Thursday, Apr 02, 2009
Nationwide: March: +0.9% :(
Surprise Bounce to March House Prices: Nationwide
Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said:
“Spring brought a surprise bounce to house prices in March. The price of a typical house increased for
the first time since October 2007, rising by 0.9% during the month and reducing the annual rate of
fall from -17.6% to -15.7%. This brings the price of a typical house to £150,946. The moderation in
the annual rate of fall is somewhat distorted by conditions last year and so it would be unwise to draw
strong conclusions from the significant slowdown in the annual rate of fall. Equally, while the rise in
prices in March is welcome, it is far too soon to see this as evidence that the trough of the market has
been reached. The Bank of England has already taken strong measures to ease the tensions in
econo"
48 Comments
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1. quiet guy said...
Rejoice and watch the empire of debt rise from the rubble of our economy!
Also, remember that we have to watch out for deflationary pressures so maybe it's time to cut rates again as well?
Well, no not really but that's the sort of thing we will be hearing soon I suspect.
2. britishblue said...
Totally to be expected. The Halifax had their 'bounce' in January. It will make very little difference to the long term trend which may have a few bounces, but will still be increasingly downwards.
The indexes whilst useful fail to measure many things, like for instance, in a boom every house on the street sells from the one that has the complete overhaul with new kitchens, bathrooms and conservatory, to the rubbish that needs rewiring. In a non boom time only the best houses in the street sell even though they would be categorised as the same dwelling type in the indices.
3. doomwatch said...
There were a number of more significant up-ticks like this at various points along the general big down hill of the last crash. Back
then the vested interests popped up in the media to tell us all that property was back on track and to go and get a big huge debt stone
round your neck before prices shot back up. They were wrong then, and they are definately wrong now, as we are in a much worse situation.
4. Solomon said...
Oh dear. Careful. Don't miss the bottom.
5. growler said...
It is Easter after all: the Estate Agents most key time of the year even in boom times.
6. timmy t said...
"...while the rise in prices in March is welcome..." ooooh yes, very welcome, everyone wants to live in a country where nobody can afford a house... let's hope we get back to double digit growth soon... what a nob.
I stand by my argument when Halifax announced the rise - FTB's have all but disappeared so a higher percentage of transactions are happening with higher value properties.
7. ana lytics said...
wow......... 0.94% Seasonally Adjusted, and +2.17% Non-SA. +2.17%. Hmmmm, I don't think so.
8. charlie brooker said...
The Budget is on April 22nd. Just wait for Darling to announce those tax rises and the false dawn will exposed as the headlight of an oncoming train.
9. alan said...
As I stated on a previous post, I believe house prices will rise in the very short term. This has been brought on by very low mortgage rates on offer.
The problem this creates for new buyers is that rates are abnormally low at present and likely to rise, soon. They were never this low in my lifetime, anyway. What do you think will happen when rates go back up?
By Christmas you will see a different story!
10. george monsoon said...
Do dead cats actually bounce?
11. sold 2 rent 1 said...
The Armstrong high is this April. Last chance to sell before the next downleg
12. Mr Cobblepot said...
Well if thats the case, theres no excuse not to raise interest rates seeing as everyone agrees that 1% or lower is completely pointless.
13. tyrellcorporation said...
Charlie, I suspect any tax rises will be put off until summer 2010. The flow of 'good news items' and stimuli will get faster and louder from now on.
After that general election though we'll have to pay the ferryman big-time.
14. growler said...
also look at Nationwide figures for 1991 and 1992. Spring rises but the market continued to fall until much later
15. little professor said...
16. symo said...
Don't forget the wonderful rise in interest rates to double digit figures to cope with Chairman Brown's spending habits.
17. japanese uncle said...
This news warrants the popping up of O'RLY Bird.
18. charlie brooker said...
tyrellcorporation
You might be right - I wouldn't put it past them - but it only makes matters worsererer.
19. mander said...
So the house prices are not falling as fast not that they have risen. Let's destroy capitalism by keeping on bubbling, house prices going up and up, also ignore 3.5 income to loan value as it is not productive and get to the same stage where American people couldn't pay anymore their debt. Let's have the oldies on the top of the property ladder investing more and more shutting the door of young families struggling to afford a home in the near future and make sure their children are born in debt to start their life with.
And make sure an acute shortage is maintained so the bubble starts sooner not like in the US or Spain where they have build as many houses as it was needed.
Great capitalism created by easy money.....
20. mark wadsworth said...
Oh dear. We may have to postpone five-year-negative until May 2009. NB, average price now =£151,000 ,average price in May 2004 = £149,000.
Interestingly, in the period Jan 1991 to December 1995 (60 months) there were 28 months in which Nationwide's monthly index showed an increase. April & May showed increases in four out of those five years, but there was never an increase in August or September.
This misses out the first proper year of the crash, but to be fair, we've now had a year and a bit of prices crashing most gloriously and now we're in for the long hard slog (and those STR's who have to keep their respective Her Indoors on a short leash now what I mean!)
21. wdbeast said...
I think the HP indices reductions that we have seen over the last 18 months are just a correction from the manic market that existed from 2002 to 2007.
The volumes then were incredibly high in both residential and BTL property and demand led to unsustainable prices.
So we have had a blow off.
The housing market is in the doldrums and volumes are so low that statistics are tenuous at best.
We have not had a HPC………..not yet, it really hasn’t started.
That comes next, with high unemployment, reducing wages, unmanageable debt, increasing mortgage interest rates and a very deep recession.
There is very little forced selling yet, that sadly is still to come, and it is widespread forced selling that will signal the start of the real HPC.
IMHO that will not start to happen until autumn this year at the very earliest, but will last for several years, I can easily see prices reducing by 50% form where we are now.
22. mr_smith said...
funny how they ddn't release the figres yesterday..... no one would have believed them.
agree wth MW 19. we may have had the most crashy part of the crash. I mean its not realistic to expect house prices to keep crashing at a record rate for ever. more likely we'll get a slower drift down.
I wonder how londs prices will do given that
1) the bubble popped about 6 months later here
2) it was more overinflated here at we are only back to 2006 price
3) all the money being taken out of the economy it is london.
maybe continued big falls in london - lets hope so.
23. sold 2 rent 1 said...
Slightly off topic, but maybe you all should have a think about where all this is heading.
Materialism is ending, and don't claim "all I want is a house for my family", as this too is included in materialism
Interesting article today from the thetruthseeker
http://www.thetruthseeker.co.uk/article.asp?ID=10440
I expect the normal abuse from the usual suspects
24. mr_smith said...
bah my spelling is rubbish, I wish you could edit these posts
"I wonder how londons prices will do given that....."
25. japanese uncle said...
Let's see what should follow once the BoE is forced to start raising IR by the inflation index most likely destined to rise in the very near future. given the current luantically low IR. Even more drastic 'correction' will be inevitable.
26. growler said...
Japanese Uncle: I think this is exactly it. Since unemployment is a lagging indicator, we'll have high unemployment and increasing interest rates together. Then the real flop in prices as buyers evaporate and sellers are forced
27. Lucas said...
This should be expected and means absolutely nothing. During the last crash in the 90s prices went up a few months in a row but house prices were still significantly down from those levels four years down the line. The overall trend is down and will continue to be so.
28. Neil B said...
I agree with Timmy - this is just statistics based upon average values. The average selling price has risen because there are more high end properties being sold than low and middle end, not because the values on a whole have risen.
Example 3 houses are sold one month: a) 100k b) 200k c) 300k. Average selling price = 200k
Another 3 houses are sold next month: d) 200k e) 300k f) 400k Average selling price = 300k
29. rm96696 said...
Fore years government and BoE policy have singlemindedly focused on inflating house prices. We will have the highest unemployment rate in 30 years, a worthless currency, worthless savings but by golly we prevented full deflation of the housing bubble! Isn't that wonderful?
30. Tigger said...
Looks like you're all wrong guys. Sorry, but you may've missed the bottom.
Too many factors here propping up the market to fall back on the house price/earnings ratio vs. long term or similar bear arguments.
31. Missdissapointed said...
Surely going by the typical bubble graph on this site http://www.housepricecrash.co.uk/graphs-bubble-lifecycle.php we have now reached the bull trap. We may see half of the HPC losses now re-inflate before panic sets in. So as said on earlier posts this could be due to inflation.
Also a couple of weeks ago, there was a post about the bigger picture bubble since the 70's that followed the graph exactly.
Although I can't find a detailed graph of the Japanese HPC, I remember that they also had their bull trap for a few months.
JU do you know where to find a detailed graph of the Japanese HPC maybe?
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33. str 2007 said...
Agreed MW and WD Beast
I tend to feel that we haven't even started to see the recession yet. I don't think it is anywhere close to the 90's recession - yet.
As you say as we see unemployment rise through the year so prices are likley to fall further.
With regard to interest rates is it not feasible (particularly given the surprise most have had at how low they have gone) that there will be a G20 agreement to effectively re-set rates at a lower level?
IE perhaps peaking at 2.5% with 1/8% moves as opposed to the 1/4% moves we're used to. I seem to recall that rates used to move in 1/2% jumps when we all owed alot less money.
S2R1
Gold sharply down again today in Sterling terms. Any opinions on whether today you see it going uch lower before the pick up you anticipate from mid April ?
34. Phony Maths said...
So we're back into 10.8% bubble territory (0.9% monthly growth annualised) are we then???
The maths don't add up from these banks/BSs, as how does a 0.9% monthly increase translate into a 1.9% reduction in the annual decrease - Maybe I've missed something, or my spreadsheet isn't working right ... it's possible!
35. shining wit said...
Hilarious.....simply the funniest thing i've seen since I saw a black president pour praise on a one-eyed jock for helping create the very financial mess that they are currently trying to cover up/rectify.
We appear to be living in a drug fuelled fantasy land, where unemployment isn't a problem, inflation doesn't exist, and orgy of giving credit to the un-creditworthy hasn't resulted in an explosion of irresponsible spending and we never have to pay for things because we just have to service an interest only mortgage (what interest) and watch our assets grow in value, remortgage them and start spending again.
We can all live in tiny homes, that cost twice the price of places in France, to live with twice the rainfall of most of europe and half the standard of living of the Germans.
The bankers (US and UK bankers - as the french and germans have so rightly pointed out) didn't start lending trillions to the unemployed and barely working, to buy homes that made the biggest property bubble/asset bubble in history and there is absolutely no chance that house prices will continue to fall !
Oh.... and we didn't start two wars with sovereign states, for reasons that are completely non existant, killing thousands of people, hundreds of troops, costing billions of pounds, to actually increase the risk of fanatical people blowing the living .... out of people in terrorist acts.
I'm off to the pub for a nice meal and more than enough beer to make driving impossible.
This country is barking. No wonder the Europians call it an american aircraft carrier off the north coast of France !
36. Sparks2004 said...
don't miss out again peeps.
37. This comment has been removed as it was found to be in breach of our Blog Policies.
38. 51ck-6-51x said...
str - oh, and keep an eye on the G20 too of course... currently driving gold down I think.
39. str 2007 said...
666
Thanks for that, opens a new window of observation for me.
What your saying is they are expecting a further 650,000 redundancies to have been registered in the last month in America & if not as many as that have been made redundant (ie things are slightly better than anticipated) then this will directly push the Gold price down.
I wonder if anyone has a graph of the 2 figures overlaid ?
Personally I would have expected the promised 'printing of money' to have more of an impact in raising the price of Gold as opposed to one months figures - but that's markets for you I guess.
Interesting to see though that alot of the big buyers of Gold India Turkey Thailand etc are hardly importing any now, in fact starting to export. That's a huge turnaround.
40. 51ck-6-51x said...
str - "That's a huge turnaround." - yes I think this is quite big news too. But it is scrap transactions, so take it with a pinch of salt - the fact that the jewellery makers are shifting less finished product does have an effect though. I've said before that gold is not really a hedge against inflation itself, but rather to impending crisis (high fear drives up gold, low fear drives it down... but once inflation actually arrives there are better things to have one's money invested in - those assets where the inflation is strongest!)
41. str 2007 said...
666
When they said scrap tansactions I read that as ''they are recycling the scrap to extract the Gold'' hence not needing to buy more 'pure' gold.
There will be a few sore Gold accounts today with 5% fall in 1 day. Still, it seems to fly back up again with similar volatilty.
I seem to recall someone posting a historic gold price analysis recently showing that Gold almost always falls in March, for some reason.
Whether this is the build up to a very good buying opportunity remains to be seen.
Alot of publications are expecting Gold to do well this year, looking at a chart for the last 1/4 it's definately been heading down since about mid February.
Have you also notice the volatile dip mid-week and the fact that last thing Friday and 1st thing Monday is a good time to sell most weeks ?
42. mountain goat said...
Step aside and watch gold fall as stocks boom it seems. It might go on for weeks or months. Trouble is we are going into summer weak trading season soon and i cant imagine stocks booming through the summer too with all the bad news around. But who knows maybe summer gets cancelled in a recession.
43. str 2007 said...
MG
See the top post today about G20 outcome, one or two people seem to have read something about releasing European Gold onto the market to raise funds.
Haven't seen it myself but as 666 says, seems odd they'd announce a big sell off before doing so.
44. mountain goat said...
str 2007 - Calls to sell IMF gold seem to recur a lot. Last I head was some weeks ago from Ethiopia. I can't imagine Germany and Russia agreeing to this. So I am sceptical, believe it when I see it. More inclined to think gold will be sold by speculators having a flutter on stocks for a bit.
45. mountain goat said...
Just saw this on Reuters. Not new plans to sell the gold just bringing it forward. Still might affect the gold price I suppose.:
was quoted at $896.50/898.00 an ounce at 1520 GMT from $926.40 late in New York on Wednesday.
LONDON, April 2 (Reuters) - Gold hit a low of $893.70 an ounce on Thursday after Prime Minister Gordon Brown said the G20 will ask the International Monetary Fund to bring forward its programme of gold sales, and as equities extended gains.
The precious metal had already slipped 3 percent earlier in the session as tentative hopes for a recovery in the world economy boosted interest in other assets such as stocks and industrial commodities, diverting interest from gold.
Spot gold
46. str 2007 said...
MG
Thanks for that, been looking on Bullion Vault today with a view to buying back in but couldn't help noticing that in the 'market depth' segment there seemed only to be sellers and hardly any buyers lined up and so decided to stay off at the moment.
Have missed the very bottom as I type, but not sure that it won't fall further again tomorrow given the news.
Having watched the 1 month chart I was expecting a dip to about £19700kg yesterday/today, which I'm quite proud to say has happened, but I haven't had the courage of my conviction to buy back in yet.
47. mountain goat said...
str 2007 - well done for holding out.
My own approach is long term investment with a small bit of speculative buying and selling. To be honest I think there will be better entry points this year, possibly this week at $850. Part of me thinks gold is going to go sideways for much of this year against the dollar. But I like to be in the game incase there is a sudden disaster like JP Morgan going under which would send gold soaring.
48. Pgrewal said...
House prices are going up, what a bunch of crap. There is no such thing as a house price increase during a credit crunch, especially during the current conditions. The current economic downturn will not create any growth in the housing sector for quite sometime, instead we are looking at a big fall well into next year.
Nationwide are protecting their own interests just like all the theives in the banking industry by creating some kind of interest to the public to show that they will be lending in the near future, for which they won't.
STOP ALL YOUR LIES!!!!