What happened to the property market after the '87 crash? Did it initially slump as investors sold in order to make margin calls? When it recovered, did it recover with a vengeance as investors burnt in the sharemarket flocked to the perceived safety of bricks and mortar in droves? Anyone have any anecdotes or stats to share?
Stock market crashes - what happens to property?
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wayneL
VIVA LA LIBERTAD, CARAJO!
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Chart,
My opinion is that the economic clock is so FUBAR that historics references in this regard are not applicable at the moment, cause by printing presses working overtime. The property market is still way too many sigma away from the mean on almost any measure you care to look at, for a new boom to be precipitated by a bear stock market.
The recent comments from the governor of the Bank of England are starkly illustrative of this and I have paraphrased his comments above.
The way forward does not look very palatable for most people.
My opinion is that the economic clock is so FUBAR that historics references in this regard are not applicable at the moment, cause by printing presses working overtime. The property market is still way too many sigma away from the mean on almost any measure you care to look at, for a new boom to be precipitated by a bear stock market.
The recent comments from the governor of the Bank of England are starkly illustrative of this and I have paraphrased his comments above.
The way forward does not look very palatable for most people.
charttv said:
Property spiked in the two years following, then went into a prolonged slump.
I somehow doubt that anyone sold their house to meet a margin call. Margin calls have to be met the same day and I think it would be difficult to complete the process of marketing, exchanging contracts, conveyancing, and settlement in one day.
cheers,
Chemist
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hi charttv
Back in '87 mortgage rates were around 17% and from memory it was in H2 '87 that mortgage rates began to drop slowly and so property prices, in Melbourne at least, kept rising and the rest is history as they say.....
I think that if we went into a bear market now for whatever reason it would help the residential property market much more than the commercial property market.
cheers
bullmarket
Back in '87 mortgage rates were around 17% and from memory it was in H2 '87 that mortgage rates began to drop slowly and so property prices, in Melbourne at least, kept rising and the rest is history as they say.....
I think that if we went into a bear market now for whatever reason it would help the residential property market much more than the commercial property market.
cheers
bullmarket
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