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BelfastVI

Uk House Prices Up 1.3% In July

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Interesting article from BBC

Homes 'may rise in value in 2009'

A pool of potential buyers has been waiting to buy, Nationwide says

The UK's largest building society believes there is a "reasonable chance" that house prices could end the year higher than they started 2009.

Such an outcome was "unthinkable" a few months ago, the Nationwide's chief economist said.

The Nationwide's latest house price survey showed prices rose by 1.3% in July compared with the previous month.

The average UK home costs £158,871, with the annual rate of property value falls slowing sharply to 6.2%, it said.

The three-month on three-month comparison of property prices - considered a less volatile measure than the monthly data - rose from 1% in June to 2.6% in July.

This was the highest level seen since February 2007, when the housing market was booming.

'Buyers' pool'

Property values in July were 6.2% lower than the same month a year earlier, but this was a significant deceleration compared with the 9.3% annual house price fall seen in June.

It is unlikely the price increases can be sustained for long at the very strong rate observed over the last few months

Martin Gahbauer, Nationwide chief economist

"House prices have been remarkably resilient so far this year, despite a recessionary economic background with sharply rising unemployment," said Martin Gahbauer, Nationwide's chief economist.

This "correction" was a response to the sharp decline in activity in the housing market at the height of the banking crisis last autumn, he said.

Mr Gahbauer said there had been a pool of prospective buyers who had been "ready and able" to buy during the credit crunch but had been put off by the uncertainty in the economy.

When the worst of the crisis was over, or averted, these buyers came back to the housing market, encouraged by low interest rates.

The rise in demand and activity coincided with few properties being put up for sale, and so prices bounced upwards, he said.

Lasting rise?

The rise in prices would be stunted owing to the squeeze on earnings and rental income, and the rise in unemployment, he warned.

"It is unlikely the price increases can be sustained for long at the very strong rate observed over the last few months," he said.

A rise in mortgage approvals for house purchases, revealed by the Bank of England earlier in the week, signalled greater activity in the housing market in the coming months.

In the short-term, the supply of homes for sale was determined by issues such as consumer confidence and job security, but construction was key over the long-term, said Mr Gahbauer.

An estimated 100,000 homes are being built in 2009, a record low. This is far below the increase in the number of home-seekers, owing to migration and greater life expectancy.

"Over time, these shortages are detrimental to housing affordability and can contribute to future instability of prices," he said.

On Monday, the government announced that hundreds of housing developments in England that had stalled during the recession were set to share in a £925m attempt to kick-start the industry.

About 270 projects could benefit from the cash, the government said, with a third of the funds to go to housing associations to build affordable homes.

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to be honest i think sellers expectations across the pond have risen. however i think this will not last as sellers who have rented out their properties etc will start piling them back on the market.

also i dont think it really reflects NI which was ramped to 11 x earnings by southern irish led speculation

im still seeing circa 300-350 reductions on TTDGTTS a week and no more than 20 increases

hey maybe the rise in the market will get the NAMA sell off started!

Edited by getdoon_weebobby

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"Prices continue to rise on dwindling volumes", an old quote from dstars.

This may just be an indication of a further collapse at the bottom end of the market. This will cause the market average to rise.

The fundamentals are still terrible.

I wonder will the next quarterly report show that prices increased in Northern Ireland?

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Guest KingCharles1st

"Homes 'may not rise in value in 2009'

A pool of potential buyers has been waiting to buy, Nationwide says

The UK's "Bank of KingCharles1st" believes there is a "reasonable chance" that house prices could end the year lower than they started 2008.

Such an outcome was "unthinkable" a few months ago, the Nationwide's chief economist said.

Edited by KingCharles1st

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It's widely expected that the American market will pick up before the European side of things. That said Deutsche Bank clear does not have an optimistic outlook for the American property market over the near term...

http://www.bloomberg.com/apps/news?pid=206...id=ac9y1xr7yNhQ

Thats scary stuff 'perhaps 48% of mortgages will be under water' in the US

I find it hard to understand this. Assume the average mortgage is 15 years(could be 20-some pay off early) so the average outstanding mortgage is 7 years old. I don't think seven years ago they were all 100% mortgages. I would say the average was 85% and they were not all interest only so there should have been some reduction of capital. So my crude figures would guess that the average mortgage is 75% of house prices 7 years ago, apart from those that took equity release. I haven't been studying the US market. But some states are down 50% some are only down 15%. But I don't think they are back to 2002 prices.

Me starts to wonder if this lucky Dutch bank is less exposed to the US market than some of its competitors. If so -exellent press release. The fact that they don't quote any figures (apart from the 26% current status) and the fact that this is purely conjecture is irrelevant. If they had serious exposure they would never release this. So tactically this is good stuff.

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"Homes 'may not rise in value in 2009'

A pool of potential buyers has been waiting to buy, Nationwide says

The UK's "Bank of KingCharles1st" believes there is a "reasonable chance" that house prices could end the year lower than they started 2008.

Such an outcome was "unthinkable" a few months ago, the Nationwide's chief economist said.

The Bank of KingCharles1st is, of course 100% correct in its belief there is a "reasonable chance" that house prices could end the year lower than they started 2008. In fact there is a more than reasonable chance. I don't think anyone has suggested differently.

This will still be correct even if the Nationwide suggestion is also correct. But you will have to admit that if the Nationwide boast does turn out to be correct it will be quite a shock and something even the bulls were not suggesting even a few weeks ago. I doubt if 2009 will finish higher than it started. if it finishes at the same level it is at now I would be very happy.

Edited by BelfastVI

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Anyone know when Q2, 2009 University of Ulster / Bank of Ireland survey results are due to be released? Think Q1 report came out in mid May so am guessing mid August?

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Anyone know when Q2, 2009 University of Ulster / Bank of Ireland survey results are due to be released? Think Q1 report came out in mid May so am guessing mid August?

AFAIK it is due to be released any day soon. I was expecting it this week but it is most likely to be next week now.

Should be interesting to see the spring bounce (if it materialised)

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