How did I become so middle class? I read stories about house prices and I just bought a slow cooker.
Reflecting on the price rise predictions I realise I owe an enormous debt of gratitude to Bernard Hickey. At the end of last year Hickey was ubiquitous in the media, frantically warning people get out of the property market because values were going to fall by 30% and not recover for another ten years:
It is a debt death spiral that can only stop when asset values stop falling or capital has been replenished with enough cash. Essentially, this is the de-leveraging tsunami that sucks debt out of the property market and then destroys the value of that property.
So following the ‘always do the opposite of what Time Magazine recommends‘ principle I figured it would be a good time to buy. There were a lot of houses for sale, almost all of them belonging to panicked property investors and virtually nobody was buying – because by this stage everyone ‘knew’ prices were going to fall by another 30%. We got our place for about 15% below GV, six months on similar houses in our neighbourhood seem to be going for about 5% over GV.
I see Bernard Hickey has recently walked back from his dire predictions but I’m incredibly grateful to him for making them, the poor guy who sold me my house (a professional fund manager, natch) probably less so. The slow-cooker now occupies a place of pride in my new kitchen. I’m making coq au vin this weekend.
The new place isn’t perfect – there’s no insulation – and it seems impossible that I haven’t blogged about heating or insulation yet since in the real world it’s all I’ve been able to talk about for several months now. So at some stage I’ll have to write up a long, intensely boring spiel about insulation materials and energy efficient heating.