Monday, Apr 28, 2008
Your weekly dose of comedy from Mr Lawz
Assetz: Ignore the hype, there is no house price crash
Figures from the latest Assetz House Price Watch, which analyses data from the five main house price indices, suggests that the market is in fact flattening, and not dramatically falling as reported by some.
Stuart Law said:
"Our analysis of average monthly prices across the main house price indices, combined with averaging these across the prior three months, takes out all of the volatility and statistical errors that are evident in the monthly data.
This much clearer picture of market performance and reveal that average annual price growth has now flat-lined at around 0%, with no significant decline.
As I have been stating for some time now, the housing market is very unlikely to crash. The fundamentals of supply and demand support this. I stand by prediction of 5% growth in 2008."
29 Comments
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1. paul said...
I've heard this ridiculous argument before - you can smell it when someone says "everyone, stop looking at the statistics as they appear and start looking at them the way I want you to look at them.
Thanks for turning up to the house price boom, Stuart. You can leave quietly now.
2. Peter Anton said...
My goodness, this man must live in a parallel universe. Does he not read newspapers?
The property market is dead, gone, bust, finished. What part of 'property collapse' does this congenital idiot not understand? And if he is such a strong believer in continuing house price rises why is he so busy trying to raise investor money to purchase houses at distress prices?
Assetz going bust perhaps?
3. hpwatcher said...
....so he isn't in denial then ;-)
I just don't know why people post links to the rubbish that this guy spouts.
4. denzil said...
I would agree with Law in that the market has not crashed but I would end the sentence with the word "yet".
I still hold firm in my belief that nationally prices will be 10% down YoY by the close of 08 but what is really starting to surprise me is how quickly things have gone bad for the property market. The enormous bubble created over the last few years is deflating at an ever increasing rate. The impact of the end of the bubble, coupled with the near death of BTL and a return to sensible lending multiples for all buyers is creating a very toxic mess within the property market.
It's going to get ugly.
On a related note and to pass credit where it is due. Regardless of the high-level of journalistic integrity and knowledge possessed by Kirsty Allsop and the fact that she bar none is the high-priestess and all knowing guru of all things property, I predict the demise of Relocation x2 and associated duplicates.
5. taffee said...
paul said is right
ignore everything all booms just keep going...
6. wiltshire said...
"The House Price Crash Infidels have been slain at the gates of our BTL properties by the might of the Over-Leveraged Revolutionary Army" - Stuart Laws, Assetz Minister For Information.
7. Rental John said...
“At the start of 2008 I predicted 5% house price growth for 2008 and with the current data in mind, I still stand by this, albeit with some significant uncertainty introduced over the questionable ability of the Banks, the Government, the Bank of England and the FSA to resolve the mortgage market problems in an efficient and timely manner.”
Notice he doesn't blame the speculators and greedy BTL'ers in this list!
If the government and BoE had intervened one or two years ago to prevent a overheat {as they should have}.....he'd be the first to complain!
Mr hpwatcher - you're so right, let's not give the guy time of day on HPC - unless of course we are in need of a good laugh.
8. denzil said...
wiltshire said:
>>"The House Price Crash Infidels have been slain at the gates of our BTL properties by the might of the Over-Leveraged Revolutionary Army"
Hilarious! The first thing I thought of when I read Law's comment was comical Ali and his denial that American infidels were not in Baghdad only for them to drive past the camera as he was talking, brilliant.
Actually Law has softened a bit. He is now using the word "unlikely" to crash.
9. wiltshire said...
Denzil, I tend to agree with JU that we're going to be looking at the business end of 20%+ drops this year. There have been many factors building up pressure within the system for a few years now and any of them individually could cause major problems but once they start impacting on each other and knocking onto others, well it's going to be like a tidal wave eventually. Headline inflation is obviously a massive problem and it's now acknowledged by pretty much everyone (apart from the Labour elite) that the figures are a con. That's causing the MPC problems in trying to slash rates to try and steady the housing market. Unemployment figures, government spending, the falling pound, multi-billion pound bank bail-outs, food riots, oil/petrol prices. Basically everything that could impact negatively on public sentiment is doing so at exactly the same time.
I keep saying it but we are watching history unfold here and this year is going to be hell for the VIs. Imagine what the statistics for house prices, sales etc are going to be like for April, May and June when the true impact of the credit crunch appears. It's still only a few weeks ago that the mortgage providers started to close down their product lines and that's yet to feed through the system. If you ask me the housing market is going off a cliff this year.
10. jack c said...
LP - Stuatz comedy once again at its best - "Ignore the Hype, Statistics Prove There is No Housing Crash" adjacent to which under latest articles is "Good news - prices are falling" - 28th April 2008
11. Ijjhall said...
Its clear that Law will bend the stats literally anyway he can to justify his predictions. It will be a challenge I grant to manipulate his 5 per cent increase but it should be fun watching him try..
12. plato said...
wiltshire said... " If you ask me the housing market is going off a cliff this year."
Couldn't agree more wiltshire. I'll bet a lot of politicians would say this as well, but value their positions too much and don't want to be seen as the conceived 'cause' of such an outcome by spreading panic............. Ironically they really have already caused it.
13. denzil said...
Wiltshire, 20% nationally will surprise me, though I think some regions will and potentially may see -20% from its peak by close of 08.
14. mark wadsworth said...
All these people who reckon that house prices will or flat are talking crap. If you look at all the charts of previous crashes (73, 90, 07) there is always a spike and then a crash. There is never a plateau. Prices are only stable at the bottom of the cycle, e.g. 1993 - 1995.
15. Jimmyb said...
They have got to talk up the market, that is what B***S** salesmen do, the consumer is just a mug punter to them.
16. it_is_going_with_a_bang said...
Basically what Stuart is saying that House Prices are dictated by population levels with subsequent supply and demand directly being the only thing to dictate house pricing.
Nothing to do with reckless lending and absurd interest rates then?
As I've said before if population density was the 'only' thing affecting prices then Bangladesh would be an expensive place to live. But it isn't.
But then again this guy is basically the mouth piece of BTL. So what he says mean pretty much nothing.
Funny how on this link :
http://news.assetz.co.uk/articles/4153.html
- prices are falling and its great news for the potential property investor.
Same Day - Same Site - 2 different opinions. Same Muppet.
17. Davros said...
Don't panic, don't panic, Captain Mainwaring!
18. Mattormsby said...
I think what he's trying to say is that Investing in Property is a GREAT idea.... and he can even help you do it...
http://investors.assetz.co.uk/property-listing.htm?attribType=6
definitely had no falls in those prices there.. lol lol lol....
Down down down.. until average house = 3.5 times local average income... which is about 20K here in leeds I think.. 70 grand then for an average house in average area...
19. bilko said...
Sorry to repeat myself yet again, but the true reduction of property has yet to show itself because it simply isn't selling! Where I live property has been on the market for six months or more but the prices have yet to be reduced. Only when it starts to sell will the true value be seen.
20. Landedgentry said...
Assetz to Debtz.
21. titaniccaptain said...
Have I just woken up in 2002? sorry its just that this mr law said property is going up...........YIPPIE.....Mr Law ive got a house you can buy at last years prices and if you do ill stop blogging on here
22. new user 2007 said...
So if everything everywhere goes perfectly i.e. the government suddenly gets hidden cash for fiscal stimulus, inflation suddenly disappears for monetary policy stimulus, the solvency issue is fixed (read as the global financial system returns to the unsustainable levels of the past 5 years, which assumes asset markets have bottomed), the world economy recovers THEN
we will get a 5% improvement. Conclusion: if through a miracle the credit cycle returns from its current normal state to the abnormal one of the last 5 years, then prices will rise 5%. How he is talking up the 3 month average based on the indices is beyond me...they are all declining month on month so he is just making up the quarter on quarter comparison (read as fudging the weightings)
Notice how he has gone from GAURANTEE that house prices will rise to IF, in the space of a month. He also said people should invest in Manchester 3 years ago (when the over-supply was in full flow). Now he is saying with a straight face that it is a good time to invest there as that over-supply will be gone in a couple of years so invest now.
The most irritating thing about his lies is the supply shortage issue. There are more properties now per person than in 1990. Properties may be smaller, but I thought that was what everyone wanted. Never any mention of Poles going home or that they can work now in the Euro area. Or the rise in unemployment (or anything else that could impact the market).
It is people like him and the fact that some BTL obviously believe him that worries me about average IQs and gullibility levels. I would be even more worried if I thought he even remotely believes what he is saying himself. Builders have stopped building because of the credit “crunch”, but it was never the credit cycle that drove prices? Interesting theory...before it was a lack of planning rights...
if prices were driven by a shortage why have they stopped rising? According to him, people are still arriving in the millions and the alleged homeless need somewhere to live.
of a month
23. Jackdaw said...
Agents are shutting down some of their outlets. 'Asking' prices of many properties in have flatlined - some vendors are still refusing to face facts. It may take a while for the penny to drop. With the UK population drowning in personal debt - high food and fuel costs - house prices are - to say the least - under pressure - unless our 'safe pair of hands' government allows inflation to rip - so wiping out debt (and savings) - and in so doing rewarding the profligate at the expense of the prudent. Don't put anything past them - we've all seen the debt driven 'stability' of the last 10 years - and with an election in the offing - there's not much they wouldn't do to get re-elected. Not that the other parties would be any better.
24. titaniccaptain said...
Hang on how completely void of culture do you have to be to have a company called assetz????? does he think he is a gangster rapper?
25. bystander said...
"does he think he is a gangster rapper?"@titaniccaptain
..no, unfortunately he probably thinks he's being 'clever'.
26. titaniccaptain said...
@bystander 24
Oh dear lol
27. titaniccaptain said...
prehaps he could start his own hip hop band called "In the Sh#tz" the album would be called "No Letz till Brooklyn"
28. Verymeanreversion said...
If you use a 300-month rolling average, house prices always go up. Eliminates all those nasty, noisy statistics associated with credit cycles.
29. george monsoon said...
This guy needs a slap to wake him up. Oh dear..