Halifax +1.1% Mom, -12.1% Yoy

[Neverland]

There will be no major resumption in house price falls while the BOE base rate is so near 0%.

Rates will only be raised in a big way when the economy has fully recovered.

Then the postive effects on house prices of a growing economy will counter the negative effect of interest rate rises.

House prices bottomed in the first few months of this year when rates went to almost 0% and are unlikely to take out that low point (147K on the nationwide index).

Had rates been kept at around 5% we would still be making new lows in the house price indices.

The BOE base rate averaged about 8% during the last crash in the early 90s. And mortgage rates were about 3 times higher than what they are now (10% instead of 3.5%).

I would propose that QE and the various measures to support the banking system will reduced first...

...then interest rates will rise to keep inflation in check or because higher interest rates are demanded by buyers of the new gilts being issued to fund all this..

The economy might not be fully recovered by then, no?

[loginandtonic]

DB, thx for posting - but if you wanted to can you sell now for break even or profit? i knowyou've just bought but if you wanted to leave that dream house... could you at b/e or profit selling Q3 2009 ?

If you have time, can you spell out in a simple summary how we get hyperinflationary house prices - ie a house "worth" £200K now only being purchasable with say £400K of paper yet salaries not rising. Are you suggesting people will go hungry like Zim with low wages in real terms and surging food prices etc, but yet a house will be massively out of their financial grasp even more so than it is now? How long can that be sustained before sellers need to sell to those who have the money or borrowing power to buy? Not long, I'd say, but educate me if different.

I appreciate your arguments and am not being sarcastic, i just want to understand and make sure i myself am not unknowingly talking bs on here. ( no cheeky retorts please )

[Realistbear]

But the Royal Institution of Chartered Surveyors (Rics) points out that prices have been squeezed higher by a small pick-up in demand from buyers, combined with a lack of supply of homes to buy.

Common in HPCs--transactions plummett (due to underlying negatives such as unemployment and lack of credit) but prices appear to rise as fewer, more expensive homes change hands. The reposession/auction data is left out skewing the data even more. Saw it happen in the first 2 years of the great California crash. In the end, the ability to buy brings the market into alignment with affordability. Unemployment is the nemesis which no overinflated market can overcome.

[foa4]

It sure is. Please HPCers - stop deluding yourself that this is a monthly blip - it isn't. We are into a new period of sustained house price growth which will last well into next year. Hopefully not into 2011. If you're waiting for house price falls to resume, you'll have a long and painful wait.

I wouldn't go that far

We'll probably see some +ves and -ves over the 24 months but prices will be quite stable for the next few years.

But NO HOUSE PRICE CRASH

[Guest Daddy Bear]

I would propose that QE and the various measures to support the banking system will reduced first...

...then interest rates will rise to keep inflation in check or because higher interest rates are demanded by buyers of the new gilts being issued to fund all this..

The economy might not be fully recovered by then, no?

Apologies for my curt reply earlier

The economy might not be fully recovered by then, no?

The US and UK economies will take years and years to recover - if ever - too much debt I am afraid. (Unless they hyperinflate it)

then interest rates will rise to keep inflation in check

They cannot raise interest rates now.

This would start a viscious circle - ironically guaranteeing hyperinflation.

They have to leave them low and keep QEing, printing and bailing out to the tune of trillions. - guaranteeing hyperinflation

see my thread for the details

http://www.housepricecrash.co.uk/forum/ind...121543&st=0

Edited August 5, 2009 by Daddy Bear

[loginandtonic]

I wouldn't go that far

We'll probably see some +ves and -ves over the 24 months but prices will be quite stable for the next few years.

But NO HOUSE PRICE CRASH

until when?

[foa4]

until when?

there will be a constant cycle of boom and bust...the price at the peak of the boom being reduced but no significantly so before the next boom.....we're a small island with to many people and a government not to concerned about the housing shortage... you work it out!

[Y-QUERK]

So, whos buying?

[Guest Daddy Bear]

DB, thx for posting - but if you wanted to can you sell now for break even or profit? i knowyou've just bought but if you wanted to leave that dream house... could you at b/e or profit selling Q3 2009 ?

If you have time, can you spell out in a simple summary how we get hyperinflationary house prices - ie a house "worth" £200K now only being purchasable with say £400K of paper yet salaries not rising. Are you suggesting people will go hungry like Zim with low wages in real terms and surging food prices etc, but yet a house will be massively out of their financial grasp even more so than it is now? How long can that be sustained before sellers need to sell to those who have the money or borrowing power to buy? Not long, I'd say, but educate me if different.

I appreciate your arguments and am not being sarcastic, i just want to understand and make sure i myself am not unknowingly talking bs on here. ( no cheeky retorts please )

but if you wanted to can you sell now for break even or profit?

I got a very good deal - yes we could sell and make a profit - probably £100K - but then there are fees and 4% stamp duty oon next house, moving costs etc etc...

As I said will never hopefully have to sell - well not for 25 years or so.

Read the thread in economics section - it is all explained there

[FreeTrader]

I know we have had this debate on here before but, are average wages in the UK really as high as £36,576? That seems to be considerably above what most people earn outside of the city.

The Halifax uses full-time male mean earnings. The median earnings figure for all full-time workers is much lower.

As far as the P/E numbers are concerned, Halifax has always used the full-time male mean, so it's consistent in that respect.

[Realistbear]

http://news.bbc.co.uk/1/hi/business/8181945.stm

Illusory

The recession is still in full spate and unemployment is going to continue rising for some time..../

"You can't have 15 years of house price rises ending in a bubble, along with the worst financial crash since the 1930s, and a property crash lasting just a year and a half," he says.

FP is correct. He took the very words out my own mouth. The biggest crash in histiry over befire it has really begun? Not a chnace. Gordon's spending debt propelling binge has bought 6 months--tops.

Edited August 5, 2009 by Realistbear

[foa4]

So, whos buying?

houses for homes and not investments?

[loginandtonic]

but FOA there is no housing shortage, theres only a "shortage" of cheap homes for low paid workers and immigrants who came here when there were low paid jobs. its a myth about shortages, theres about a million empty places, see the archives.

edit '' i've just done a quick google and pulled out the first story on that http://firstrung.co.uk/articles.asp?pageid...&cat=63-0-0

Edited August 5, 2009 by loginandtonic

[Guest theboltonfury]

but FOA there is no housing shortage, theres only a "shortage" of cheap homes for low paid workers and immigrants who came here when there were low paid jobs. its a myth about shortages, theres about a million empty places, see the archives.

This is all a bit of an over reaction. We knew that they would be roughly the same as Nationwide. This is no shock.

[expatowner]

With so many parties having a vested interest in keeping prices up (government sucking up to the electorate, bankers and their chums etc) then its no wonder that they have achieved a small (+1.1%) measure of success.

I cant see the outlook changing much until there is another BIG event, say at election time?

[abharrisson]

TBH, this thread is the same as any political comment after an election defeat, month after month, if its the bears win they sound like the bulls, if its the bulls win they sound like the bears.

Me?

Itll all go wrong after the holidays...and that time is apporaching.

We are in agreement although possibly not on the scale of the "go wrongness" that will happen post the hols... I'm going for a more gentle slide.

Whats the current total drop off from peak ... 12% ?.. add in say three to five percent for inflation and its 17%...... I reckon now we have to see something like two or three years of ups and downs with the downs more than outweighing the ups... total fall to come circa 18% to 23-25%...... although I suppose a sharper little slip sept 2009, to march/april 2010 might be on the cards. Corrected for inflation this might mean 40% odd in total. If the last 12% hasn't felt like a crash, then nor is the next 18% as I reckon it might come over a protracted period.

Funny thing is that whichever way this market goes I am still of the very firm belief that it won't be until something like 2007 that we'll the height of pricing again

[loginandtonic]

I got a very good deal - yes we could sell and make a profit - probably £100K - but then there are fees and 4% stamp duty oon next house, moving costs etc etc...

As I said will never hopefully have to sell - well not for 25 years or so.

Read the thread in economics section - it is all explained there

so you, DB, who in earlier posts said that you made so much money in the previous purchase that you'd have had to work for x number of years to make that, are now turning down circa 100K profit before fees?

you must now be very rich indeed. if i had made the happy transaction such as yours, i'd gladly become a flipper for even a 20k clear profit, nevermind something like 50k+.

what you posted before

Joined here in July 2005 was certain the market was about to crash due to the unfeasible capital gain on the first homes my wife (then gf) and I had bought in the late 90's.

It would have taken me 100 years to save what we had 'made' in 8 years !

Both my wife (gf then) and myself had kept our first homes (which we had rented out) as we had bought a family home together.

Convinced my wife to sell our 'inadvertent' BTL's and amazingly paid off the mortgage in family house.

Hindsight has shown me that the 2 bed flat market peaked in July 2005.

Sold to Rent in Aug 2007 - cut it very fine - could not believe the boom had continued for two more years (it was that interest rate cut that did it!).

Rented a fine house for about the same as our repayment mortgage per month was before we had paid off the mortgage - the interest on our funds covered the rent.

DB you must now have become very wealthy to turn your nose up at £50K flip profit. well done you, its all right for some eh!

Edited August 5, 2009 by loginandtonic

[Alistair Campbell]

Funny thing is that whichever way this market goes I am still of the very firm belief that it won't be until something like 2007 that we'll the height of pricing again

I take it you meant 2017.

[BecksMyCat]

8. Global Quantitative Easing will be carried out on a Massive Scale

Hi Daddy Bear, I asked a week or so before but I think you missed my post. Do you think it is right to highlight point number 8 on your list?

We have quantitative easing, but is it on as massive a scale as you suggest? I am interested to hear your opinion as I value your posts. Thanks

[foa4]

but FOA there is no housing shortage, theres only a "shortage" of cheap homes for low paid workers and immigrants who came here when there were low paid jobs. its a myth about shortages, theres about a million empty places, see the archives.

edit '' i've just done a quick google and pulled out the first story on that http://firstrung.co.uk/articles.asp?pageid...&cat=63-0-0

there is a shortage of quality family home- 3/4/5 bedroom but an oversupply of appartments in city centres.

Yes there are loads of empty properties around the country but these are going to take tens if not hundreds of thousands to bring up to standard...no tax payers money as banks have it !

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

I wouldn't go that far

We'll probably see some +ves and -ves over the 24 months but prices will be quite stable for the next few years.

But NO HOUSE PRICE CRASH

I don't buy the stablility argument. We are living in an age of ever-increasing volatility. I suspect we are seeing the beginning of an extremely strong upswing in prices. We shall see...

[FreeTrader]

This is the provisional inflation-adjusted fall-from-peak chart.

I normally post this on the inflation thread when the RPI numbers come out but it's equally relevant on the Halifax thread, so I've made the assumption that the latest month's RPI index will be the same as the previous month (the actual number won't change the shape of the chart much, and in any case the Halifax figure will almost certainly be revised next month too).

[MississippiJohnHurt]

there is a shortage of quality family home- 3/4/5 bedroom but an oversupply of appartments in city centres.

Yes there are loads of empty properties around the country but these are going to take tens if not hundreds of thousands to bring up to standard...no tax payers money as banks have it !

There's a shortage of 3/4/5 bed houses at realistic prices, for sure.

[Deckard]

Hyperinflation may come one day.

But it is far better to position yourself for : Manic Swings in Prices

So you are proposing your own subjective definition of inflation/deflation, and based on this you predict hyperinflation may come one day.

That'll be 100% guaranteed then

Are you sure you are not morphing into Injin?

[interestrateripoff]

Indeed, the specifics of each monthly change are unimportant.

But much like when prices were tumbling on these low transaction levels, the trend is what's important.

And the trend is up.

Brown has succeeded, albeit temporarily, in his mission to rescue the housing market at all costs, no matter how expensive that may end up being.

Banks rescued, taxpayers dumped with "bad banks" while shareholders and directors take the spoils of the "good banks", limitless money printing, zero interest rates.

Whilst this may only be delaying the problem and making it worse, it's time to acknowledge that this game is massively skewed against anyone who missed Labour's Good Ship Housing Boom.

Brown is the very worst of the housing bulls, like the BTL scum he spawned, he simply must keep the housing market afloat.

Short termism at it's best, we have had everything thrown at propping up house prices as they are critical to the economy. Buying and selling has driven the UK economy it has to be saved at all costs.

Unemployment up and house prices up. More job losses are needed to increase house prices further.