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Economy 'to Dampen House Prices'

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The sluggish UK economy is likely to mean that house prices will not see any "meaningful" recovery for some time, two separate surveys suggest.

beeb link

Nice, millions of people just been told no house price rises for a decade at best. :D

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Although note that this graph is not necessarily to scale...

So you're saying the "Despair" area of the graph could actually be much larger?

Edited by Sine270

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So you're saying the "Despair" area of the graph could actually be much larger?

You can't have too much 'Despair'...

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However the bull trap occured much closed to the long term mean line

Not really. Any figures which show house prices anywhere near the long term mean at the moment are wildly distorted. What average earnings figure are Halifax using again?

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The truth is that prices won't reach 2007 levels again in real terms in our lifetimes.

The BBC propaganda is prices will be sustainable once mortgage lending resumes.

This encourages everyone to ask "when will mortgage lending resume", which is a red herring.

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Of course whats really sickening about this is that it is all the wrong way round.

"If only the cursed economy would recover so we could continue with the real process of all becoming squillionaires through the magical property market"

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Although note that this graph is not necessarily to scale...
So you're saying the "Despair" area of the graph could actually be much larger?

The graph tends to imply that at the "Return to Normal" stage the hypothetical asset is around three times its mean value, and that by the trough of "Despair" will be at half of its long term mean value.

What i'm saying is that whilst the shape of graph is useful, the scale is abitrary.

So yes, the despair area could be much larger. However, also the Fear/Capituatlation area could be much smaller as well.

There is just a danger of looking at this graph and using it to deduce that at the trough of this HPC, the Nationwide index will come to rest around 80% lower than it is now, i.e. £25,000, which is (i) not the purpose of the graph and (ii) highly unlikely in the absence of all but the severest deflation.

It seems like a lot of people are rubbing their hands with glee at the prospect of the "Fear/Capitulation" slide but there is no guarantee it will be anything like the magnitude that graph appears to suggest, even if the broad shape is right.

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It needs to be much larger for the mean line to make any sense.

VMR.

Yes I agree - to put it one way I expect to see less "Fear/Capitulation" and more "Despair"

(Sounds like a comedy script for the devil's monthly planning meeting! :lol: )

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BBC being bearish,what next <_<

Thanks for getting this back on topic as soon as that graph came up I thought here we go.

There does seem to be more bearish news around at the momment and if Auntie Beeb are running with it then the sheeple are going to see that house prices are going to drop further.

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