Sunday, Jul 25, 2010
More bear food
The Independent: Was the last fall in house prices just a warning?
House prices started to fall in autumn 2007, more than a year before the government had to rescue HBOS and Royal Bank of Scotland and before the rest of the economy sank into recession.
Now there are widespread fears the property market is about to turn downward again, anticipating a double dip in the wider economy.
Theysuggest 20% falls, and the rest. Just use Property Bee and see the falls.
Posted by gone-to-colombia @ 03:49 AM (1937 views) Add Comment
14 Comments
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1. happy mondays said...
Roger Bootle predicts a 30% fall over the next few years & this it what pricewaterhouse say -
At Pricewaterhouse, Hawksworth remains gloomy for even longer. He thinks there is a 70 per cent probability that prices will not return to their peak levels in real terms even by 2015, and an evens chance of prices still not reaching 2007 heights, adjusted for inflation, by the end of the decade.
Ju predicted that honey would be hit by massive inflation & a 70% drop in houseprices..
I say - Never catch a falling Knife!
2. estrader said...
“The new Government is being blamed for the reverse in the market. Not only has demand to buy property been reduced by an austerity package that puts jobs at risk and which will raise VAT, the abolition of HIPs – the Home Information Packs sellers had to buy – has greatly increased the supply of properties on the market.”
As always, it’s pure fundamentals when house prices are rising but ‘somebody’ is to blame when prices are falling. As far as housing ‘experts’ are concerned, the only way to economic prosperity is to keep house prices rising by offering mortgages with 0% deposit and exponentially increasing salary multiples. Forget the fact that two banks had to be rescued by the Government a year or so after one of the greatest property booms in recent history because that is not relevant, at all. Just keep those house prices rising and everything will be alright again apparently.
3. growler said...
At the end of the day, if the salary doesn't rise, then either you have been given money from out of the blue or you are borrowing more to buy property. That means you MUST have less disposable income. Eventually consumer demand for other goods and services must fall as the proportion of disposable income paying for property increases.
Interesting to note that insurance fraud is at its highest level. This is an example of "money from out of the blue". When all these max out, it can only tank one way.
Just wait and see
4. house said...
The real test of property price drop is when the supposedly FTB properties which at present in my area is on the market from £130k. When this drops to say £100k then there is a real drop otherwise we are whistling in the wind. The drop in prices are properties at the higher end which are overpriced anyway. Their drop in asking price does mean anything. Does anybody dispute with this statement ? Any comments on this.
isi homeric
5. mick rupert said...
The next tranche down is becoming proper mainstream now. I suggest folk get onto estate agents with some aggressive doses of reality!
6. brickormortis said...
"Prices have risen 15 per cent since February last year."
NOT IN SHROPSHIRE THEY HAVEN'T. More like slid 5-7%.
7. brickormortis said...
"but Shipman is working on Rightmove's next confidence analysis...."
Does he mean "Shipside"?
"A loan of 80 per cent of the purchase price becomes an 88 per cent loan if the property value declines 10 per cent."
Would that not be 89%?
8. smugdog said...
"Their drop in asking price does mean anything"
"Does anybody dispute with this statement?”
Well House, I do actually, it's meaningless.
9. techieman said...
hey smuggy.... regardless of the grammatical inaccuracies of houses statement, what is your current view? is all this news rubbish or do you see a price contraction going forward? I am genuinely interested in your view here as an important indicator.
10. house said...
Hi,Smugdog
The statement should have read "Their drop in asking price does not mean anything" ie. the higher end of the market. I did not think people on this site were over concerned with how the statements were constructed as long as the mesage was conveyed. Obviuosly it matters to you as it have touched a nerve. I will reiterate that the only price drop matters are the FTB properties as this create's a market.
Yes, smuggy are you going to answer "9.techiemans" question. Good luck Smugdog.
11. peter said...
Why should anyone 'fear' that house prices will return to sane levels?
12. Smugdog said...
I agreed with some chap in the press this weekend. Three main dictators in play:
House price to earnings ratio - not pleasant for many I must say. It must level out surely?
House price inflation v's equity investments and/or other safer bets/shelters
Medium term mortgage payment levels. Ah, this is the stumbling block and very much your Elephant in the corner.
If all three pointed south, then you may well have a done deal.
"Affordability has never been so good" so the masses are told.
Short sighted I'm sure, but hey!
13. smugdog said...
I agreed with some chap in the press this weekend. Three main dictators in play:
House price to earnings ratio - not pleasant for many I must say. It must level out surely?
House price inflation v's equity investments and/or other safer bets/shelters
Medium term mortgage payment levels. Ah, this is the stumbling block and very much your Elephant in the corner.
If all three pointed south, then you may well have a done deal.
"Affordability has never been so good" so the masses are told.
Short sighted I'm sure, but hey!
14. This comment has been removed as it was found to be in breach of our Blog Policies.