Cambon Posted March 20, 2007 Share Posted March 20, 2007 Slim, If the buyers were controlling the prices of houses the prices would be a lot lower. I'm not repeating myself again, it's clear you're simply not capable of understanding this fairly simple point. And your reply to Roger Smelly shows you do not understand the economics of supply and demand. Roger's £120,000 houses would temporarily solve the problem because it would lower the prices of all houses, not just those £120,000. Economics is not always about making money, it is also about making decisions that are beneficial to the masses. Link to comment Share on other sites More sharing options...
Slim Posted March 20, 2007 Share Posted March 20, 2007 And your reply to Roger Smelly shows you do not understand the economics of supply and demand. I understand perfectly thanks. It's clear you didn't from your reply however: Roger's £120,000 houses would temporarily solve the problem because it would lower the prices of all houses, not just those £120,000. Economics is not always about making money, it is also about making decisions that are beneficial to the masses. He wasn't talking about lowering prices, he was talking about 'making a killing' and making the most money. You've just contradicted yourself 100%. Link to comment Share on other sites More sharing options...
Cambon Posted March 20, 2007 Share Posted March 20, 2007 He wasn't talking about lowering prices, he was talking about 'making a killing' and making the most money. You've just contradicted yourself 100%. I was talking about it being a seller's market and how it could be turned around to the benefit of the people rather than the greedy. No contradiction at all. You obviously have forgotten what we are debating. Link to comment Share on other sites More sharing options...
Slim Posted March 20, 2007 Share Posted March 20, 2007 I was talking about it being a seller's market and how it could be turned around to the benefit of the people rather than the greedy. No contradiction at all. You obviously have forgotten what we are debating. You accused me of not understanding economics from my reply to Roger. Roger wasn't talking about lowering prices or creating a buyers market, he was talking about someone making money. I haven't forgotten what I was debating with you, but Roger was talking about something entirely different. What is it about my reply to Roger shows I don't understand Supply and Demand? Link to comment Share on other sites More sharing options...
BigDave Posted March 20, 2007 Share Posted March 20, 2007 If the buyers were controlling the prices of houses the prices would be a lot lower Oh good god. What Slim is trying to communicate when he says "buyers set the market price" is this basic and universally understood principle of business: You cannot sell an item for a price exceeding that which a buyer will accept or can afford. If I decide to sell my house for £190k, this descision will be based entirely on what I can expect to get for it. I would like to ask for £500k, but I know I will not get this, so I set my price to the maximum that I think someone will pay. The buyer has set the price, not because they have demanded it to be this, but because I know they will not pay any more. I know there are people who want my house but can only afford £120k but equally I know that there are people willing and able to pay £190k. It is not all the potential buyers who set my price, but the one whom I expect to buy my house. Like your earlier example with the Mini. If people were willing to pay £100k for a mini, the price would be 100k, but this is unrealistic so they set the price at one which the buyers can afford in sufficiant numbers to shift their stock. The sellers have control over the asking price and can choose to accept or reject any offer - but this does not mean they are in control. All it means is that they are within the price set by the buyers. If they ask too high they will have no offers and will lower their price. The maximum price advised by an estate agent is one which they expect from their extensive research and close monitoring of the property market that the wealthiest buyers can afford. You can set a high price and attempt to get buyers to try to meet this, which is what you are saying is the sellers setting the price, but they can only do that up to a certain limit - it is this limit at which the buyers in the market set the price, as no buyers will go higher than this limit. Link to comment Share on other sites More sharing options...
Sparky Posted March 20, 2007 Share Posted March 20, 2007 I think to a certain extent that the IOM sped ahead of a lot of UK areas for a number of years, but now the UK has caught up and the IOM is sort of trading water in property price increases. I know that 7 or 8 years ago, my parent's 30s 3-bed semi in Somerset was probably only worth about 2/3 of the IOM price, but is now pretty much on a par. hear! hear! Property prices are very much on a par now when you compare like with like. The only exception is if you buy a terraced house, of which there are not as many (%age wise) as there are in the UK where this property tends to be cheaper. Link to comment Share on other sites More sharing options...
Roger Smelly Posted March 20, 2007 Share Posted March 20, 2007 Actually what i meant was that if someone wanted to, they could basically tip the manx property market just by selling every house cheap. If you look at the way the labour market is going on the island and the way hourly rates are actually dropping due to polish etc workers the same could happen on the property market. All it takes is a clever developer to drop the prices and every house will drop. The Developers are setting the prices nobody else because estate agents are comparing like for like. Link to comment Share on other sites More sharing options...
Slim Posted March 20, 2007 Share Posted March 20, 2007 Actually what i meant was that if someone wanted to, they could basically tip the manx property market just by selling every house cheap. You clearly didn't say that at all. All it takes is a clever developer to drop the prices and every house will drop. Explain to me how it's clever to reduce the value of your product. The Developers are setting the prices nobody else because estate agents are comparing like for like. No, the buyers are setting the prices. If theres no buyer for a house at the price its offered, the price must be lowered for it to sell. Link to comment Share on other sites More sharing options...
Roger Smelly Posted March 21, 2007 Share Posted March 21, 2007 Slim i agree with you that the buyer basically set's the price but the seller has to agree also. As for lowering the price of new build property's its very simple its called "sales" Basically what developers do in the UK and else where is once the market slow's and there sales slow they then start to drop there prices to gain maximum sales. The trouble on the island is you have 2 or 3 large developers who are having regular meetings together to keep the prices high. Once the sales start to tail off you will see a price war start. You are not being told that they are only selling two thiirds of the stock and renting the rest out. If they sold everything the prices would fall. The best thing would be if government stopped the grants for a few years. You can get £25.000 grant with a top up of £30.000 if you are after a new property. Thats madness Link to comment Share on other sites More sharing options...
Slim Posted March 21, 2007 Share Posted March 21, 2007 As for lowering the price of new build property's its very simple its called "sales"Basically what developers do in the UK and else where is once the market slow's and there sales slow they then start to drop there prices to gain maximum sales. Sure, but there aren't slow sales. Supply is constrained, why would anyone want to lower their price, when stuffs selling just fine at a high price. The trouble on the island is you have 2 or 3 large developers who are having regular meetings together to keep the prices high. Paranoid bullshit. The developers do not account for the whole property market. The bulk of sales are private sales. How are the developers controlling those prices in their TOP SEKRET MEEETINS! The best thing would be if government stopped the grants for a few years. You can get £25.000 grant with a top up of £30.000 if you are after a new property. Thats madness As this threat suggests, those grants are so difficult to obtain, I doubt they have any influence at all over the market. Link to comment Share on other sites More sharing options...
rallybug Posted March 21, 2007 Share Posted March 21, 2007 hear! hear! Property prices are very much on a par now when you compare like with like. The only exception is if you buy a terraced house, of which there are not as many (%age wise) as there are in the UK where this property tends to be cheaper. I'd say that the biggest stock missing from the Isle of Man compared to England is 30s semis and the like - there was a building boom in Victorian and Georgian periods evidenced by the number of terraced houses, and then what appear to be 50s onwards buildings, but not much in the way of late 20s and 30s semis and detached. Link to comment Share on other sites More sharing options...
Slim Posted March 21, 2007 Share Posted March 21, 2007 I just bought one, and I almost wish I hadn't Link to comment Share on other sites More sharing options...
Cambon Posted March 21, 2007 Share Posted March 21, 2007 But you'd sell all your 3 bed semi's at £185k so why on earth would you want to sell them at £120? But there's buyers who can also afford to pay higher. Huh? Selling something cheap that you can get more money for isn't the best way to make money. Sure, but there aren't slow sales. Supply is constrained, why would anyone want to lower their price, when stuffs selling just fine at a high price. All perfect examples of why we are in a sellers market. Do buyer's dictate the price? No. The market does, lead by the sellers. If you cannot afford it, someone else will. Link to comment Share on other sites More sharing options...
Slim Posted March 21, 2007 Share Posted March 21, 2007 And if no buyer can afford it, the price drops. Price is set by the buyers. Link to comment Share on other sites More sharing options...
Cambon Posted March 21, 2007 Share Posted March 21, 2007 You can get £25.000 grant with a top up of £30.000 if you are after a new property. Yep, I know an unmarried couple who did this a couple of years ago with absolutely no problem. Funny how the house cost almost £55K over what they could afford without the grant and top up. Link to comment Share on other sites More sharing options...
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