Friday, Jun 12, 2009
Not that one
Property Week: Rising house prices swell Allsop's coffers
Allsop’s two-day residential auction, held in a back-to-back marathon sale last week, reflected the continued rally in house prices.
The auction house’s sale rate remained stable at 86% – down one percentage point from its February sale – while the total raised increased by 11% to £46.1m.
Murphy said: ‘There seems to be a growing consensus that house prices are no longer falling – many believe that they are increasing. This is being reflected in the room. A lot of potential buyers went away disappointed because prices were moving significantly above the reserves. There was definitely a mood of recovery in the room.’
Posted by little professor @ 01:17 PM (1463 views) Add Comment
16 Comments
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1. hpwatcher said...
Are you saying that the HPC is all over then little professor?
;-)
2. mander said...
Ha Ha Ha, Comedy club still busy with public relations...
3. Rk said...
"total raised increased by 11% to £46.1m ... the sale contained more lots than February’s"
So that 11% increase is meaningless.
4. general congreve said...
What we are seeing is the last bit of cash being sucked out of a few gullible suckers left with any money. Namely those that have saved and saved over previous years only to see appreciating house prices always escape their grasp. Now with these modest price falls from 2007, fear, which is instilled by all this main stream media nonsense of green shoots, is driving them to buy, in case they miss the boat. Once they have bought, then what? There's no FTB's who can get a mortgage out there, without them it's all over. This so called price bounce is a last gasp for air before the market sinks beneath the waves of doom!
Last November we had the biggest financial crisis in a century, no bones about it. All of a sudden it's about turn on the mainstream media and the recovery is beginning! Total bull. There was a BBC story posted on here yesterday talking about whether the recovery had started. The comments told gave the real picture, proving we are only at the beginning of an unmitigated financial disaster.
I notice the old Woolworths property, located slap bang in the middle of my relatively prosperous town, is still vacant, with no signs of any other retailer making preparations to take over this prime bit of real estate. Not to mention 4 other vacant shops no one wants. A picture painted all over this country. There's your recovery.
I pity these poor suckers buying back into the house price inflation myth - they will get badly burnt.
5. need-a-crash said...
@3. Well said.
Transaction volumes are still low and in any Spring there will alway be some people with money, rich parents, newly married etc who will buy and as no-one bought last Spring we have two Spring's worth this year, giving us this little bounce.
6. Lukeskywalker said...
This must be the bump on the downslope, the return to normal.
7. tudorian said...
@3
Everything thing that you mention is being echoed in my corner of the country.
There were a very few good quality potential homes on the market a few months ago...these have been snapped up (judging by the newly erected sold signs) They are being replaced on the market by the stock of houses that didn't sell over the last 12 months and more house to flats conversion.
The number of ftb's is low, and with current job losses, the number is getting lower all the time.
As soon as the public realise that house prices are likely to drop further the estate agent / VI charade about green shoots will be exposed. it will now only take a small amount of negative press / information . The public appetite for house price inflation is almost sated. The feast is nearly over, what we're seeing now is the last wafer thin mint.
8. This comment has been removed as it was found to be in breach of our Blog Policies.
9. will said...
Auction rooms make me laugh. I once bid on a house during the boom, the guy who out bid me and won the house was a brother of a freind of mine. He was declared bankrupt at the end of last year and has lost the house and all the renovations he put into it. Point is I wouldn't trust anyone buying at an auction as a guide to where house prices may be going. Just look at the stupid auction programmes on telly. Fools the lot of them.
10. inbreda said...
I think Will is right - I think the best time to buy at auction is between fear and desperation in the chart above.
So not long now then!
11. little professor said...
1 - hpwatcher
I'm sure HPC is not over. In fact, I think we're just getting started. The impact of the mass redundancies is yet to take full force - unemployment is set to hit 3million later this year. Also the banks which have been bailed out by the government have been reluctant to pursue repossessions in recent months, but there is only so long they can let people build up huge arrears with no hope of ever paying off the capital; this combined with surging unemployment will lead to a tidal wave of repos later in the year, forcing prices down further.
Meanwhile mortgage costs are stubbornly high despite record low Bank of England rates; back when the BoE base rate was ten times higher than it is now, average fixed rates were only a a couple of percentage points higher than they today. There is only one way the Bank of England can go, especially with the spectre of deflation being proved to be a farce; this will lead to high single-digit base rates by next summer, pwning all the "I'll just rent it out until the market recovers" lot who won't be able to cover the interest payments with the rental income achieved. Also, with so many people currently going on to the SVR rather than fixing because it is cheaper at the moment, there are a far higher number of people who will be totally exposed to huge increases in their monthly outgoings once rates start to rise.
I expect the second leg of the HPC to begin early this autumn, and a return to 20% year-on-year declines by next summer. I think we have another 40-50% to fall in real terms, including the inevitable overshoot. This has been the biggest property bubble ever, and we will have the mother of all crashes. It is not over, not by a long, long way.
12. peter_2008 said...
The surprisingly low repossesion number is simply because GB effectively forced banks to delay the repossession by 6 months. THAT time is running out. The banks have already started to hike rates, this will inevitablily increase repossession.
Once GB is gone, those reckless ones will be like brats without their rich parents. They are sitting ducks.
13. hpwatcher said...
" 11. little professor
Very, very nicely put.
14. Greenstar said...
this chart above is based on last reccessions in 30 years but this is a completly diffrent reccession if you read about what happened last reccessions you will see this.i think this is end of the boom and time to buy guys...
15. Greenstar said...
this is a compeletly diffrent recession then others.this chart above based on last recession.if you read more about what happened last reccession last 30 years you will see the difference.i personally beleive this is end of the bust.and right time to buy.10 years later people will look and say i wish i bought in 2009.I think banks will start relaxing lending by end of summer.
16. Clockslinger said...
I know this is more VI stuff but there are a lot of similar figures showing the same trend just now. Is it a bull trap or has all the free money really worked? If it has then rapid inflation should really be the result...and probably just the beginning of our problems. Would that mean property prices would rise or would that be unlikely in a truly inflationary environment where the cost of basics are increasing so rapidly there are very few who can afford to stoke up HPI with extra borrowing? Wouldn't rapid inflation make borrowing more an attractive prospect,however ?Will job insecurity mean lower wages? Am I on the turn from total bear to lightweight bull...no I don't think so, but still... Can anyone clarify succinctly and with some reasoned arguments where this is going? Finally,isn't it a bit sad that this F3*k1ng country, and our generation, myself included are so obsessed with this s#1t. Please. This is my one visit to the planet as far as I know.