Friday, Jul 16, 2010
A surfeit of bear food
Daily Telegraph: House prices 'to crash 20pc by 2012' as Budget bites, says Capital Economics
House prices will crash more than 20pc over the next two years as a result of Government spending cuts, tax rises and a surge in unemployment, according to a leading economic forecaster.-- Delicious !
Posted by gone-to-colombia @ 08:30 PM (1135 views) Add Comment
8 Comments
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1. clockslinger said...
Capital Economics, eh? Who could doubt them. A sure fire signal it is time to buy.
2. markj69 str05 said...
'House prices will crash more than 20pc over the next two years as a result of Government spending cuts, tax rises and a surge in unemployment, according to a leading economic forecaster.-- Delicious !'
Er, no. House prices will crash because they are grossly over inflated. The factors above would not have caused such a dramatic effect had governments governed and controlled the 'property boom' beast.
It's about time government, EA's, finacial institutions, and most of all society in general opened their eyes and admitted that prices are too high! Wake up and smell the coffee. Everyone had a great party on the back of rising prices, now we have to reap what has been sown. The product of greed and negligence.
Things are not going to improve until a correction ocurrs. I guess i'll just have to wait a little longer for the denial stage (Or 'sweep it under the carpet reaction') , has passed.
3. Sirmungo said...
groundhog day at Capital Economic
4. The Dane said...
The average house price rose from 1987 to 1997 by 33.3% over ten years.
From 1997 to 2007, the AHP rose by over 245% !!!
So what if they crash by just 20%?!
Does anyone seriously believe that would then leave the Average house price affordable?
Of course not.
5. Redbaron51 said...
@ mark: I do agree with you, however people think that the only way to invest is on properties, i.e., boom in BTL, etc. If only people understood that shares in solid companies (these days a bit difficult to define "solid") are the winners in the long-term
6. tenyearstogetmymoneyback said...
Capital Economics (just like the people on this site - myself included) have been wrong so many times,
they have to be right at some point :-)
I guess their problem so far is that they try to apply rational analysis to the numbers. Meanwhile the majority of the population and media behave like Gamblers who having won ten times in a row on Roulette think they are on to a winning streak.
7. house said...
If the rules of finance were played by the book without government intervention totally then we would have had a drop in property prices. I have been proved wrong with the events of last 3 years and I do not think anybody can predict what is going to happen anymore. One think is sure inflation will slowly erode the real value of increases. Therefore, yes there may be some falls but it will not be dramatic. The only consolation for everyone on this site is, maybe, that the prices are not really increasing and IMHO I do not expect the prices to rise for some time to come.
ReCaptcha: damasked bank
8. Eternal Sceptic said...
In a rational world, house prices would have already fallen. The only question to be answered is how many more ruses can government apply to stop the retreat becoming a rout. I would suspect all the available ammunition has been used. But so long as bankers get their bonuses, all is well in the world.