Wednesday, Jul 08, 2009
Down 0.5% in June
BBC: House prices 'fell 0.5% in June'
Well, that's urinated on those green shoots.
Posted by doomwatch @ 09:35 AM (2568 views) Add Comment
34 Comments
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1. paul said...
You can tell there is desperation in the air amongst VIs when they start ignoring the headline figure and talk about 'underlying trends' instead.
They never talked about 'underlying trends' when house prices were rising. Maybe they should have.
2. mrflibble said...
Earlier than expected, thought both the Halifax and Nationwide would have been positive this month.
It will be interesting to see whether we stagnate from here or start to break lower again.
3. hpwatcher said...
HAHAHAHHAHAHAHAHAHAHAHAHHAH
The under-lying trend is definitely DOWN!!!!
4. mark wadsworth said...
I know it's bad manners, but I will do this bold italics uppercase anyway:
SPRING BOUNCE OVER! BACK ON YOUR HEADS
There. I feel better already.
5. inbreda said...
I'm with Mr Fibble - but I do think that the spring bounce will not relate to a single upward movement - I think the indices will be "a bit all over the place" until October/November at the earliest. Then I think they will head consistently and strongly into negative figures again.
6. bluebeach said...
This country is so so reactive over House price surveys... take the speculative element out of it and life would be so much better for all.
I just want a fair priced roof please !!!!!
7. Nileypie said...
"0.5% last month, partly reversing a large 2.6% rise in May"
Haha! Straws. Grasping. (I love how amnesia sets in when it comes to all those large falls prior to that one "large rise" in May)
8. mark wadsworth said...
Furthermore (and I hope I beat Ana Lytics to this), according to sheet 13 of Halifax historical house price data (all buyers, non-seasonally adjusted) ...
WE HAVE FINALLY GONE FIVE-YEAR-ON-FIVE-YEAR NEGATIVE!
Again, apologies for the bold italics uppercase but this is a big day!
9. mark wadsworth said...
oops, or try this link.
10. sceneclub68 said...
Some vintage journalism in the last few paras:
"However, there seems little doubt that housing sales are picking up, stimulated by the very low level of interest rates. Completed sales in May were at their highest since October 2008, according to recent figures from HM Revenue & Customs."
-- As I remember, October 2008 was hardly a boom month for sales levels, which makes this statement seem a little disingenuous.
"And mortgages approved for house purchase but not yet lent - traditionally a good indicator of near term trends in sales - are also rising and are currently 10% higher than a year ago, the Bank of England has said."
-- Clutching at straws?
"'Supply, or rather the lack of it, is the major driver of the current stabilisation in house prices, although there is also a discernible rise in demand,' said David Smith, of property consultancy Carter Jonas."
-- Rather like saying I think England will win the Ashes, although I think Australia will win the Ashes.
"'The housing market has started on the road to recovery, but it's going to be a long one,' he added."
-- Understatement of the year?
I often wonder whether this sort of journalism is simply ignorant and sloppy, or whether it is actively and consciously mendacious.
11. peter_2008 said...
I wonder whether Nationwide customers are more middle class whereas Halifax's tend to be more average Jo? I know Nationalwide focuses more or less on the southern counties markets; and Halifax has a nationan wide coverage, slightly biased towards north.
So does the difference mean that while snobs fighting over each other to splash money away, the rest of the country is struggling to cope? Hmm, sounds exactly what I see on the ground!
12. 51ck-6-51x said...
inbreda said "I think the indices will be "a bit all over the place" until October/November at the earliest"
I concur - indices on any asset work better during periods of higher volumes, especially if the asset class is not homogeneous ( since one must attempt to normalise the different assets being traded ); when volumes increase will have more reliable monthly ticks.
It would, of course, be nice to be able to see breakdowns by such things as region ( preferably with multiple grain sizes ), house type, bedrooms, etc. but that is unlikely in the near future - although there is some regional breakdown in other series, like Nationwide and Acadametrics ( which will publish on Friday I think ).
13. 51ck-6-51x said...
Note that this latest house price news on the BBC has not made it into the "LATEST HOUSING NEWS " section yet but there is still the headline "House prices 'rose 0.9% in June'", from over a week ago with the Nationwide source. Odd that ;p
14. need-a-crash said...
@11. Peter_2008
I was also under the impression that Halifax had more of a north bias whereas Nationwide was more southern and as you say this does ring true from what I see on the ground. Can anyone corroborate this?
In the long run though, Halifax & Nationwide have always run the same course so I would expect them to converge again fairly soon.
15. Jack said...
The banks are insolvent and need house prices to rise to reduce existing long-term liabilities, massive defaults will cause further systemic failure to banking structures. By returning the banking business model to profitability government gets it money back and the status quo continues; unfortunately securitization is the only way they are going to get lending going again at the levels needed to support the existing prices. Remember this is a credit crunch, a contraction in money supply globally. Prices will fall further in real terms, but inflation may have an impact upon the actual price tag paid in the future.
Look UK Commercial property has fallen 44% so far, what is to say that this will not happen to homes.
The fact that most people should borrow only 3.5x income illustrates the disconnect between these two positions - that of the banks need to lend large sums to make a profit, and individuals to pay a smaller percentage of income on housing.
Yes demand plays a part - the UK has a need for more housing but this should be part of a structured plan, and is partly driven by greed and ineffective taxation on housing, regional demand differences, immigration and an aging population. We could all go back to renting, but the property structures and governance around this, is simply not there to support the demand levels. The current government had 10 years to address property issues and failed, whether or not the other main parties can fix the housing problem and remove speculation from it is another question that has yet to be answered. Equitable housing is probably a pipe dream for the masses using the current governance and banking models.
16. techieman said...
http://www.youtube.com/watch?v=Hk9iP3-SJsM
17. gone-to-colombia said...
Not unexpected but lovely to wake up and find this news.
The crash back on course.
18. Anon said...
Interesting theory.. what figures is this based on? I just looked at the land registry. It's down, but not by that amount.
19. techieman said...
I think 51ck-6-51x is right, you cant really take anything from one months figures esp when its based on so little volume and could be skewed one way or the other. Although the bear may very well be reinstated, i think we need to see more evidence before we can reach an absolute conclusion that it is.
20. monty032 said...
Excellent spot, Mark Wadsworth at no.8. House prices according to the Halifax are now lower than they were five years ago (today - 510.4; June 2004 - 514.8 according to the "all houses - seasonally adjusted" series I got from Datastream. Strange that the Halifax seem to have forgotten to mention this.
21. str 2007 said...
Well done Mark for noting the 5 yr on yr.
Wish it was in South Hampshire though.
I can't quite believe what I'm seeing down here, but the market is on fire, houses going within a week. Even the rubbish is selling.
From what I'm seeing you can re-inflate the housing market apparently.
What the long term cost will be remains to be seen.
22. mark wadsworth said...
@ Monty, STR, thanks. Round my way (London/Essex border) we are nowhere near back to 2004 prices, but certainly back to 2005 or so.
And stuff is not 'flying off the shelves', houses are on the market for months and months, and a lot of 'sold' boards are taken down and replaced with a 'For sale' board again. And then a 'To let' sign appears next to that a few months later.
23. Cg said...
What happened to all those predictions of house prices to react 10 times average salary ?
24. 51ck-6-51x said...
str2007 - one can re-inflate a punctured balloon with enough air... but one may run out of breath - let's see what happens (a) between now and the general election; and (b) after that!
RE: FOR SALE / SOLD BOARDS:
- I am seeing loads of EA signs nearby which look like sold signs, and have the EA name on, but on inspection are advertising their [ supposed? ] summer fêtes. Hilarious.
25. ana lytics said...
Mark W @ 10.18
I think that warranted Bold, Italics and Uppercase.................! Although personally I would have chucked in an underline too! Maybe changed the font size up a tad, perhaps some red colouration too............ hmm........
Nah, it's good news and may permeate into some of the thicker skulls out there........... if the media carries the story widely of course.........
You reckon all of the Bull Trappers are "in" the market again yet? We've got to be close........... Summer hols coming up, normally low activity, the remainder may jump in in the Autumn perhaps, but I dare say we're just about ready to start a run of another -10% over the next year or so......... Interest rates up towards the end of the year perhaps......... my IF cash ISA just went up from 0.60% to 2.75% in one hit (which was handy as I was just about to transfer it all out!)........
26. mark wadsworth said...
@ Ana Lytics, I don't know what the html tag for underline is. Is it just < and then "u" and then >?
27. str 2007 said...
666
Re: running out of air
There doesn't seem to be much evidence of them running out of air (money) at present. In fact aren't they simply printing more money to fund the housing market. (IE taking bad money out of the system and producing new - so to speak).
What I'm surprised at is the international community don't seem to bothered about this practice of ours either, perhaps they're looking on and seeing it as a way out ?
Something I have also noticed since my recent absense is the availability of 90%LTV mortgages at decent (sub 5%) interest rates. Will this availability bring in a new/backlogged raft of FTB's to give some support at lower levels of the market ?
28. Cg said...
Where I live in Middlesex, there are plenty of properties which are still vacant!
What is happening?
29. drk said...
In my part of West Sussex block viewings are back, above asking price offers are v. common and Bank of Mum and Dad is thriving. A mortgage broker I spoke to last week said 5x salary multiples and IO mortgages still commonplace. For 3 years I have been renting here and at best, only 5-10% reduction in prices in 2008 but now they are coming on at 2007 prices....and selling. I am rapidly losing faith in HPC. Ever had the feeling you've been done!
30. house said...
@25 drk said
You are right. The prices in the South appears to have gone back up to 2007 levels. The house price crash at present appears to be a dream. People now feel that things are going to be OK and that prices will even start rising again in 2010. I do not advocate that house prices should go up which I feel is bad for everybody. Really a starter home should cost around 100K but appears to on the market for £150K.
31. letthemfall said...
I live in the south (Surrey) and prices, though still high, are certainly not back to their heights. There are pockets where cash buyers will keep them up, but this cannot continue for ever when prices fall generally because buyers move away as other areas look better value. (I suppose these arguments apply less to footballers who don't spend much time thinking about value). It does look as though this adjustment of house prices will be a long one, partly because many people still cannot believe houses are not personal gold mines, but also because the banking crisis has forced interest rates to record lows. But this can't continue for ever.
32. tenyearstogetmymoneyback said...
This country is so so reactive over House price surveys... take the speculative element out of it and life would be so much better for all.
With lots of hindsight it is not at all surprising. During the boom the question I kept asking myself was why the "property tycoons"
i.e. anyone with a house actually bothered going to work. As we know lots of people thought that if they bought a couple of BTLs they
COULD give up work.
What was new was the BTL element. Back in the late 1980s a colleague who was a highly qualified software engineer made more money
from his flat in two years than he did working for British Aerospace (real cash because he sold it and left).
Interesting to read about the 5 year negative. Look at my user name and work out how long it is likely to be before prices are back to 2007 levels.
33. tenyearstogetmymoneyback said...
p.s forgot to quote bluebeach on the first line
Bluebeach wrote "This country is so so reactive over House price surveys... take the speculative element out of it and life would be so much better for all."
34. Greenstar said...
i think house prices will fall 20% this year!