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BelfastVI

Nationwide Aug Figures

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http://www.nationwide.co.uk/hpi/

House prices rose by 1.6% in August

How come when these are + it is left to me to post them.

Now this is starting to scare me. Far too much, far too soon. To be totally honest I expected, and would rather have seen a small drop to allow the prices to flat line for 12 months. I cant see, and hope this doesn't happen in NI.

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I've read the thread on the main board. I know Gordon Brown is desperately trying to inflate the bubble. The head honcho at Templeton Robinson says that half of houses for sale over here have been on the market for at least a year. Public sector job cuts loom. Banks are not lending much because they can't palm off the loans to the pension funds. Investors from the ROI are in short supply.

I think that next month will show a drop again. I can't logically see this bubble happening again in NI for at least 10 years. Just my 2p worth.

There wont be a bubble here for 20 years or more - its not even on the cards. What I want is the current bottom to stick. What I am afraid of is price rises. Too much too soon will lead to a W shape.

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I've read the thread on the main board. I know Gordon Brown is desperately trying to inflate the bubble. The head honcho at Templeton Robinson says that half of houses for sale over here have been on the market for at least a year. Public sector job cuts loom. Banks are not lending much because they can't palm off the loans to the pension funds. Investors from the ROI are in short supply.

I think that next month will show a drop again. I can't logically see this bubble happening again in NI for at least 10 years. Just my 2p worth.

I agree. This is a bear market trap. House prices are going to fall, it is simple as that. Whether that is in real terms or nominal I don't know. However, I have really getting my head down over the last week and doing as much study as possible...It seems quite amusing I would say to alot of people, but the GBP/JPY has a near perfect correlation with house prices. GBP/JPY has been rising since March, as have house prices,I have noticed some changes in this pair. I think the JPY is a great barometer of changes in global sentiment, and risk aversion/risk tolerance. It has flatlined for over a month now in a range, and in the last few days the GBP/JPY has broken down through key support levels. If it gets below 147, then I think that will be a sign that credit markets will deteriorate or already are. Also Japanese Gov bonds are moving higher as well as US Gov bonds....These have been good indicators of things to come as in falling assets.

The GBP is a currency that has become associated with being correlated with risky assets, so it is not coincidence that it has strengthened as stocks and real estate has increased. I think next month will be interesting and I think Doccyboy could be spot in his prediction that next month will be negative.

The signs to watch for are when markets show weakness in the face of good news. I have seen that in the last few days. Everymonth when house prices have been released in the past the markets and the GBP have rallied on the news. Today the GBP is heavily down, markets are flat. This is a key sign if a turning point.

Yesterday the US announced homesales surged most in 17 months, the markets were flat. Alo German manufacturing improved yesterday the markets went down. There are certain disconnects starting to appear, this autumn is going to be very interesting in my opinion.

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There wont be a bubble here for 20 years or more - its not even on the cards. What I want is the current bottom to stick. What I am afraid of is price rises. Too much too soon will lead to a W shape.

Even an idiot like Broon knows that this is the last throw of the dice. What we are seeing is the effect of a "sensible fiscal policy" of

1 Printing Money (already the BoE has printed more than 5 years worth of VAT tax)

2 Record fiscal borrowing

3 Unfeasibly historic low interest rates

All designed to get the one-eyed idiot back into No. 10 in May. Give the economy a shot of steroids, make the numbers look better so we'll get re-elected.

Sooner or later, the chickens will be coming home to roost

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http://www.nationwide.co.uk/hpi/

House prices rose by 1.6% in August

How come when these are + it is left to me to post them.

Now this is starting to scare me. Far too much, far too soon. To be totally honest I expected, and would rather have seen a small drop to allow the prices to flat line for 12 months. I cant see, and hope this doesn't happen in NI.

... because this is a UK wide rise. We only get specific Northern Ireland data in the quarterly report.

You realize as well as I do, that coming into the autumn/winter buyers will dry up and these rises are a nice setup for further large falls. This will change sentiment and momentum.

There wont be a bubble here for 20 years or more - its not even on the cards. What I want is the current bottom to stick. What I am afraid of is price rises. Too much too soon will lead to a W shape.

I know we strongly disagree on this, but I just don't see how average house prices at 6.25 times average income is affordable in the longterm.

N.B. Joint and FTB figures are irrelevant to the house price/earnings ratio. Though I know you want them to be relevant this time.

Edited by Belfast Boy

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Dear all,

My two pennies fwiw-many "experts" saying that there will never be a better time to buy than now.I say for new builds that may actually be true.

For everything else and especially houses currently at £250k + that is just plain tosh.Capitulation phase next and i totally agree with above posters who say that this Autumn will be dire-it will.Just look at d facts.Same media who talked this up are still doing a great job of talking through their khaks right now.They were almost universally wrong about crash and are going to be proven just as wrong about all this recovery crap.I am only stating the facts

which are:

1.banks technically insolvent-plenty more w/downs to come over next 5 years as residential and commercial loans books take a battering

2.govt is beyond broke and fixing this is where wave two of recession starts as public sector wage bill gets trimmed

3.r rates must rise and by what factor as qe feeds into economy next year

4.joe public in debt up to his ears

Not being -ve as iam one of those who lost his job and still trying to find gainful employment.

Seriously how could any sane person say we have a recovery on when you look at the FACTS.

If i haven`t spoilt your day- have a good one! :D

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I don't think it's anything to worry about. The requirements for HPI are not there, and won't be for years.

If you compare this to the last crisis (90's), this one is the big whopper. So it's only natural that it will play out that way, i.e. a bigger/longer spring bounce, bigger bull trap and bigger crash when it happens. And it hasn't yet crashed BTW....

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I can't logically see this bubble happening again in NI for at least 10 years. Just my 2p worth.

Could you logically see it 3 years ago?

Did Padraig Ui Cac and Seamus Duraman from Baille Atha Cliath have the same logic as you? Or any at all?

But they sure had tons of (other people's) money - and changed the Wee Country out of recognition.

Now the illogical role is played by the guys in Westminster & in Downing Street - look at all the interest rate manipulation and the QE.

We can expect anything, until they run out of money, as our friends from the Republic did.

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We can expect anything, until they run out of money, as our friends from the Republic did.

They have already, hence the need to fire up the printing presses!

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I don't think it's anything to worry about. The requirements for HPI are not there, and won't be for years.

If you compare this to the last crisis (90's), this one is the big whopper. So it's only natural that it will play out that way, i.e. a bigger/longer spring bounce, bigger bull trap and bigger crash when it happens. And it hasn't yet crashed BTW....

You can say what you like about what may or may not happen in the future but you cant look at a 40% drop and say that is not a crash. It has crashed and the only question is - is it over.

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I know we strongly disagree on this, but I just don't see how average house prices at 6.25 times average income is affordable in the longterm.

N.B. Joint and FTB figures are irrelevant to the house price/earnings ratio. Though I know you want them to be relevant this time.

For everybody's sanity we will leave it at agreeing to disagree. I base my opinions on what I see on the ground. Almost all of our purchasers are joint earners and the banks issue mortgages on this. Will they change their views - I don't know.

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You can say what you like about what may or may not happen in the future but you cant look at a 40% drop and say that is not a crash. It has crashed and the only question is - is it over.

Maybe they have crashed 40%, at least on paper, but I'm just not seeing it.

In my area, most sellers have only dropped a token 10% from peak, if any at all.

And the recovery talk is unlikely to convince them that they should drop more.

The 'real' crash has not yet happened. Maybe it won't happen, I don't know, all I know is I earn an average salary, and could not even consider buying a house in the so called 'working class' area I was brought up in.

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Interesting thing is the UK (Nationwide) average house price is now almost 20% more expensive than NI. Which is what it was from 1995 to 2001. Mind you there have been times when the UK price was double the NI price, and as we know, times when the NI price has been higher.

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Maybe they have crashed 40%, at least on paper, but I'm just not seeing it.

In my area, most sellers have only dropped a token 10% from peak, if any at all.

And the recovery talk is unlikely to convince them that they should drop more.

The 'real' crash has not yet happened. Maybe it won't happen, I don't know, all I know is I earn an average salary, and could not even consider buying a house in the so called 'working class' area I was brought up in.

All the reports are based on actual sales, either from a EA or the mortgage lenders. We have had the debate on the EA's hiding the scale of the actual drops. There is no dispute that the prices on transactions have dropped. If people want to sell they will have to drop to the level that is selling. The 40% is an average and will be higher is some areas and lower in others and will be directly reflective on the scale of the rise in that area during the boom. In my experience the working class areas, as you call them rose the most and will fall the most.

You cant say the crash hasn't happened it has. If people are holding on to historical prices then the houses will not sell and they are effectively off the market. To obtain a sale they will have to lower. They may choose not to sell at this level and that is their decision. Holding out for a higher price will not causes the market to move up, it will just move on.

I'm sorry you cant find a house but it is only the houses that are selling that is at the right price the houses that are not selling are simply not at the market price.

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I agree. This is a bear market trap. House prices are going to fall, it is simple as that. Whether that is in real terms or nominal I don't know. However, I have really getting my head down over the last week and doing as much study as possible...It seems quite amusing I would say to alot of people, but the GBP/JPY has a near perfect correlation with house prices. GBP/JPY has been rising since March, as have house prices,I have noticed some changes in this pair. I think the JPY is a great barometer of changes in global sentiment, and risk aversion/risk tolerance. It has flatlined for over a month now in a range, and in the last few days the GBP/JPY has broken down through key support levels. If it gets below 147, then I think that will be a sign that credit markets will deteriorate or already are. Also Japanese Gov bonds are moving higher as well as US Gov bonds....These have been good indicators of things to come as in falling assets.

The GBP is a currency that has become associated with being correlated with risky assets, so it is not coincidence that it has strengthened as stocks and real estate has increased. I think next month will be interesting and I think Doccyboy could be spot in his prediction that next month will be negative.

The signs to watch for are when markets show weakness in the face of good news. I have seen that in the last few days. Everymonth when house prices have been released in the past the markets and the GBP have rallied on the news. Today the GBP is heavily down, markets are flat. This is a key sign if a turning point.

Yesterday the US announced homesales surged most in 17 months, the markets were flat. Alo German manufacturing improved yesterday the markets went down. There are certain disconnects starting to appear, this autumn is going to be very interesting in my opinion.

Over the course of this week, I have had the feeling that this week is the peak of the rally and that we are heading downhill from here. Of course I have no knowledge to back this up, just a hunch from various things I've seen and read, the end of the summer, the weather, the return of a few bulls to the news blog, other stuff that all sounds a bit stupid really. I think we will see big stock market falls next week, but again just the same feeling. Needless to say I won't be putting any money on it. Interesting to see that this post agrees and with some actual facts.

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For everybody's sanity we will leave it at agreeing to disagree. I base my opinions on what I see on the ground. Almost all of our purchasers are joint earners and the banks issue mortgages on this. Will they change their views - I don't know.

In the past banks have not counted the 2nd earner as significant, certainly 1x addition only to the main earners 2.5 or maybe 3x mortgage. Put simply the ratio of wages to house prices has drastically changed and is not fully corrected yet.

I believe the current flat lining/increases are cause by the Banks still giving out unaffordable mortgages if you have a big deposit (so they are just clearing out the cash rich now), they know that if they hold back to proper affordability it will seriously knock back house prices bankrupting them again, and the gov't is pushing them to lend and they are doing dodgy tricks like buying up the risky mortgages in separate companies. All this is prosponing the correction and storing it up for later.

At the end of the day people spending more on housing means less for other productive areas of the economy, we cannot ALL live by selling each other houses, or even building them. The Banks have managed the stagnation to now, strangely successfully, but at some point the economy will bite back. I am quite fearful of the next round of crashing, it might be the real country breaker. AFAIK we can't afford to bailout the banks again.

Edited by Ride_on

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If people are holding on to historical prices then the houses will not sell and they are effectively off the market. To obtain a sale they will have to lower. They may choose not to sell at this level and that is their decision. Holding out for a higher price will not causes the market to move up, it will just move on.

This is so true.

There has been 2 new 'of plan' developments placed on the market in Cookstown. 3 bed semi-detached for £125k and detached for £145k. This has had a big effect in moving the market on. This has undercut some of the existing 'new' stock. I have noticed some secondhand houses disappearing from estate agent websites. Why would you pay any more for a secondhand house in the area?

http://www.stanleybestestateagents.co.uk/claggan-way/d249

http://www.stanleybestestateagents.co.uk/loranvale/d180

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I agree. This is a bear market trap. House prices are going to fall, it is simple as that. Whether that is in real terms or nominal I don't know. However, I have really getting my head down over the last week and doing as much study as possible...It seems quite amusing I would say to alot of people, but the GBP/JPY has a near perfect correlation with house prices. GBP/JPY has been rising since March, as have house prices,I have noticed some changes in this pair. I think the JPY is a great barometer of changes in global sentiment, and risk aversion/risk tolerance. It has flatlined for over a month now in a range, and in the last few days the GBP/JPY has broken down through key support levels. If it gets below 147, then I think that will be a sign that credit markets will deteriorate or already are. Also Japanese Gov bonds are moving higher as well as US Gov bonds....These have been good indicators of things to come as in falling assets.

The GBP is a currency that has become associated with being correlated with risky assets, so it is not coincidence that it has strengthened as stocks and real estate has increased. I think next month will be interesting and I think Doccyboy could be spot in his prediction that next month will be negative.

The signs to watch for are when markets show weakness in the face of good news. I have seen that in the last few days. Everymonth when house prices have been released in the past the markets and the GBP have rallied on the news. Today the GBP is heavily down, markets are flat. This is a key sign if a turning point.

Yesterday the US announced homesales surged most in 17 months, the markets were flat. Alo German manufacturing improved yesterday the markets went down. There are certain disconnects starting to appear, this autumn is going to be very interesting in my opinion.

VT i cant send a PM yet, but i just want to say i am amazed by your level of knowledge and insight into the markets and what this means regarding currencies and housing markets etc. I always like reading your posts, thank you for sharing them.

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I believe the current flat lining/increases are cause by the Banks still giving out unaffordable mortgages if you have a big deposit (so they are just clearing out the cash rich now), they know that if they hold back to proper affordability it will seriously knock back house prices bankrupting them again, and the gov't is pushing them to lend and they are doing dodgy tricks like buying up the risky mortgages in separate companies. All this is prosponing the correction and storing it up for later.

This is so true!

It appears that the banks are being treated as the proverbial prodigal sons by the system - they are allowed to mess up, are bailed out at great expense, and yet continue with the lending practices that resulted in massive debt burdens.

In order for current house prices to be maintained, banks will have to continue to lend 5+ salary multiples, they will have to lend on an unsupported interest-only basis, they will have to offer terms up to 40 years duration and interest rates will have to remain low for the long term in order to ensure that current mortgage holders aren't bankrupted.

Will this happen?

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I believe the current flat lining/increases are cause by the Banks still giving out unaffordable mortgages if you have a big deposit (so they are just clearing out the cash rich now), they know that if they hold back to proper affordability it will seriously knock back house prices bankrupting them again, and the gov't is pushing them to lend and they are doing dodgy tricks like buying up the risky mortgages in separate companies.

More sub-prime lending. <_<

This is so true!

The government, banks and media have done a really good job. The financial crisis, 0.5% interest rates, QE, £50K deposit guarantee. People are worried. Some cash rich people honestly believe that their money is now safer in property than it is in a bank.

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How come when these are + it is left to me to post them.

There is an article in todays Mid Ulster Mail. The headline is...

"House prices have risen 23% since the start of 2009."

I cannot find a website link. Here are the first 2 paragraphs complete with mistakes (and I am not just talking about the 23% rise ;) )

"The first tangible sign that the housing market is beginning to recover from the 2 year recession has been published with the main findings from the Northern Ireland Quarterly House Price Index Report showing that there has been a 23% rise in house prices in Mid Ulster since the start of the year.

The report published by University of Ulster and Bank or Ireland gathers sales data from leading estate agents across the province."

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There is an article in todays Mid Ulster Mail. The headline is...

"House prices have risen 23% since the start of 2009."

I cannot find a website link. Here are the first 2 paragraphs complete with mistakes (and I am not just talking about the 23% rise ;) )

Similar reporting in Ballymena Guardian.

No web site. Headline is "Housing market shows shoots of recovery".

"Locally the overall average sale price of a house in Ballymena and Antrim area rose by 5.7% over the quarter".

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Similar reporting in Ballymena Guardian.

No web site. Headline is "Housing market shows shoots of recovery".

"Locally the overall average sale price of a house in Ballymena and Antrim area rose by 5.7% over the quarter".

Unfortunatly they are actually correct.

Mid Ulster Q1 £137k

Mid Ulster Q2 £167k

Increase 22% in one quarter. On small numbers it is best to ignore this. Next quarter it could be £140 which whilst a rise from the start of the year will be reported as a drop. The figures for the whole on NI are low enough to bring into question their statistical relevance without sub dividing this figure again. Whilst they are technically correct - best stay quiet.

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