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Manfor - why do you think it would test the 2008 lows?
Do you understand how vastly different the situation is for the large home builders from 2008 compared to now? Their land bank, cash in bank, forward sales, margins and total ability to stay afloat?
Because a huge economic crash will unfold over the next few years because of rising interest rates and the housing market will be at the centre of it. All of the forward sales and margins and cash will disappear over the next few years and housebuilders may struggle just to stay afloat.
Remember the banks in 2007? RBS and all the others were making record profits, and then within two years their shares had fallen by over 90%. The same thing is likely to happen to housebuilders. The housing market will basically collapse with UK interest rates at 6% and above, and there will also probably be large rights issues from the housebuilders within the next few years.
So that is why I expect housebuilders to test the 2008 lows, and for Persimmon that is about £3.
“Whats your price target? I'm tempted at this price for a SIPP play with cash I can't touch for 20 years anyway.”
I have posted previously that UK Housebuilders will probably test their 2008 lows, and so you should wait for an entry price for Persimmon of about £3.
This should probably happen some time next year when UK interest rates are eventually raised to about 6% or higher. This level of interest rates will completely crush the UK housing market and UK house prices.
Don’t try to catch a falling knife !
It will not mean much what their profit is if Credit Suisse collapses.
RBS was making huge profits before the 2008 Financial crisis. The share price then went from £7 to 10p.
strictlybricks,
I hear what you are saying but it sounds a little bit like one of those “it’s different this time” arguments for always being bullish on the stock market or on a particular share.
The main problem, apart from the UK housing cycle now turning down, is the S&P is vastly overvalued according to almost every metric, and when the S&P bubble bursts it is going to bring everything down with it including all of the FTSE 100 and 250 companies.
And when all of the stock markets have lost another 50%, UK interest rates are at about 5%, the credit and derivatives markets are exploding, etc etc etc, where do you think housebuilders shares will be? All of the figures that you are quoting now for strong balance sheets will simply be blown away.
But you may be right of course. This time when the housing cycle reaches the bottom it may be different.
So what do you think are the best value housebuilders at present, and what is your expected low price for them in the next five years?
And you say you only invest in housebuilders? So how did your housebuilder shares perform in 2008? Did your portfolio value not collapse?
A shortage of property will do nothing to stop a UK housing crash.
As the man says, it is all about price, and the price of houses in the UK is absurd.
https://davidmcwilliams.ie/people-think-because-theres-a-shortage-of-property-we-will-not-have-a-property-slump-theyre-wrong/
I remember what happened in the 2008 crash and so I know what can happen when the housing cycle turns. The top of the housing cycle has clearly been reached now.
I think that housebuilders profits will collapse over the next five years, and any dividends will be greatly reduced or stopped completely. When the UK housing cycle has reached the bottom in about five years, I would be quite interested in buying housebuilders.
My entry price target for Barratt is 80p.
I remember what happened in the 2008 crash and so I know what can happen when the housing cycle turns. The top of the housing cycle has clearly been reached now.
I think that housebuilders profits will collapse over the next five years, and any dividends will be greatly reduced or stopped completely. When the UK housing cycle has reached the bottom in about five years, I would be quite interested in buying housebuilders.
My entry price target for Redrow is the 2008 low of just below £1.
I do not hold any housebuilders now but I do remember what happened in 2008 and so I know what can happen when the housing cycle turns. The top of the housing cycle has clearly been reached now.
I still think that housebuilders profits will collapse over the next five years, and any dividends will be greatly reduced or stopped completely. When the UK housing cycle has reached the bottom in about five years, I would be quite interested in buying housebuilders.
My entry price target for Persimmon is the 2008 low of just below £3.
I do not hold any housebuilders now but I do remember what happened in 2008 and so I know what can happen when the housing cycle turns. The top of the housing cycle has clearly been reached now.
I am sure that I am as well informed as the other posters here. I was also not aware that the discussion here was only for people who think housebuilder shares are going to rise. Where does it say this?
I still think that housebuilders profits will collapse over the next five years, and any dividends will be greatly reduced or stopped completely. When the UK housing cycle has reached the bottom in about five years, I would be quite interested in buying housebuilders.
My entry price target for Bellway is the 2008 low of £4.
All the UK housebuilders are a value trap. Why do you think the institutions are not buying at these levels. They know it is a value trap.
House prices are already collapsing in the US and Australia, and UK house prices will not be far behind.
At the end of the housing cycle, the UK housebuilders will only be making losses and there will be no dividends.
The high dividends on the housebuilders will not last for long.
When the housing cycle starts to fall next year, housebuilder profits will fall and dividends will be greatly reduced or even stopped.
The high dividends on the housebuilders will not last for long.
When the housing cycle starts to fall next year, housebuilder profits will fall and dividends will be greatly reduced or even stopped.
The high dividends on the housebuilders will not last for long.
When the housing cycle starts to fall next year, housebuilder profits will fall and dividends will be greatly reduced or even stopped.
Housebuilders fell by about 90% in the last crash, and so it would not be very surprising to see the same thing happen again since the economic situation now looks even worse than in 2008.
So if the same cycle happens again, Barratt shares could fall to about 40p.
Housebuilders fell by about 90% in the last crash, and so it would not be very surprising to see the same thing happen again since the economic situation now looks even worse than in 2008.
So if the same cycle happens again, Persimmon shares could fall to about £3.