Sunday, Feb 17, 2008
Oh Noes!
Metro: Rightmove prices up 3.2% in Jan
Thanks to Metro for breaking the embargo, albeit only by an hour. Righmove shows prices rose by 3.2% in Jan. However the figures were distorted by the rush of cheaper 1 and 2 bed properties being placed on the market in December to avoid the HIPs deadline. Without this effect, prices would have risen by 1.5-2%, in line with the traditional February bounce. From June 07 to Feb 08, prices have fallen by 0.6%
Posted by little professor @ 11:12 PM (1040 views) Add Comment
14 Comments
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1. enuii said...
Hopefully Optimistic as the Rightmove Index is based on the Wishful Thinking of the Vendor.
2. Montesquieu said...
@enuii
Indeed - the Rightmove index is based on asking prices, not selling prices. With that in mind, the story actually reads as funny.
3. paul said...
If you read the article, it does say its due to a brief clamor for one and two bed flats.
In fact asking prices dropped by as much in December and January!
4. quiet guy said...
Here is the January monthly report which gives a -3.2% monthly average drop in asking price:
http://www.rightmove.co.uk/pdf/p/hpi/HousePriceIndex21stJanuary2008.pdf
It seems that Rightmove may be correcting an anomaly with the previous months data; seen together, these reports suggest that nothing much happened.
I don't recall seeing Metro giving such prominence to last month's figures :D
5. quiet guy said...
Oh BTW, I's just like to point out a little nit-picking point:
A 3.2% drop followed by a 3.2% rise is actually a drop.
Start with £100,000
add 3.2% appreciation = £103,200
calculate 3.2% of £103.2 = £3,302.4
Deduct £3,302.4 from £103,200 = £99.8976
hence total loss is £102.4
Yes, very picky I know but it's easy to forget that X% rise followed by X% drop is actually an overall drop. As X gets bigger, this becomes significant.
6. new user 2007 said...
Poles are leaving, thus leaving the BoE with concerns over wage inflation, just as price expectations are rising for Britons.
Now this data shows that house prices have yet to show a sharp downward trend, suggesting that that excuse for cutting is yet uncertain. This means rates should not be cut.
I am sticking to my belief that HIPs did disrupt the market, as did the new CGT rules. We will not therefore see a distinct pattern until April.
My forecast for this year is that Nationwide index will record almost no movement month on month this year. But this will result in a nominal fall of around 1% year on year overall. The real fun begins from the second half.
I also don't think sellers have yet realised their houses are not worth what they were and estate agents refuce to give in. Together this means sellers asking prices are unrealitistically high...
...what provides comfort is that this contradicts entirely the rubbish that the Association of Estate Agents and there buddies have been saying, namely that FTBs are swarming back in because of cheap prices...
how does this alleged improvement in affordability square with sellers yet refusing to budge on price? making it up as usual comes to mind.
7. drewster said...
Month-on-month statistics are volatile. Look at the last line instead:
When the entire period from June 2007, before the introduction of HIPs, to February 2008 is looked at, house prices have fallen by just 0.6%.
=> A fall of 0.6% over eight months.
8. growler said...
I think that vendors who have waited have all come on the market to "have a go". I've seen houses unsold since May come back more expensive than back then. We're looking at asking prices of the very optimistic who waited for Spring. Expect this blip to fall right back
9. Nstiles said...
haha a rise of 3.2% looks like you all continue to be wrong....ching ching
off to work you go..........
10. it_is_going_with_a_bang said...
I only see more For Sale signs.
Every day.
Everyone knows the crash has not started yet.
It's just grinding to a halt at the moment.
As the article points out agents are desperate to get business and will up the price by a few thousand to get the For Sale sign out.
Whether they manage to get that price is quite something else.
The few people I know selling property are looking at accepting offers 10/15 K below asking prices. Those sales won't appear for months yet.
11. Urine Trouble said...
I know for a fact that larger estate agencies have now stopped paying bonus on actual sales and are now paying bonus on number of properties brought to the market.
12. hpwatcher said...
I'm also hearing about lots of people being made redundant......
13. Lilp1976 said...
You people are truly hilarious. Why exactly do you want the whole thing to collapse? So people are left destitute? Anyway, it won't collapse and you know it. I suggest you bite the bullet and buy somewhere and reap the benefits like everyone else does long term when they buy a property.
14. new user 2007 said...
A 0.6% nominal fall over 8 months is a much larger real fall, given our high inflation environment. Besides, I thought prices could only ever go up:)
Also, the current figures reflect distortions (read as regulatory support from HIPs) and CGT. Lets see what trend is apparent from April.
NStiles please join drewster in the maths class. That is still a loss since the market turned. All this before the credit crunch bites...
it is only now that worsening sentiment, people coming off cheap fixed rate mortgages onto higher rates or even SVRs, no credit access, rising unemployment, Europeans leaving, no monetary or fiscal room etc etc will impact...
actual falls were higher (particularly in the apparently indestructible London market) so sellers still kidding themselves is not evidence of anything either way...year on year falls will start in mid year.
nothing can or should be read into this one month, but the fall of 0.6% when all the alleged pillars were strong says it all...it was liquidity driven and that has now dried up.
and from the BTL geniuses I know of, my net assets position is higher than most of them, as is my income stream. fine, I work, but i rather enjoy what I do and the reason this country has about 30 years before it is a laughing stock is because of people who helped drive our resources into non-productive investment while everyone else continued to build real economies.