Are prices due to crash?

[WelshGas]

You've made some valid points that I agree with but you haven't necessarily referenced the target market for new Californias I don't think. What kind of person is spending £75K on a Cali instead of £55k on a conversion. What type of person is spending an extra £20K to get something just as good but with a VW badge?
I would argue that the answer is an older wealthy person, someone who is not necessarily affected by the cost of living crisis, Putin's awful, awful invasion or other global factors. As such their purchase is a lifestyle choice, not an economic one.
This generation who have the money to spend, are more likely to know what they want and buy it regardless, before their knees give way.
The prices may fall, but not necessarily for Calis alone. It will start at the bottom of the price bracket I think and work its way up!

Very few people are probably spending £75k cash on a California. In line with most new auto sales they maybe using PCPs to finance the deal especially if they are not embracing the lifestyle wholeheartedly and using it as a stop gap until normality returns.

 

[Kayleigh]

The prices may fall, but not necessarily for Calis alone. It will start at the bottom of the price bracket I think and work its way up!

That’s exactly how a house price correction would work as well. I totally agree with your logic.

 

[willwander]

That’s exactly how a house price correction would work as well. I totally agree with your logic.

I’ve literally just bought a new house.
So a huge house price crash within the next few months is virtually guaranteed

 

[The Tall Luthier]

Very few people are probably spending £75k cash on a California. In line with most new auto sales they maybe using PCPs to finance the deal especially if they are not embracing the lifestyle wholeheartedly and using it as a stop gap until normality returns.

This is true, how it is financed isn't very important though. Credit is so cheap historically, that only seriously wealthy people would buy for cash as it isn't worth them losing cash liquidity. Would Stop-Gappers be buying nearly new at the top of the market?
That would feel quite risky to me, I'm not sure that that demographic are the people keeping prices where they are.
However to the point, they may be the ones keeping 5-10 year old model prices high, if they leave the market, new prices will fall accordingly.

 

[WelshGas]

This is true, how it is financed isn't very important though. Credit is so cheap historically, that only seriously wealthy people would buy for cash as it isn't worth them losing cash liquidity. Would Stop-Gappers be buying nearly new at the top of the market?
That would feel quite risky to me, I'm not sure that that demographic are the people keeping prices where they are.
However to the point, they may be the ones keeping 5-10 year old model prices high, if they leave the market, new prices will fall accordingly.

Aah, that is the point. If you have the cash reserves to buy outright you can make a considered decision to use finance or cash, whichever is the best financially for you.
Far too often however many vehicles are bought on PCP, where the monthly payments may be affordable but there are no cash reserves for an outright purchase. As yet, such PCP deals are not widely available on 2nd hand vehicles and you have to rely on Bank Loans or Mortgage extensions.

 

[Kayleigh]

I’ve literally just bought a new house.
So a huge house price crash within the next few months is virtually guaranteed

Well people have been calling the top of the housing market since 2000, and it hasn’t really happened apart from a blip in 2008, which was just after I bought my current house!

 

[Ch1pbutty]

Well people have been calling the top of the housing market since 2000, and it hasn’t really happened apart from a blip in 2008, which was just after I bought my current house!

View attachment 92287

Very few properties on the market. You can't even view a property in our area until yours is under offer..as we found out when searching for properties for the in-laws who are relocating. Majority selling within 7 days for more than the asking price. (Handful falling through after the survey.)

Many are choosing to extend what they have instead, but even then you are are looking at 12month lead time for a decent builder.

New housing developments are popping up on every spare patch of land & selling very quickly. Developers are also targeting houses with larger plots and offering owners current value +10% to sell up in order purchase and then squeeze another house on the plot.

Demand for housing is still very strong.

 

[Niborn]

Very few properties on the market. You can't even view a property in our area until yours is under offer..as we found out when searching for properties for the in-laws who are relocating. Majority selling within 7 days for more than the asking price. (Handful falling through after the survey.)

Many are choosing to extend what they have instead, but even then you are are looking at 12month lead time for a decent builder.

New housing developments are popping up on every spare patch of land & selling very quickly. Developers are also targeting houses with larger plots and offering owners current value +10% to sell up in order purchase and then squeeze another house on the plot.

Demand for housing is still very strong.

Exactly the same situation East Kent, local estate agent has 4 houses for sale in the town , normally 30 to 50.
No sign of any crash , in fact with stock market instability houses are I think a good long term bet .

 

[Niborn]

Just another indicator how strong prices remain for the Calis , in January I used the trade valuation tool, We Value Your Car , just for a reference . Every month since then using the tool the value has increased and it continues to go up. A 10% increase since January. It hardly feels like a crashing market.
Calis are a very useful thing and on top and uniquely an investment both in quality of life and even money, there can't be any other vehicle like them.

 

[Niborn]

Sorry to harp on , but it's got me thinking.
When we came to Kent one could buy a 2 bed terrace for 30 to 40k. Now they are 250 to 300K. At the time we had no mortgage and I was going to buy 10 to rent and my wife talked me out of it...yes I do regret it.
A lot of that increase had been price inflation I saw an interesting chart the other day about real house prices affordability adjusted for both inflation and wages. Relatively the chart suggests are not the most expensive they have been in real terms.
The Calis second hand selling now for 60K odd will seem in 3 or 5 years cheap if we get a few years of strong inflation and wage growth.
I saw the attached when looking at a new LHD Cali for me with the same spec I have.
Wow.

 

[Digger]

A California is an investment - NOT a financial growth investment but a lifestyle and well being investment. If you are concerned about loss then think about the great times and adventures the Cali can provide - priceless. Life is too short!

 

[calibeach76]

Do I care what happens to the price of my Cali? Not really.

I bought it for camping and my cycling adventures and I’m absolutely loving it.

Was it over priced when I bought it (November), yes but my son isn’t getting younger and rather than wait 12 months for a new one, I’d rather make 12 months of memories.

If prices allow me to change it in a couple of years great, if not it will last me a many good years in which I’ll use it to the maximum and enjoy every minute.

This wasn’t a whim purchase, we have camped for years, it was a significant planned upgrade for us. We could afford it so why not (no balloon payment or refinancing, I’m risk adverse and like to know what it will cost to owner)

A Cali is for enjoying, not worrying about what may happen in the future, as recent history tells us we never know what is around corner!

(I’m writing this in the sun on my Cali deckchair watching my son play rugby after already having been too a cycle race meet, his is the Cali life!

 

[calibeach76]

I’ve literally just bought a new house.
So a huge house price crash within the next few months is virtually guaranteed

 

[Elmo3]

Sorry to harp on , but it's got me thinking.
When we came to Kent one could buy a 2 bed terrace for 30 to 40k. Now they are 250 to 300K. At the time we had no mortgage and I was going to buy 10 to rent and my wife talked me out of it...yes I do regret it.
A lot of that increase had been price inflation I saw an interesting chart the other day about real house prices affordability adjusted for both inflation and wages. Relatively the chart suggests are not the most expensive they have been in real terms.
The Calis second hand selling now for 60K odd will seem in 3 or 5 years cheap if we get a few years of strong inflation and wage growth.
I saw the attached when looking at a new LHD Cali for me with the same spec I have.
Wow.

View attachment 92293

We’ve had 13 years of zero interest rate policy and printing like Monopoly money to bail everyone out and drive up asset values as a consequence. 80% of all US dollars in existence were printed between January 2020 and October 2021. The piper is going to want to be paid.

 

[Niborn]

Maybe , although if anyone thinks that Calis are going to drop even 20% I'd like to.meet them and make a bet they won't...

We’ve had 13 years of zero interest rate policy and printing like Monopoly money to bail everyone out and drive up asset values as a consequence. 80% of all US dollars in existence were printed between January 2020 and October 2021. The piper is going to want to be paid.

 

[vwsween]

Maybe , although if anyone thinks that Calis are going to drop even 20% I'd like to.meet them and make a bet they won't...

Well if you refer to new Cali prices then I have to agree, manufacturing costs are only going to rise.
If you refer to secondhand Cali prices in real terms, after allowing for RPI, then thats different, currently those prices are inflated due to exceptional circumstances. I can well imagine a drop of 20% over the next 18 months for the 3 to 8 year old bracket in real terms. We shall see.

 

[Mr T]

Looks like a price crash has happened right here today! It’s also got 19” Palmerston alloys

 

[Niborn]

Well if you refer to new Cali prices then I have to agree, manufacturing costs are only going to rise.
If you refer to secondhand Cali prices in real terms, after allowing for RPI, then thats different, currently those prices are inflated due to exceptional circumstances. I can well imagine a drop of 20% over the next 18 months for the 3 to 8 year old bracket in real terms. We shall see.

If they were cars I'd agree with you, however I think at least half if not more of the Cali value is in the utility of it, the beds , the kitchen etc , if in good condition these just don't depreciate much at all and are benchmarked against the new van cost..we shall see as you say..loads of people have no intention of selling their Cali so I suppose it doesn't matter to them anyway. I wouldn't be selling too if we hadn't moved to France and I didn't have a French wife who refuses to drive it in France, she says its the wrong side of the road..hahaha

 

[Niborn]

Looks like a price crash has happened right here today! It’s also got 19” Palmerston alloys

View attachment 92300

It might be a mistake

 

[Mr T]

It might be a mistake

Price seems to have suddenly been corrected.

 

[vwsween]

If they were cars I'd agree with you, however I think at least half if not more of the Cali value is in the utility of it, the beds , the kitchen etc , if in good condition these just don't depreciate much at all and are benchmarked against the new van cost..we shall see as you say..loads of people have no intention of selling their Cali so I suppose it doesn't matter to them anyway. I wouldn't be selling too if we hadn't moved to France and I didn't have a French wife who refuses to drive it in France, she says its the wrong side of the road..hahaha

What you say is absolutely right for normal times, but its not normal times, the market is distorted. The correction has already started in my opinion.

 

[Kayleigh]

What you say is absolutely right for normal times, but its not normal times, the market is distorted. The correction has already started in my opinion.

Well if it has started I cannot see it. If I were to update my Beach to a 6.1 Camper, there is a choice of precisely one on Autotrader. The cost for this one year old van is 30% more than I paid for a 3 month old Beach a year and a half ago.. and it doesn’t have the extras that ours came with like the parking heater.
Are VW dealers adding fuel to the over-pricing fire?

 

[Seaview]

Well people have been calling the top of the housing market since 2000, and it hasn’t really happened apart from a blip in 2008, which was just after I bought my current house!

View attachment 92287

My neighbour has put his house, almost identical to mine, on the market for over £100k more than what I paid for mine just six months ago !!! He’s had a lot of interest judging by the number of viewers. I will be amazed if he achieves the price but also not surprised as house prices and availability are crazy and unpredictable at the moment.

 

[Elmo3]

My neighbour has put his house, almost identical to mine, on the market for over £100k more than what I paid for mine just six months ago !!! He’s had a lot of interest judging by the number of viewers. I will be amazed if he achieves the price but also not surprised as house prices and availability are crazy and unpredictable at the moment.

Let’s hope they are cash buyers. Lots of bank down valuing going on at the moment. People can get carried away bidding up houses with somebody else’s money.

 

[Niborn]

Well if it has started I cannot see it. If I were to update my Beach to a 6.1 Camper, there is a choice of precisely one on Autotrader. The cost for this one year old van is 30% more than I paid for a 3 month old Beach a year and a half ago.. and it doesn’t have the extras that ours came with like the parking heater.
Are VW dealers adding fuel to the over-pricing fire?
View attachment 92307

That’s crazy for a beach