Sunday, May 03, 2009
Yet more desperate ramping from a paper that should know better
Guardian: Thinktank says house prices will start to rise again next year
CEBR previously predicted 35% falls even if approvals doubled, British Bankers Association confirmed mortgage approvals fell in March despite the endless ramping. Search for CEBR 10% on Yahoo link says " EXPECT THE HOUSING MARKET TO CRASH SOON", a document dated March 2009 about the collapse of tax revenue . CEBR predicted 40% falls if approvals didn't double.The article is somewhat garbled saying: "The CEBR is forecasting a fall of 28% in prices from their peak – the third quarter of 2007 – to the trough, which it thinks will come in the first three months of 2009." Which you must admit is a bit odd as we are now in May! But continues to say they predict a further 8% fall this year, total 36%, that is £300000 property £192000 , but they seem to have left that bit out of this article
3 Comments
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1. quiet guy said...
In fairness to CEBR, they may prove to be correct. I'm not advocating buying property but if we can avoid a currency crisis and maintain artificially low interest then it seems just about possible that CEBR's predictions will come true - prices rise in nominal terms but drop when adjusted for inflation. In a rentier society, those with property will trade amongst themselves and the rest will be frozen out of the market.
Of course, the risks for those who wish to dabble in property now are huge. Until we know how our economy will progress past the current problems, buying property looks like a big risk to me. The worst case scenario for those building up property 'portfolios' is horrific.
2. nomad said...
"The CEBR is forecasting a fall of 28% in prices from their peak – the third quarter of 2007 – to the trough, which it thinks will come in the first three months of 2009."
I read it that they mean -20% from peak to end of 2008 and another -8% in the first three months of this year taking us to the trough. Down 28% in total, not 36%.
Either way, wrong!
They are dealing with small quantities of deals to assess trends - and ignoring the brief periods of levelling off, or even increases in prices that occur during any downturn.
Late this year houses that can't find a tenant will be put back on the market with the instruction to sell at any price. At the same time interest rates should be turning sending buyers back under cover. Not to mention still rising unemployment and reducing salaries. Crash still to come!
I'm looking for another 12 month rental.
3. mander said...
House prices remain insanely high and unsustainable if tied to the people’s earnings . The Thinktank (CEBR) deliberately did not analyze the banking activity related to housing boom and also the look of the global economy. CEBR takes for granted a so called shortage but let’s not forget that genuine buyers (FTBs) have been completely alienated and manipulating house prices ( feudalizing the society ) will not work again considering the American people reaction to this bubble and because of the new global economy.