Monday, Apr 02, 2007
Property market 'heading for a fall in 2008'
telegraph: Property market 'heading for a fall in 2008'
The housing market is heading for a fall next year, experts have warned, after it emerged that property is at its most overvalued level in more than 15 years.
The shortage of suitable houses for sale means many deals are being decided through sealed bids
Soaring prices are putting properties out of reach for many, with unaffordability reaching the worst level since the end of the last major crash, according to figures produced for The Daily Telegraph.
Posted by taffee @ 07:24 AM (136 views) Add Comment
5 Comments
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1. japanese uncle said...
'Fall' may not be an appropriate term. HPC for that matter, may be renamed as HPSC= House Price Spectacular Crash, as the real horror picture of the US housing market is now unfolding by stereo in front of us. No less heavily geared middle class in UK are exposed to exactly the same danger as their cousins in the US. So many of them today bear an unbearable burden in the form of buy-to-let mortgages particularly if taken within the last three years. BTL for them will be remembered simply as the curse of their lives. This Chrismas, tens of thousands people will be living in the temporary housing or at the worst cases on the streets, with fond memory of their ephemeral home sweet homes. They should have visited this website earlier, to learn a lesson ie, walking away from any risky deal, particularly borrowing opportunity is the best policy in your life. You may not gain too much, but you will not lose too much either, to stay in less turbulent life. Amen.
2. paul said...
Yes but they're still peddling the housing shortage myth. For a newspaper that was one of the first to carry Eddie George's disclosure that the BofE started the price boom independently of demand and supply, they should know better.
3. sold 2 rent 1 said...
Lombard Street Research are the most accurate predictors in the UK
There is no graph again this quarter.
Here is the graph from 6 months ago
http://www.telegraph.co.uk/money/graphics/2006/10/02/cnhouse02big.gif
The index was:
97 in October 2006
94.3 in January 2007
91.2 in April 2007
This shows that the index falling at a rate of 3 points per quarter.
IMHO the graph will need to hit 80 (the same as 1975) before a crash starts.
This matches up with the 33 year cycle we are in.
The index takes into account
real disposable income (growing slowest for years)
interest rates (rising steadily)
house prices (rising steadily).
My prediction for the index is:
88 in July 2007
85 in October 2007
82 in January 2008
79 in April 2008
The crash will start by Q2 2008. Mark my words.
Slowly at first but reaching full blown by 2010.
As noted a few days ago, Fred Harrison has got it spot on so far.
Economic cycles exist. We just don’t really understand how or why they are they are so accurate.
4. nearly30 said...
Cycles do get a knocking - magic, myth or reality?
I think they are symptomatic of human endeavours and are very complex things.
I will agree with you sold2rent1 - in the 'current' environment the 2010 milestone looks likely.
However - one must consider the effects of the Landlord deposit scheme, HIPS (1 June 2007) and the further rate rises (some say 0.5% this or next month - or even cumulative perhaps).
Think we will have a truer picture after June kicks off - esp. as this is prime home buying territory.
In addition - think the 'bank penalty charges' and 'credit card rates' issues we have seen will have an effect on the costs of borrowing and a change of attitude from the banks - esp. in light of sub-prime - just think banks have a lag-time (call it sentiment).
5. Manjit1966 said...
Well Well , we can all hope but there are a lot of problems that will keep demand high such is the number of immigrants coming into the UK from Eastern Europe unchecked. Common sense tells us that a correction should happen but i think it will just be atail off