Tuesday, Jul 13, 2010
UK house prices not set to recover for another ten years
The Daily Telegraph: UK house prices not set to recover for another ten years, says PWC
The prediction seems about right. Looking at the long-term chart of nominal house prices, after each boom the bust takes one year longer than the boom period. The most recent boom lasted from 1996-2007. That means that nominal house prices will not start to rise again until 2019.
Posted by monty032 @ 08:03 AM (1009 views) Add Comment
5 Comments
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1. paul said...
Needless to say, the BBC and Daily Express will categorically NOT be featuring this important prediction anywhere in their media today.
2. debtfree said...
Doesn't mean they will come down in price though, only in 'real terms' - which suggests an inflationary outlook where the purchasing power of your money is eroded.
3. monty032 said...
The Halifax index I'm looking at is in nominal terms, not adjusted for inflation. It peaked at 227.4 in May 1989. It didn't start rising consistently again until October 1995, 6 1/2 years later. In October 1995 the index value was 198.2, so a nominal drop of 12.8% in 6 1/2 years. In real terms (RPI or wages) house prices fell by (33.8% or 38.5%) over that period. Of course, it couldn't possibly happen again...
4. Walloon said...
"A second report says prices could plunge by 25 per cent over the next three years, wiping nearly £40,000 off the average house price. "
Right. And how much does it cost to rent a home for 3 years?
I have just spent 20k renting a family home for the last 2 years after selling my Edinburgh flat in 2008. In that time we viewed over 20 houses in Bearsden, Glasgow, and were outbid (most bids 10% above valuation) 5 times. We were successful 3 months ago and got somewhere for 4% over valuation.
The problem seems to be that for most of us who have tried to ride this "house price crash" to our advantage have been scuppered in the following ways:
1. Renting a family home in a nice areas with good free schools is *very" expensive. 1000 quid a month is minimum
2. Whats the point in doing 1 if the HPC falls are muted due to macroeconomic intervention?
I would be extremely unhappy about my situation, had I not used the proceeds from my flat to buy a bunch of mining and bank shares in 2008.
Waiting for a HPC IMHO is a waste of time compared to other "asset" opportunities out there. And I guess we'll have to wait and see if thats the truth.............
Meanwhile, thanks to XTA, KAZ, DGO and BARC, I now own my house outright........
5. mr g said...
Oh dear, that does not augur well for HPC!
The "experts" forecasts are usually wrong.