Tuesday, Dec 18, 2007
Forecasts correction of 10% in house prices
Telegraph: UK recession forecast put at 50-50
The prime reason for a slump was an expected fall in house prices, which, according to Halifax, have now fallen consecutively for the past three months.
"The last time the Halifax house price index was dropping like this was back in 1995, when the housing market was just getting going after the last crash," said Mr Owen. "I'm no longer comfortable with this view that the housing market can just tread water for a few years. What's much more likely is that there will be outright falls in house prices - probably of 5pc-10pc."
He said that there had been four major peaks in house prices and affordability in the post-war period - the late 1940s, 1973, 1989 and, now 2007. "After each of the first three peaks in this post-war period, values dropped by 30pc in real terms.
5 Comments
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1. hpwatcher said...
[sorry to comment on own post]
I think this guy is far too optimistic. The house price gains for the 6 months haven't even been wiped out yet.....and these idiots are talking like the world is about to end. The bubble HAD to burst.....the credit crunch merely complicates matters.
2. it_is_going_with_a_bang said...
"There is always a severe correction following a bubble."
and then follows it up with ...
"I don't think it will be on that scale this time, though it is certainly a possibility."
Talk about hedging your bets......
3. daft boy said...
Davd Owen is supposed to be an expert ? Sack the idiot. I was forcasting all this over a year ago and took all steps to protect myself. Are these people on drugs or something ? its not rocket science.
4. Renting2 said...
There are all these 'experts' running around with billions to waste trying to prop the whole edifice up. The only thing that will now stop the inevitable is divine intervention (and I don't mean G Brown or the BoE). I hope I'm wrong but I get the vague uneasy feeling that the whole GDP of GB US and EU would be used if the bankers had access to it in order to keep a housing crash from occurring.
5. the reaper said...
I'd take evens and put the STR fund on it.