House Prices Have Been Falling At 10% A Year Since October 2007

[Shepski]

I am new to this Forum and i am a Hedge Fund Manager.

If you take the Halifax Housing Index it peaked in October 2007 so we are approaching the 3 year anniversary of its peak, since then prices are down 16.19% so an average of approximately 5% a year. If you add on RPI inflation at an average of another 4 to 5% a year over the last 3 years. In reality we have prices down close to 30%.

This is because actual falls have only accounted for half the fall, inflation has done the rest. Or put another way the money today in 2010 is worth about 15% less as regards purchasing power than what it was in 2007.

2 caveats here, i find it incredible that we believe any price indexes produced by by two of the largest players in the mortgage market !!!!!! the Halifax who are already surviving only on state welfare and the Nationwide. No vested interests there then. Also the "official" RPI figures are very likely doctored to the down side by 2 or 3%, all government statistics are artificially rosy.

We saw a lot of this coming ( an out of control credit boom that stretched property prices massively above incomes) therefore we predicted the crash which so far is approximately 15% nominal and 15% inflation loss. We understood that the response would basically be panic and default to pure Keynes, and therefore a mountain of money printing. Therefore anything that is more finite than the money printing would increase in value, or correctly be measured in more of the freshly devalued currency.

Which is why we bought a lot of physical Gold and Silver for the very simple reason is more finite than the money printing.

[catmandu]

Why do you think governments stats are artificially rosy? Governments rely on stats to make their policy so it's in their interests to get them right.

[The Masked Tulip]

We have had much, much better gold ramping threads on this site.

[swissy_fit]

I am new to this Forum and i am a Hedge Fund Manager Gold Troll.

Fixed for you.

[JustYield]

Since when could new members start threads with their very first post?

Explanation mods?

[Meat Puppet]

Silver eh? Do you think there is some potential for it as a remonetisation play? Since it was stopped being used as money in the 19th century the silver price has been much more strongly correlated with GDP than gold. I would think that makes it quite risky.

Also what about some of the miners. Once upon a time I had a few thousand shares of Silver Standard Resources as they not only had production potential but hoarded something like 50 million ounces as well.

[Pent Up]

I am new to this Forum and i am a Hedge Fund Manager.

If you take the Halifax Housing Index it peaked in October 2007 so we are approaching the 3 year anniversary of its peak, since then prices are down 16.19% so an average of approximately 5% a year. If you add on RPI inflation at an average of another 4 to 5% a year over the last 3 years. In reality we have prices down close to 30%.

This is because actual falls have only accounted for half the fall, inflation has done the rest. Or put another way the money today in 2010 is worth about 15% less as regards purchasing power than what it was in 2007.

2 caveats here, i find it incredible that we believe any price indexes produced by by two of the largest players in the mortgage market !!!!!! the Halifax who are already surviving only on state welfare and the Nationwide. No vested interests there then. Also the "official" RPI figures are very likely doctored to the down side by 2 or 3%, all government statistics are artificially rosy.

We saw a lot of this coming ( an out of control credit boom that stretched property prices massively above incomes) therefore we predicted the crash which so far is approximately 15% nominal and 15% inflation loss. We understood that the response would basically be panic and default to pure Keynes, and therefore a mountain of money printing. Therefore anything that is more finite than the money printing would increase in value, or correctly be measured in more of the freshly devalued currency.

Which is why we bought a lot of physical Gold and Silver for the very simple reason is more finite than the money printing.

The gold bubble will burst once deflation kicks in.

Cash is king, along with beans and guns...

[aa3]

Very good point Shepski. I don't think CPI has quite been 4% a year since 2007... but it could have been 2.5%. Combined with a 16% fall in property prices..that is a 23.5% decline in real terms. Real terms meaning relative to the price of other things in the society.

[Pent Up]

Since when could new members start threads with their very first post?

Explanation mods?

New members can start new threads but they are checked in advance. As this was disguised as an HPC thread looks like it wasn't checked fully.

[davidcameron]

I am new to this Forum and i am a Hedge Fund Manager.

If you take the Halifax Housing Index it peaked in October 2007 so we are approaching the 3 year anniversary of its peak, since then prices are down 16.19% so an average of approximately 5% a year. If you add on RPI inflation at an average of another 4 to 5% a year over the last 3 years. In reality we have prices down close to 30%.

RPI Oct 2007 208.9

RPI Jul 2010 223.6

Increase 7.0%

Don't let facts get in the way of your opinions.

Hedge fund manager?

[exiges]

Very good point Shepski. I don't think CPI has quite been 4% a year since 2007... but it could have been 2.5%. Combined with a 16% fall in property prices..that is a 23.5% decline in real terms. Real terms meaning relative to the price of other things in the society.

Relative to everything except salaries.

[angrypirate]

I believe the halifax figures are adjusted for RPI

[The Bull Trap]

Cash is king, along with beans and guns...

Amen Brother!

[porca misèria]

New members can start new threads but they are checked in advance. As this was disguised as an HPC thread looks like it wasn't checked fully.

Not at all convinced by that. The proliferation of pure-spam posts hints at new-member moderation having been turned off.

[pl1]

I am new to this Forum and i am a Hedge Fund Manager.

And I'm a Chinaman from Guangdong province.

Move to troll forum.

[Shepski]

I really do not give a damn whether you buy Gold or not. I was just making the very simple point that it is not the headline price falls that should be looked at it is also the affects of inflation that should be looked at.

If you make 2% from your savings but real inflation is running at 5% then each and every year you are going backwards to the tune of 3%. In many countries funds can only report results after subtracting the official rate of inflation. Then you can quickly understand whether you are moving forwards or going backwards.

[awaytogo]

I.

Which is why we bought a lot of physical Gold and Silver for the very simple reason is more finite than the money printing.

Gold, Silver housing all in a Bubble.

[SarahBell]

2 caveats here, i find it incredible that we believe any price indexes produced by by two of the largest players in the mortgage market !!!!!!

I do think house price lists should include ALL sales. Repos, companys, "below market value" (haha)

Until we get an honest picture they can make it up as they go along.

[the flying pig]

I am new to this Forum and i am a Hedge Fund Manager.

If you take the Halifax Housing Index it peaked in October 2007 so we are approaching the 3 year anniversary of its peak, since then prices are down 16.19% so an average of approximately 5% a year. If you add on RPI inflation at an average of another 4 to 5% a year over the last 3 years. In reality we have prices down close to 30%.

This is because actual falls have only accounted for half the fall, inflation has done the rest. Or put another way the money today in 2010 is worth about 15% less as regards purchasing power than what it was in 2007.

2 caveats here, i find it incredible that we believe any price indexes produced by by two of the largest players in the mortgage market !!!!!! the Halifax who are already surviving only on state welfare and the Nationwide. No vested interests there then. Also the "official" RPI figures are very likely doctored to the down side by 2 or 3%, all government statistics are artificially rosy.

We saw a lot of this coming ( an out of control credit boom that stretched property prices massively above incomes) therefore we predicted the crash which so far is approximately 15% nominal and 15% inflation loss. We understood that the response would basically be panic and default to pure Keynes, and therefore a mountain of money printing. Therefore anything that is more finite than the money printing would increase in value, or correctly be measured in more of the freshly devalued currency.

Which is why we bought a lot of physical Gold and Silver for the very simple reason is more finite than the money printing.

what degree course did your girlfriend take (subject and class)?

[Kyoto]

And I'm a Chinaman from Guangdong province.

Move to troll forum.

Why the attacks on the OP?

This is one of the most interesting posts here in a while.

Inflation plus small drops. Before you know it, you have a house price crash.

The fly in the ointment is that we are not seeing any wage inflation, let alone 5%.

Thanks for the contribution though OP, please stick around.

[@contradevian]

Since when could new members start threads with their very first post?

Explanation mods?

The DVD ripping tool spammers have been able to for ages!

[gimble]

Why the attacks on the OP?

This is one of the most interesting posts here in a while.

Inflation plus small drops. Before you know it, you have a house price crash.

The fly in the ointment is that we are not seeing any wage inflation, let alone 5%.

Thanks for the contribution though OP, please stick around.

It's total balls because the halifax and nationwide numbers are already adjusted for inflation. See graph on front page. 'Real house prices' - these are the numbers that we are usually discussing on these forums.

[Alan B'Stard MP]

Hedge fund manager? You work in the B & Q garden department?

[babesagainstmachines]

It's total balls because the halifax and nationwide numbers are already adjusted for inflation. See graph on front page. 'Real house prices' - these are the numbers that we are usually discussing on these forums.

No they're not. It is still balls though.

I'm a commodities trader, and I say you should all buy wheat futures. Honest.

[Alan B'Stard MP]

Hey, hedgy....can you tell me who's on the back of a GBP1,000,000 note?

Edited August 23, 2010 by Alan B'Stard MP