.

If you can't afford to sell now, don't . Keep paying your mortgage off and in a few years time you will of paid more off the loan and the price of your property will increase, ok maybe only fractionaly.

Take a chill pill mate, there is nothing you and I can do so it's really not worth worrying about. You are right, if we all sensible with our finances it should be ok. Yeah things are not great, they are far from it. But this is life!

Sound advice about staying out of property related businesses. I think about 3-5 years things should be better for these guys. But if you think about it though there are many property related businesses which will be effected and you probably don't realise. I passed a shop selling carpets this morning and thought this may be effecting them . There is a large distributor off wooden floorings/stairs etc near me which has recently laid off 40 staff.

Still enjoy driving my petrol guzzler - you need something in life to enjoy!!!

[Johnson&Johnson]

z4

perhaps you misunderstand me

i am not worried and i do not need to take a chill pill

if anything i am very excited as i am looking forward to purchasing some (more) knock-down properties within the next few years

those in property related businesses and those with large debts are the ones who should be worried. i fall into neither category.

[Z4]

z4

perhaps you misunderstand me

i am not worried and i do not need to take a chill pill

if anything i am very excited as i am looking forward to purchasing some (more) knock-down properties within the next few years

those in property related businesses and those with large debts are the ones who should be worried. i fall into neither category.

Making money from other people's missery?

[Nikitas]

Is that not how most people make money surpluses? From the misfortune of others or the "utilisation" of natural resources which should be common property? Quintessential capitalism is the stock exchange where one man's loss is another's gain, literally.

The cases where money is made out of sheer creativity are very few.

[roseandchan]

if you know the area, there are bargins to be had. the flat we are trying to buy is 25% down on what they paid for it 2 years ago. i know loads of people who purchased property in the last crash, they all made loads of money a few years later. except for people who purchased in lincoln. look at the rental return you could get against the purchase price that will tell you if a buy to let investor would pay that for it. if they would then it should be a safe bet.

[Johnson&Johnson]

Making money from other people's missery?

if you live a lifestyle beyond your means, and fund it through debt, then you deserve to go bankrupt. i have no sympathy at all.

[Z4]

Making money from other people's missery?

if you live a lifestyle beyond your means, and fund it through debt, then you deserve to go bankrupt. i have no sympathy at all.

Fair enough, you are right (for once )

[Kikapu]

Just to add on what Johnson&Johnson is saying, which I agree with him totally by the way. On one of the treads, I predicted that property prices will need to drop as much as between 30%-50% before any kind of stability can take hold. Why, is because salaries has not been kept up with inflation for the most part over the last 10-15 years, and secondly, majority of first time home buyers would have been shut out of the market long time ago, because they could not afford the prices of homes back then, 6-8 years ago, hence the fact, many ingenious mortgages were invented, starting with Interest only, also partial interest and the remainder added onto the principle, which makes your original loan grow larger and larger with each passing year. Then the low interest teaser loans that was bearable affordable in the first 2 years, before it would shoot above the normal prime rate, and as more people tried to get "free money" the price of property kept on going up and up, because of the "free money" that was given out and creative methods to get the "victims" through the real estate agents doors to commit them with their "white elephant" homes.

These times of housing market correction is not as same as all the previous corrections. This is not a correction. It is a crash. The house of cards has finally starting to fall off one by one. Call it the PERFECT STORM if you like, because that's what it is, because the financial institutes have lost a great deal in giving out "free money", and if we go back to house prices of 10 years ago, we are back to square one, which means, as JJ stated, loans can only be given out at 3 to 3.5 times the salary earned, which means, even 50% drop in home prices will not be enough for most, if they do not have sufficient cash to put down as a down payment to get the loan from the bank for the reminder. This is not even taking into an account that global economy will slow in years to come in many fundamentals of the economy, specially manufacturing, with massive lay offs as well as civil servant jobs, since fewer tax dollars will be collected, further putting pressure on home prices and their being affordable to average people. Then there will be those who will just walk away from their homes than pay more than it is worth, which will further bring the home prices down.

These are some of the things we know right now. Lets not even think of any surprises that we are not aware of at the moment, that will make matter worse. We should look for a long and steady downward slide back to earth, from living up in the clouds for the last 10 years or so. I think the lack of oxygen at such heights clouded our vision for a long time, but now, reality is once again on the horizon to live within our means, because one's property is no longer going to be used as "ATM" machine to get cash out every time the equity in the property rose. The party is finally over in some countries like the USA, Spain and the UK. Those who believe that the housing downturn it will not go any further than those countries and hit them where they live, then I have an Ocean Front Property for sale in Arizona for them at bargain prices.!!