Monday, Apr 30, 2007
The mother or all the reports...
HousePriceCrash: ABN Amro Report
I am being not too original here, and post a link from the HPC site. ABN is making absolutely clear that UK housing market will crash with a much greater bang than the US. I suggest you read ABN's full-length House Truths report, if you havent yet. Maybe Webmasted can post it on this site.
Posted by confused76 @ 07:20 PM (44 views) Add Comment
7 Comments
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1. japanese uncle said...
Well written report. ABN Amro has been consistent in terms of their critical view about the unrealistic UK property market all the time, unlike Capital One. Crash in the UK will have to be much severer than in the US, all the more for the extraordinary dependence on houses as source of wealth, exactly as has been maintained here. Now is the vindication time for the HPC regulars, well done all,.
2. enuii said...
Quote, 'UK housing is overvalued by about 50%', says it all really!
3. Realist said...
I had to listen to one of the big estate agents' chief economists banging on about the UK housing market today and the usual blather about demand, limited supply, land shortages etc. These "experts" happily ignore the fact that there has been a speculative property bubble across countries as diverse as the Netherlands, the US and Australia - countries with very different land supply issues. On the other side there has been a ten year stagnation in Japan where land is very constrained. Supply in the UK is a red herring. The on-going boom is purely speculative and cheap money driven.
4. bidin'matime said...
I was talking to a client on Friday who has several BTLs and sold one last year, as it wasn't covering costs, and is keen to sell another one soon. But then another told me he was buying another property and when I asked if it was a good time, what with interest rates about to go up again, and he had no idea that they were on the up!
5. confused76 said...
I love this intro... this is real genius... the market is f***ed... "U can't thouch this"
U can’t touch this
Dario keeps handing us sticks to beat him with. After telling us about his pink
mountain bike last week, he recently revealed his most recent music purchase: MC
Hammer. This makes his criticism of Rob’s musical tastes (the Pet Shop Boys and
Abba) look pitiable. Obviously, this has very little to do with the subject of today’s
Overnight Report, which focuses on the US and UK housing markets. Except that
markets clearly believe it’s ‘Hammer time’ for US housing, while UK housing is ‘Too
Legit to Quit’. But if you ask me, it’s UK homeowners who need to ‘Pray’ (Perkins tells
me these are MC Hammer song titles – we’ve hit a new low).
6. confused76 said...
... and then a masterpiece: how comes that market "fundamentals" apply to purchase price and not rentals, arent supply and demand for the two markets related? I hope BTLers are reading and taking notice...
"[market] developments in the UK look harder to explain. Still, it hasn’t stopped some [cheerleader]
from trying. We are told the lack of spare land, rising immigration and demographic
factors justify the premium on UK housing. But I’m yet to be convinced. These
factors should boost prices and rents by a similar amount, as marginal buyers are
forced into the rental market. Yet prices have risen far more quickly than rents over
the last decade. The ratio of house prices to rents is now almost 50% higher than its
long-run trend, compared with around 25% in the US. In fact, prices have risen so
much faster than rents that rental yields are now below mortgage rates."
7. talking rot said...
This meets my "worldview" but it fails to explore what may precipitate a crash and when. Although I do not believe any one can predict the latter, ABN are clever enough to suggest the former.
Still, as heart warming to me as it is, it isn't much use.