Wednesday, Sep 17, 2008
Jonathan Davis HPC
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Speaking to the News Letter, Jonathan Davis repeated his prediction of 18 months ago that the average house price in Northern Ireland would fall by 50 per cent but said that some of the most overvalued houses would plunge much further.
I remember being on the Nolan Show on a Wednesday night a year-and-a-half ago and saying the market would fall 50 per cent – I was pretty well laughed off," he said.
"I'm pretty comfortable in saying that the average fall in Northern Ireland will be 50 percent which means that some properties could fall 70 or 80 per cent.
"It wasn't used, but I said on camera to ITV six months ago that the region in the country which would have the worst crash would be Northern Ireland because it went up the most – prices went up by 400 per cent in 15 years in Northern...
15 Comments
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1. housebear said...
Sorry about the long title for the article. Don't no what happened there?
Enjoy the topic..............back on houses again.....................
2. george monsoon said...
I love it!, especially the closing comment around Rabbit Hutches..!!
3. nubbers said...
At last, an article about HPC! Its been a bit lean the last few days.
4. handle_it said...
It's hard to believe it's taken this long for wheels to fall off the HPI gravy train. Looking back even some of the most entrenched bears must have wondered quite how the house of cards was proving them so wrong. Now it's here. The vi's of course say that we had to be right in the end. It was never just about being right - maybe to them it was.
5. monty032 said...
Excellent comments, Jonathan. Now you are being proved right with a vengeance and you deserve to sock to them. The UK property bubble as a whole was bad enough, but the situation in Northern Ireland was particularly egregious, with prices similar to SE England but wages far below, pumped up by investors from the Irish Republic. It certainly wasn't due to Northern Ireland's dynamic economy, which is made up of 70%+ State spending.
6. G0nzilla said...
I have been saying this for years. I am from Belfast recently moved to London, and it was clear to me there is no high end, value added economy in NI to speak off. It is a low wage economy and will remain so into the future. The 400%+ rise was fueled by property speculators from the Republic of Ireland and mainland UK built on the back of the peace dividend which was also a farce. I know people who bought at the very top of the market in bad areas of Belfast (because this is all they could afford) who are going to be financially destroyed by this. a 50%+ drop would essentially mean negative equity potentially for a lifetime if the markets learn their lesson. I would hang up my keys and walk if I found myself in this position. I did try to warn but the same people would not listen. It is funny how they stay in touch more now that I have been proved correct. I have not rubbed it in, I am not happy that people I care about have been mauled.
7. Luckyjim said...
I'm sorry. This clown has been predicting a crash since 2003. He didn't predict the credit crunch or the oil price shock. You can hardly say he has been 'proved right with a vengeance'. He was foolish enough to sell his own house long before the peak and has been desperately talking the market down ever since.
Any prediction on market moves will be right in the long run. Here's a prediction - "The FTSE will rise by 10%" - one day I will be 'proved right' probably in less than five years.
8. David said...
As a FTB , priced out for a decade, thank god for Jon Davies and this site.
9. inbreda said...
Jonathon - now that you (and us!) have been proved right - and now that there are (will be) a good number of empty slots in the TV schedules where property porn once festered - perhaps you should consider doing a Beeny/Krusty+Phil/Cook report type program. Dig up a load of old newspaper articles, dig around, and do a cook report - bang on a journos door and point out his VI and say that he was luring FTBs into negative equity debt trap with his unsubstantiated article. You could even pounce on Krusty, and replay all those moments where she said things like "great investment", "prices only ever go up" etc. It would make great viewing.
10. inbreda said...
If you do a TV series Jonathon, can I come along? I would love to get the opportunity to kick Krusty a bit when no-ones looking.
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12. wiltshire said...
Sorry Luckyjim but I don't think it's as easy as that. Jonathan Davis was predicting something which had most other analysts at the time laughing in his face. I sold to rent in North London in late 2006 and technically I was wrong, I could have stayed in the market for another 9 months and sold for more. Trouble is there are millions of people in this country who have now realised the folly of staying in the market for too long because they've well and truly stuck in a rapidly cooling market.
I admit that many got the timing about a crash wrong but my argument about the timing is I believe NO-ONE could have got it right (other than by luck. Having said that, didn't Soros and Buffett call things right (as usual) in terms of getting out of property?). And the reason no-one could have got it right is because no-one would have anticipated that governments were actually prepared to allow the bankers to bring the whole world to the edge of global financial meltdown. Now you tell me, other than the most extreme conspiracy theorists, who would have considered possible such suicidal and unhinged actions by governments?
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