Monday, May 04, 2009
CEBR talking balls again
Express: HOUSE PRICE SLUMP ‘ENDING’
HOMEOWNERS were given fresh hope yesterday after economists predicted the end of the house price slump is now in sight.
Property values could fall another 8 per cent from today’s levels before hitting their lowest point, the Centre for Economics and Business Research predicts.
But it said that prices will start rising in six months time and keep doing so into 2011.
The centre expects a stronger performance by the end of 2013 by which time the average home will have rebounded to £170,000 from £144,000 at the end of this year.
Posted by little professor @ 01:44 AM (2198 views) Add Comment
19 Comments
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1. little professor said...
CEBR's previous "greatest hits" include:
* a prediction in 2007 that a house price crash was "off the cards" and house prices would keep on rising by £1000 a month due to strong fundamentals,
* a prediction in Jan 2008 that house prices would only fall 5.5% i total, and
* a prediction in May 2008 that house prices would rise by 30% by 2012 to reach an average of £226,000
They are completely discredited úberbulls.
2. Tennouji said...
And even if they were true, why would a homeowner be happy that the over-priced "investment" he/she bought in 06-07 will still not have recovered its "value" by 2013?
3. deeplyblue said...
This is another headline which decidedly oversells the article. It reads "House price slump 'Ending'. However, read the article, and it should say, "House price crash will end - but not yet, and not much rebound for years." I grant that's a little less snappy. However, (using the Express article as the only source) CEBR actually say that house prices will continue to fall for the next 6 months, by about another 8%. Now that depends on whether it's 8% from peak or 8% from current market value, but it's still a non-negligible fall - it represents more than some vendors are currently taking off their asking prices from 2007 levels!
Furthermore, "The centre expects a stronger performance by the end of 2013 by which time the average home will have rebounded to £170,000 from £144,000 at the end of this year." I'll repeat that one BY THE END OF 2013. So those reckoning to "wait out the dip in prices" can be getting their house ready to market in 2014. Always supposing that their mortgage company has not re-valued the house in intervening 5 years and declared them in negative equity. And that unemployment, economic collapse and mortgage famine have not created additional problems in the interim.
The problem, as ever, is that the headline does the damage. Any bets that there are vendors telling their EAs, " and don't take a penny under the asking price. It's official - the house price slump has finished." For so many, the difference between the headline and the article, between biased and unbiased reporting, and between "one report says," and "almost all the experts agree" is just irrelevance. They don't want to be confused with facts.
The Guardian's reporting is even more downbeat, "house prices are likely to remain in the doldrums for some time." Okay, so they're still reporting that one think tank is calling the bottom (after another 8%), but saying that "We may start to see stronger house price growth towards 2012 or 2013," is hardly ultra optimistic - not given the words MAY and START and TOWARDS. This report is being presented as bullish, but "more to come off, another five year bouncing along the bottom and then who knows it might get better" counts as pretty optimistic in many circles.
db
4. A Solovine said...
"The centre expects a stronger performance by the end of 2013..."
There is no point - no point, I say! - in dignifying any forecast that goes out this far. Factors that affect UK house prices are so complex and nuanced, how can they possibly have any clue? Does this group have privileged information from the US Fed? From the BoE? What if they do? No one can reliably predict the value of sterling a year from now, six months from now, six weeks from now... Will the Euro be extant in 2013? Will come catastrophe quench global oil supply? These all potentially impinge on house prices indirectly by affecting inflation, interest rates and employment, but the extent to which they will do so is unknowable.
There's little value commenting on the veracity of the piece except to point out that (a) the track record of the CEBR (which is unsurprisingly poor), and (b) those who write these analyses and report on them should stop. And turn their attention to something more worthwhile; inventing a device for removing avocado stones or discovering new uses for butter, for example.
5. deeplyblue said...
Well, I said it was all how you chose to headline it. The Beeb has, since I posted above, featured the same report as the Guardian and the Express, only under the headline "Home values 'down 28% from peak'" - which though not news here, is lower than mainstream media have generally been reporting. They go on to say,
"UK property prices will have fallen by 28% from their peak before the market downturn ends, the Centre for Economics and Business Research (CEBR) has said.
The economists' group predicted prices would reach their trough early next year, but said there was little chance of real price growth until 2013. "
Which is actually quite bearish, when you think about it.
db
6. mdmick said...
What's annoying is that when, surely inevitably, things do improve, they'll say, "We told you so all along!"
All these people dreaming of their BLT portfolios...
7. Timmyt said...
The fact that we have a "Centre for Economics and Business Research" with such an appalling track record of predictions is actually far more newsworthy than one of their predictions. Sad fact is that the the Express get to sell more papers by printin this drivel.
8. Joe J said...
Can't people understand that the "bubble" in house prices was the abnormality - not what's happening now.
That's pretty obvious isn't it?
Everyone should be celebrating the fact that the market is managing to correct itself even in the face of massive government interference.
To talk of "slumps" shows that these fools still believe the bubble years were normality.
9. bidin'matime said...
see also House prices will have risen so much by 2020 that homeowners will be able to take a year off work on full pay funded by the equity in their property, claims a report from the Centre for Economic and Business Research
10. cyril said...
This Centre for Economic and Business Research sounds like some sort of official organisation but it isn't. The news release is just to get its name in the paper. It would do better to predict the return of Princess Diana. Now that would be a story.
11. charlie brooker said...
Centre for Ramping And Propoganda
(CRAP)
12. martin said...
And pigs will fly, i am by no means suggesting anything here but ............ swine flu.
Sorry, couldn't resist.
13. ah-so said...
So they predict a rise in house prices to £170,000 by the end of 2013. The only reason given is "undersupply", but warn that prices will stay low due to the "sluggish economy".
Sluggish economy?? Did I read that right or is that the biggest understatement of all time? The economy is on the verge of collapse, borrowing is going up to levels never seen before, taxes are rising, record numbers are being made unemployed, repossesed, bankrupt and the best they can describe it as is "sluggish".
The Express is such a joke.
14. alan said...
"The Bank of England is expected to keep its base interest rate on hold at 0.5 per cent this week".
But....what about in 4 months time?...what then?
Suppose rates go up by (say) 3%; what happens to those new buyers and all those folk on trackers? The article seems irresponsible to and unbalanced to me.
15. nomad said...
"centre for economics and business research ltd is an independent consultancy with a reputation for sound business advice based on thorough and insightful research.
Since 1992, cebr has been at the forefront of business and public interest research. We provide analysis, forecasts and strategic advice to companies of all sizes, financial institutions, government departments and agencies, trade bodies and the European Commission.
cebr is recognised as one of the UK's leading independent commentators on economics and business trends. Our forecasts are used by a diverse audience of business people, policy makers and journalists; even the Treasury publishes our predictions for the UK economy."
I wondered if they were a private organisation or were funded - it looks like privately funded but the above quote on the website introduces them. Enjoy!
16. nomad said...
I'd like to see some updated forecasts on the Predictions Table on the Home Page of this website, they are looking quite dated.
I've no objection to the noted experts changing their minds every six months as long as I am able to consider their current thoughts.
17. shining wit said...
Correct me if I'm wrong but didn't this poor excuse for a newspaper use this very same CEBR 'research' on their front cover only 3 or 4 weeks ago? Who on earth buys this rag? Oh yes, sad sickos who want to see a dead princesss on th cover every other day.
Move over Dead Diana, the night of the living dead property price nonsense is the new black !
What we all have to remember (and some people on this blog actually have admitted to) is people are ACTUALLY buying properties now and will throughout the crash. We may all be getting crap returns from our money in the banks but throwing yourself into negative equity of blowing your 30-40% deposit by purchasing a house now is happening and it's always happened, in every crash.
If it's not obvious now, with the banks all but insolvent and nationalised and a governement in denial that the coming election will see them slaughtered, that this will be the biggest property crash of modern times, and that the recession will prove even longer than it would've because of misplaced Keynesian monetary policies, then go ahead, buy a property that is currently going to fall buy at least another 30%.
I look forward to the day that the numpties in this country stop buying rags like the express, mail, mirror and sun. I fear I will have to wait till the waters rise and the bohemeth cometh !
18. shining wit said...
nomad @ 12 said.....
"I'd like to see some updated forecasts on the Predictions Table on the Home Page of this website, they are looking quite dated."
You have to think about the owners of this site and what their objectives now are !!
19. mark wadsworth said...
Apparently, Princess Di was seen alive only hours before she died.
Which is about as relevant as this coverage of the CEBR 'report'.