Saturday, Dec 20, 2008
As soon as house prices have dropped
BBC: 'No recovery soon' in bank credit
"As soon as asset prices stabilise, then we will see the financial economy recover. And when will that occur? That will occur some time over the course of the next 18 months,"
Why not just say 'when house prices have dropped' - it would get the message out to the sheeple more effectively.
Posted by phdinbubbles @ 09:10 AM (721 views) Add Comment
8 Comments
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1. V Stor said...
This is an admission that things are really very bleak and that the housing market is headed one way - significantly down
2. paul said...
Estate agents are telling people that as soon as lending returns to normal levels, house prices will start going up, and here's a banks chief telling us that as soon as house prices start going up, banks will start lending again?
Chicken and egg?
And asset prices are no more stable now than two years ago. Spiralling out of control or plummeting like a stone.
3. renting2 said...
It's all about how people feel. Not house or money availability. The latter may contribute to people starting to feel good about buying houses again, but will not dictate how and when it happens.
4. str 2007 said...
On the front of our property paper there's an article attempting to talk the market up, however a contradicting view from an estate agent talking it back down.
The agent has clearly realised they just won't sell unless they get the market down another chunk.
But that's the only agent I've seen talking it down.
5. luckyjim said...
str 2007
I've seen a few of articles from agents predicting further falls. I think they have realised that it is not in their interest to market properties at unrealistic prices. They are now trying to persuade their vendors to lower their prices. Not before time.
6. Dbc Reed said...
Some land taxers have been saying for a long time that banks will only start lending again when house prices bottom out.Then a land tax (or another tax on property like the old schedule A [which taxed houses as Income,you'd never believe it!] should be instituted to stop house prices going up again :then the banks turn the credit taps on.Its not rocket science or the equivalent in Economics of working everything out with algorithms which helped get us into the present mess.
7. enuii said...
The article misses out all the other factors including rising unemployment, interest rates (will rise) and oversupply of unsuitable bubble property (tiny flats).
If we enter a period of heavy government approved inflation house prices (in sterling) may well recover by 2013 but that does not mean that their real worldly value will be the same.
8. mark wadsworth said...
What Paul says. Why do 20% annual price falls count as volatility but not 20% annual price rises?
DBC, exactly, LVT appears to be a young person's tax as it helps keep prices low and stable so helps impecunious first time buyers onto the ladder. The problem is that people have short memories and are pretty ungrateful (or brainwashed) and as soon as they are on the ladder, a politician tempts them with instant capital gains (by scrapping Schedule A, Domestic Rates, Land Value Tax, whatever) and hey presto, the tax disappears again, a bubble starts, and as there are more people apparently gaining from the price rises than the priced out people at the bottom, no politicians wants to reintroduce it.
To cut a long story, before we talk about tax reform, we have to change the whole mentality whereby serious commentators say that "The UK economy depends on the housing market" or words to that effect. We've got a window of two or three years, as I've said before.