Sunday, Aug 01, 2010
A bold prediction for no double dip and more price increases
Mail: House prices are heading up, not down, say experts
''Doom-mongers who are predicting a 'double dip' in house prices have got it wrong, experts said today. The Centre For Economics And Business Research (CEBR) said prices will increase 4 per cent this year and continue rising until 2014, mainly due to a shortage of homes in the UK and low interest rates.''
''....many commentators are purporting that the minor correction in house prices over recent months is a prelude to an even steeper decline that will engulf the housing market over the coming years......Those forecasters projecting a double dip have got it wrong.''
Posted by hpwatcher @ 06:23 AM (3904 views) Add Comment
34 Comments
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1. paul said...
And these forecasts are based on what economic data or reasoning exactly ... ?
Oh, none.
2. Kirsty said...
they are based on what the V.I`s want to happen. no mention where the money is coming from.
3. righttoleech said...
Trust the Mail to succeed in tracking down these microcephalous rampers!
4. Mad_maxx said...
I've submitted a response to the article, but they appear to be moderating them in advance. Here's what I put;
Personally, I will be very glad to see this. Having been born in the 1980s, by the time I had established my career and been in a position to have a mortgage, house prices had increased massively.
The whole system is a scam, I was looking into buying a house during the last dip (2008). One house I was interested in was on the market for 3.5 times the price it was sold at in 2001 (according to land registry figures)
The sheeple need to start realising that House Price Inflatio benefits no one but the bankers...unless you intend selling your house and not buying another! one,
5. uncle tom said...
Do these twits, sorry CEBR, ever try to work out how many people are priced out, and how that will affect the market?
With the rental sector drying up, and rents rising sharply as a consequence; those priced out of buying will be increasingly priced out of renting as well - unless of course they share a house, which more and more are doing; thereby reducing demand..
6. estrader said...
The experts say that the other experts are wrong and house prices are going up, until they stop going up, that’s when the other experts step in the picture and say that the other experts are wrong and house prices are going down, until they stop going down, then the other experts step back in the picture again...etc.
Anyone who listens to 'experts' will get exactly what they deserve.
7. techieman said...
The daily show montage of how "right" "experts" can be:
First 25 secs says it all really!
http://www.elliottwave.com/club/analyst-videos/ewi/default.aspx?page=mw07-20-10nicofinal&title=The%20Daily%20Show%20Clip%20March%202009
Hope that works!
8. enuii said...
Over 20 years ago I was warned by an old engineer whose nickname was 'wheetabix head' due to his wayward hairstyle that an expert was a 'drip under pressure' and you should never assume anything because that could make an 'ass' out of 'u' and 'me'.
Wise words I have always remembered strangely enough!
9. icarus said...
These people know that interest rates will remain low for the next 4 years. No need for the BoE's monthly Monetary Policy meetings then.
Re the 'shortage of homes' playing a major part in supporting house prices, another expert wrote recently "The lack of new housing supply is a very slender reed on which to hang hopes of higher house prices; even in boom times, new houses are a very small proportion of the total housing stock". (Philip Coggan, posted here 27th July 03.37 pm )
10. Crunchy said...
Where did the term 'suckers rally' originate.
The higher the more riskier. A constant investment lesson that has already been played out.
Go ahead I say, but please on the understanding of no more bail outs from the future taxpaying generations and savers, otherwise it
starts to look like a clinical future enslavement progamme.
11. cynicalsoothsayer said...
Prices can do anything in a moribund market.
12. mark wadsworth said...
It's Blue Socialism writ large, isn't it?
"prices will increase... mainly due to a shortage of homes in the UK and low interest rates."
Q: Who restricts the supply of (new) homes and ensures that owners of vacant or derelict sites are not encouraged to develop them?
A: The government (acting under pressure from local NIMBYs).
Q: Who is rigging the banking system so that interest rates stay low?
A: The government (acting under pressure from 'hard pressed homeowners')?
Q: Does any of this have anything to do with small government, free market liberalism?
A: Nope.
13. charlie brooker said...
What were the CEBR saying in 2006?
captcha : repress on
14. icarus said...
estrader @4 - Experts are like nappies :- they need to be changed often - and for the same reason.
15. the number cruncher said...
My wife & I had to endure the Daily Mail views of one of her 'walking group' friends sounding off "how it was 'dole scrounging' immigrants robbing us of decent homes and that house prices are always going to go up". I tried to counter her augment that it was to do with money supply and how housing was a under taxed fixed asset. She thought about if for a few seconds then rejected it and continued with her tirade of self righteous 'Alf Garnet' invective. I would of pursued my line of reasoning but it would have embarrassed my wife, but I was astounded by the number of people in the group who did not understand the basics of increased money supply and its effect on under taxed fixed assets.
I still think it is the availability of money to lend that ultimately determines house prices. As soon as the Government's guarantees and loans to the domestic property market lapse we will see the proper crash. Unless they cut public spending to the bone and increase taxes to fund mortgage liquidity... Oh bugger that's just what they are doing!
MW I do support a lot of what you say - but I would like you to point out that it is is perfectly reasonable to have a large government based on the free market and liberal ideals. I feel very aggrieved that the free market is something claimed by those on the right. Most of the right wing press use the concept of the 'free market' to achieve its exact opposite, a monopolist oligarchy.
16. will said...
CEBR - Their website points out that they produce reports for the Government who pay them for the reports.
A pet shop owner was once asked - "when is the best time to buy a dog?"
17. greenshootsandleaves said...
I see it as nothing more than a 'Keep The Faith' article. Well, something was needed to counter a recent spate of 'dire predictions' for the housing market. There was even one in the Daily Mail ('Junior Editor Loses The Plot After Being Left In Charge During Holiday Season'?). We can't have people going all despondent on us and lowering their asking prices, can we, boys and girls? That would definitely not be in everyone's interest.
18. smugdog said...
ROTFATPMP
19. clockslinger said...
They are probably right but in Feb CEBR forecast 6% this year and 20% by 2013. What does ROTFATPMP mean?
20. quiet guy said...
Rising of the fear as the property market panics?
:)
21. holding out said...
Rickety old tit fabricates acronym thus proving minature pr!ck
22. mark wadsworth said...
TNC, when I say "small government" I mean all the authoritarianism and banning and regulating and spying. Big corporatist government like the EU is still "big government".
Home-Owner-Ism is very big government indeed. You are quite right that house prices are largely a function of banks' wilingness to lend and people's willingness to borrow - but in the UK and the US it is the governments, i.e. the taxpayers. who are providing all the mortgage finance. The whole thing is completely immoral.
Conversely, a Georgist government that collects as much LVT as it can, spends the bare minimum on core functions of the state and dishes the rest out as a Citizen's Dividend is not "large government" in my book.
23. mark said...
same article in the times papers today, plus lots of other ramping of property..
the fundamentals are not there, it is not possible for prices to keep going up unless wages shoot up, people are skint.
24. smugdog said...
Huddle together oh flat earthers, console one another.
We'll have our day eventually, perhaps not in our lifetime,
but we'll show them, one millennium soon.
25. tenyearstogetmymoneyback said...
icarus said..."These people know that interest rates will remain low for the next 4 years".
So that might stop a collapse in prices. The £70 billion question is where is any money for new or increased mortgages
come from ?
It will be just like the 70s when a Building Society Manager had enough cash to give out four mortgages a week
(and I bet they weren't silly multiples or anything).
26. bidin'matime said...
The CEBR has links to the equity release industry – see this
Independent article from April 2003 . They always sing the same tune…
27. bidin'matime said...
Okay, I give up - can anyone tell me how to post links? The link I wanted is at http://www.independent.co.uk/life-style/house-and-home/property/housing-market-will-rise-and-rise-595073.html
28. Arthur Kinnell said...
CEBR said the same thing in February
"with the rate of mortgage lending more than doubling ... a shortage of new properties on the market, low interest rates and unemployment not rising nearly as fast as expected"
six months on they struggle to find enough evidence to fit the "facts". The beginning of a new boom perhaps? North Sea gold? British scientists invent perpetual motion machine? Britain leads the way in desktop nuclear fusion ect ect... Time I went for my lie down.
29. Yoss said...
Bollards...
These being the same experts that didn't see the bubble coming? Same experts that ignore entire estates of luxury appointed flats that stand empty because they have not been finished (One last plug socket to wire up).
Under supply is a total myth, if councils start charging for empty housing (and they will), and councils start assessing peoples needs/requirements against their current housing....Then that myth will be blown apart!
30. miken said...
Not sure why there is so much doom and gloom.
Fact is we just had 13 years of Labour who spent 500bn+ of our children's money.
We haven't really started to pay for the good times yet.
The impact of forthcoming austerity, tax rises, and ever increasing inflation is going to be huge on house prices.
I see that a growing number of property investors know this and are selling up. We just need to hold back on not be
the mug who buys the property at near peak prices.
31. growler said...
@ icarus. Not heard the nappies one, just perfect.
I don't know why we're so fussed about CEBR. They effectively say that upside house prices will only just keep pace with inflation. But they also caveat it so they too can say "we were right" when the market collapses this autumn.
32. Iano said...
@Smugdog
Huddle together oh flat earthers, console one another
- Would that be those that think interest rates, unemployment and inflation will stay perpetually 'flat'.
We'll have our day eventually, perhaps not in our lifetime,
- of course not in your lifetime, not with the now 'appropriately lent' 100 year mortgage.
but we'll show them, one millennium soon.
- As long as you've paid the interest... eventually!!
Poetry, or poetic justice.. time will tell I guess.
33. Umaguma said...
Media trying to talk the market up because the media is owned by the people that own lots of property. Basically, the only way this could happen is for a second sub-prime frenzy. likely? I think not. Even if house buyers had the will to take on the loans required to sustain further property price escalation, the banks ain't lending, not because they don't want to, they can't.
"Just 'cos they say it's so, don't make it so"
34. Tom101 said...
How dare the Mail post an article that will increase it's sales!!!