Monday, Nov 12, 2007
Confusing Times
Times Online: Home economics - the property market
"Let us start with the basics. By how much are houses overvalued, in Britain compared with their long-run average? PWC’s first answer, based on its housing model, is that prices are 20% higher than they should be. Bring in other factors, such as supply constraints – the lack of new houses relative to the rise in the number of households – and this figure drops to 10%."
Posted by peter @ 08:25 AM (441 views) Add Comment
2 Comments
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1. disillusioned said...
If houses drop 10%, I think we may find that the 'supply constraints' evaporate rather quickly - with reduced immigration, fewer second, third homes and fewer BTL. At this point the 20% figure will be a minimum fall.
2. Jason74 said...
Sadly we can't ignore this one. A piece from a respected, non VI firm, suggesting that the possibility of meaningful absolute price falls are only c20%. Hopefully they're wrong, but it should make all but the most extreme bears question their faith that there will be a crash