Monday, Aug 07, 2006
Record increase in house hunters points to further price rises
The Independent: Record increase in house hunters points to further price rises
Figures published today show that a record number of potential house buyers outnumbered sellers by a margin of more than two to one last month - suggesting that prices could continue rising despite last week's interest rate rise.
Hmmm - maybe they have registered anticipating a nose dive in house prices......
Posted by onyerhike @ 09:34 AM (174 views) Add Comment
6 Comments
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1. Geneer said...
just keep spinning chaps......ain't no stopping whats coming.
2. harold said...
Given that most people when house hunting register with a number of agents and that large numbers of properties on the market are sole-agency, the ratio of 2.5 buyers to every 1 property is likely to be highly skewed. This IV spin is intended to boost flagging confidence following last week's IP rise. However, property prices are as much a function of affordability as they are a function of supply-demand ratio. That is, it doesn't matter if a 1000 people are chasing one property, if no one can afford it its price will fall.
3. talking rot said...
Well said Harold
Another point springs to mind. I know home owners who register with an Estate Agent out of curiousity; they want to get a feel for the market even though they have no intention of moving. This is increasingly likely as moving house is now very expensive. I have also registered with a number of Estate Agents - not because I intend to buy a house at the moment (but maybe in 2 years) but because I want practise in offering and negotiating prices. Well, how else is a potential FTB going to learn?
4. paul said...
They've deliberately misinterpreted putners' potential intent to buy as meaning "intent to buy at ANY price", when it actually means "intent to by at the RIGHT price". Also these figures do NOT reveal how many properties are on the verge of adding to the repossession statistics, or how many market-peak buyers will want to get out very quickly in the coming months.
There is a belief (one which Kirsty and Phil Allslop have often held as gospel) that the minute property prices fall, buyers will step in and bring demand back up, thus raising prices again. However this notion shows a complete misunderstanding of the groupthink mentality during a downturn. No-one will want to buy a property that is losing value by the day, and why buy now if you can buy next month cheaper?
These newspaper desk editors must be desperate to protect the value of their "investments".
5. uncle chris said...
As with others, I'm registered with several EAs, purely to monitor the market. I have no intention of buying now, even though selling prices in my area are down 10-15% on what they were in 2004 - judging from land registry figures for houses that have sold several times in last 6 years. No surprise to find these figures come from YourMove - more VI spin.
6. inbreda said...
By the articles own admission, the vast majority are existing homeowners.
This means that if they DO find a place to buy, they will then put their property on the market. So although there is a skew in the figures, it is only a time delay, and not an ACTUAL difference between supply and demand. As HPCers have already pointed out, the buyers are not necessarily serious buyers, and if they are they will either find what they want and then increase supply by putting theirs on the market or not find what they want (i.e. NOT buy, i.e. NOT contributing to demand).
This is probably the most desperate VI spin I have ever seen.
And besides, there is no indication of whether these homeowners are looking to upsize or downsize. It is also possible they are keeping a close eye on the market with the intention of dumping their property if things look to be going pear-shaped, thereby being non-serious demand, but potentially very-serious supply.