Thursday, May 29, 2008
Biggest drop since 1991
Nationwide: May HP figures
The first of many - now a YoY drop of alomst 5%
Posted by growler @ 08:07 AM (675 views) Add Comment
8 Comments
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1. Ijjhall said...
The Times pefaced the falls with this introduction :
Nationwide records biggest annual fall since 1992 downturn but figures are still five per cent higher than two years ago
So clearly this is the new tactic, push back the date to keep the figures in positive.
2. hpwatcher said...
Good, good, good!
3. stu_b said...
If we only need to see another 5% drop to get back to May 2006 and 10% to get back to May 2005 then we should pass May 2006 by July (on the way down!!) and May 2005 by Sep/Oct...so thats 3 years HPI wiped out in 1 year...
4. night said...
Not looking too rosy for anyone who bought at peak with a 95% mortgage. And if prices continue to fall as fast as they appear to be, the 90%ers at peak and 95%ers in the year up to the bubble will also get caught out. Won't be much fun for them when they need to remortgage at 100% in May next year. Wonder what rate they're likely to get by then...
5. night said...
Page 2 of the report - There's a graph titled "Housing Turnover Rate" with a little annotation indicating "Turnover peak before current downturn". The Earley bird uses this to make the argument that "borrowers are better placed to weather the storm" because the turnover peak was lower than the one labelled "Previous peak".
Am I being really dumb? What about the three huge turnover peaks (1999, 2002, 2004) which are totally ignored? Why pick the tiny blip at the end of the graph and label that the peak?
Statistics don't lie, but liars use statistics.
6. night said...
Remember: prices were still going up until October 2007 last year. Prices are down ~£8K since the same time last year, but we're actually down ~£13K from the October peak (according to the Nationwide data). As we head towards October the YoY falls will sound increasingly dramatic.
Even if house prices didn't drop any more, the YoY figure would still be negative ~7% by October.
7. mark wadsworth said...
In the immortal words of Blur "WOO HOO!!".
At the risk of repeating comments above, prices down by 6.7% since last October's peak! That's an annualised fall of 10%.
Stu B, excellent analysis, excellent!
If price-crash porn were given certificates, this would be triple X and only sold under the counter in licensed premises.
8. growler said...
I can think of a few slogans like:
"Every little helps"
But I like best of all
"I'm lovin' it"
You can see that they're trying to polish a t#rd with the comparatices to 2 years ago. But what about the trend.... it ain't now going to stop, is it. The price will keep falling and the fall from peak will soon be the YoY figure. I expect - looking at the maths - a Nationwide figure of possible -15% yoy by Christmas.