Saturday, Jan 16, 2010
Luckily, estate agents are there to help
The Times: Don’t trust the house price surveys
"What goes up must come down, right? Except, it seems, house prices. The gravity-defying performance of the housing market over the past year has left many experts baffled. How can prices keep moving upwards when unemployment has been rising and loans for first-time buyers have all but disappeared? Well, there are some credible economic explanations — the restricted supply of property being the one most widely touted. But perhaps it is also worth examining the credibility of some of the market surveys and indicators that are constantly churned out." Coming from The Times who have been accused of ramping by this blog, this article is a welcome change.
Posted by quiet guy @ 12:44 AM (1583 views) Add Comment
7 Comments
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1. mark wadsworth said...
That's Andrew Ellson for you. Until a year ago, he was firmly in the Home-Owner-Ist camp, but gradually he is seeing the light. A month or two ago he even muttered something about taxes on property values not being the worst taxes :)
2. phdinbubbles said...
"As first-time buyers tend to buy cheaper homes, there must have been a greater number of property transactions at the pricier end of the market throughout the 2000s, driving the average purchase price of each transaction and, therefore, each house price index higher. "
Don't think so - aren't the two indexes weighted for different categories of property? If more sell in one category, it shouldn't distort the index. However, if the price in one category changes significantly, then it could change the index, masking the fact that prices may be stagnant elsewhere (but I don't really know how they're calculated, so just guess-work).
"Sadly, it is impossible to judge the full extent of the distortion in 2009 because neither the Halifax nor Nationwide will release figures showing how many transactions their surveys are based on — and crucially, the proportion of borrowers who are first-time buyers. "
You could look at how well the Halifax and Nationwide tracked each other before 2009 and then compare it with 2009:
3. paul said...
I think you'll find this is an old trick the Times uses. An obscure corner of the offices editorial team releases a sensible article about property only to trounce it with a front page ramping article come Sunday. Wait and see.
4. stillthinking said...
I think the main fiddle must be to exclude prices for repossessions, as auction sales are not considered to be fair market value.
5. dill said...
I find myself having to ask this question of respected contributors to this blog. Could there be a case for Tory affiliated media to spin 'negatively'? House price indices going negative in the run up to an election can only be in the opposition's interest. Thoughts?
6. dill said...
Who cares anymore:? Back to a 1960's rentier class system it is then.
7. Jayk said...
"Coming from The Times who have been accused of ramping by this blog, this article is a welcome change."
As if 99% of the people on this blog are the appropriate, unbiased and balanced arbiters of such a matter.....
Christ: anyone who refuses to accept that "another" (sic) crash of at least 50% is just around the corner is called a property ramper by people on this blog. I once pointed out that a 20% average fall over two years in the "first" so-called crash (a figure heavily skewed by the collapse of the market in flats in the likes of Leeds, Manchester, Thamesemead etc, by the way) could not be called a crash at all and was not that big a drop in the great scheme of things - and I was immediately called a ramper.