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Realistbear

"prices To Crash 20%"-- Capital Economics

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http://uk.finance.yahoo.com/news/house-prices-to-crash-20pc-by-2012-as-budget-bites-says-capital-economics-tele-926508feb1e4.html?x=0

House prices 'to crash 20pc by 2012' as Budget bites, says Capital Economics
Philip Aldrick, 19:32, Friday 16 July 2010
House prices will crash more than 20pc over the next two years as a result of Government spending cuts, tax rises and a surge in unemployment, according to a leading economic forecaster.
Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012. In total, the group predicts a collapse in house prices of 23pc from the start of 2010 a deeper drop than the 19.3pc crash during the recession.
The numbers imply a torrid second half of 2010 as house prices are currently 3pc higher than the start of the year according to Nationwide Building Society, whose figures Capital Economics is mapping.

AFTT!!! :angry:

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RB, Why are you posting such bullish news? Just 6 weeks ago you were predicting 20% off by the end of this year..............

(since then you have contemplated buying asap)

Changed your mind again????????

You have more flip flops than my wife!!!!!!!!!!!!!!!!!!!!!!! ;)

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RB, Why are you posting such bullish news? Just 6 weeks ago you were predicting 20% off by the end of this year..............

(since then you have contemplated buying asap)

Changed your mind again????????

You have more flip flops than my wife!!!!!!!!!!!!!!!!!!!!!!! ;)

Yup--20% by the end of the year--in many areas if not all areas. These fellows (CE) always look at things too pessimistically. When the herd moves it is always panic. Prices are already down a good 10% in my area and it is not August yet.

I have been contemplating buying as we have to move due to the LL putting our gaff on the market. Was getting despondent at the flood of good news coming out and took my eye off the ball. I was almost the last bear to go bull and knew that if I feigned it--the market would begin to crash. As indeed is the case!

I am extremely optimistic that we will see some mega drops this year and carnage as winter sets in. I will be on the prowl again as the despondency of winter sets in and the BIG ONE from the US hits our shores with a vengeance.

Edited by Realistbear

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Yup--20% by the end of the year--in many areas if not all areas. These fellows (CE) always look at things too pessimistically. When the herd moves it is always panic. Prices are already down a good 10% in my area and it is not August yet.

When the herd panics it's going to panic in a massive way. You only have to look at Northern Rock to see how fast confidence can evaporate.

Considering how the market has been propped up we could see big drops very quickly, the question is how will the banks cope, so far house prices have helped which has clearly helped the solvency of the UK banking system.

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http://uk.finance.yahoo.com/news/house-prices-to-crash-20pc-by-2012-as-budget-bites-says-capital-economics-tele-926508feb1e4.html?x=0

House prices 'to crash 20pc by 2012' as Budget bites, says Capital Economics
Philip Aldrick, 19:32, Friday 16 July 2010
House prices will crash more than 20pc over the next two years as a result of Government spending cuts, tax rises and a surge in unemployment, according to a leading economic forecaster.
Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012. In total, the group predicts a collapse in house prices of 23pc from the start of 2010 a deeper drop than the 19.3pc crash during the recession.
The numbers imply a torrid second half of 2010 as house prices are currently 3pc higher than the start of the year according to Nationwide Building Society, whose figures Capital Economics is mapping.

AFTT!!! :angry:

So 25% down from here? Exactly what the Coalition government wants. Have you read that? Here: http://www.housepricecrash.co.uk/forum/index.php?showtopic=147307&view=findpost&p=2624404

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Even if they do crash 20 or 25% - that's basically 1/3rd off in sterling terms (edited: since they started falling)

I.e. rather than treble over 2007 - 1998 = 9 years, they'll have doubled (300% - 1/3rd = 200%) over 2012 - 1995 = 18 years.

I.e. a growth rate of about 4% YoY, i.e. a little over measured inflation or return after tax on cash.

There's your "housing wealth".

Edited by AvidFan

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Unfortunately, Capital Economics have been shouting these drops for years now and are verging on losing credibility. Nevertheless, they may finally have hit the mark (through persistent repetition, if nothing else). But then again. it's somewhat blaringly obvious that this party would wind up with a massive migraine eventually.

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Even if they do crash 20 or 25% - that's basically 1/3rd off in sterling terms (edited: since they started falling)

I.e. rather than treble over 2007 - 1998 = 9 years, they'll have doubled (300% - 1/3rd = 200%) over 2012 - 1995 = 18 years.

I.e. a growth rate of about 4% YoY, i.e. a little over measured inflation or return after tax on cash.

There's your "housing wealth".

Which would then be very close to the long term return of property in the US. Then there is maintenance and upgrading the property so you aren't stuck with 1970s fittings in 2010.

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Unfortunately, Capital Economics have been shouting these drops for years now and are verging on losing credibility. Nevertheless, they may finally have hit the mark (through persistent repetition, if nothing else). But then again. it's somewhat blaringly obvious that this party would wind up with a massive migraine eventually.

The trouble with economics it's a bit like predicting earthquakes, you know where the fault lines are, you can even get a good estimate of the frequency but being accurate and calling it correctly is nigh on impossible.

The reset switch was avoided in 98/99 when LTCM failed, when the dot com boom collapsed the reset switch was avoided once more, now the boom finally appears to be over.

But you never know perhaps once more they'll pull the rabbit from the hat and avoid the reset switch once again.

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Guys

Who said what is not important!

What is, is the fact that EVERY (bar Express) paper & TV is talking about it.............the MSM in "Prep-ing the Flock"

Mike

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The trouble with economics it's a bit like predicting earthquakes, you know where the fault lines are, you can even get a good estimate of the frequency but being accurate and calling it correctly is nigh on impossible.

The reset switch was avoided in 98/99 when LTCM failed, when the dot com boom collapsed the reset switch was avoided once more, now the boom finally appears to be over.

But you never know perhaps once more they'll pull the rabbit from the hat and avoid the reset switch once again.

Meanwhile the elastic band that is the economy is pulled ever tauter. This short termism will be fatal at some point.

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Meanwhile the elastic band that is the economy is pulled ever tauter. This short termism will be fatal at some point.

Trouble is when will the tension prove fatal?

If we had intelligent people running the show they'd relieve the tension, however because of the nature of politics the short term result would be annihilation at the ballot box, history however would probably a be kinder.

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Unfortunately, Capital Economics have been shouting these drops for years now and are verging on losing credibility. Nevertheless, they may finally have hit the mark (through persistent repetition, if nothing else). But then again. it's somewhat blaringly obvious that this party would wind up with a massive migraine eventually.

Precisely my thoughts - it is pretty meaningless. Here's their prediction from 2008 (taken from home page of HPC)

Capital Economics Roger Bootle Jun 2008 -35%

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Unfortunately, Capital Economics have been shouting these drops for years now and are verging on losing credibility. Nevertheless, they may finally have hit the mark (through persistent repetition, if nothing else). But then again. it's somewhat blaringly obvious that this party would wind up with a massive migraine eventually.

Capital Economics: They said it too soon, did not take account of Browns' £300 Billion Special Liquidity scheme due to end soon, and ultra low interest rates forever.

However, all the ingredients for 25-40% falls are in place apart from high rates (which are edging up gradually whatever the BoE does). The plummet % will be different throughout the country. But I would suggest, if it gets a decent foothold the SouthEast is going to surprise by the strength of falls. It is grossly overvalued when compared to wages, far more so than say... Gloucestershire. Most people could not afford to buy their own homes at current prices, if put back in the position they started in/same deposit % etc.

When the falls come this time, there will no quick rise afterwards. They will be flat for 2 years or more after that. So take your time. Find just the right place. Do not buy until 2013 at least. That is unless there is a total implosion at breathtaking speed. More likely, 0.5-2.5% drops per month.

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When the herd panics it's going to panic in a massive way. You only have to look at Northern Rock to see how fast confidence can evaporate.

Considering how the market has been propped up we could see big drops very quickly, the question is how will the banks cope, so far house prices have helped which has clearly helped the solvency of the UK banking system.

I heard on t' radio that the stress tests pose a scenario in which houses drop 50%.

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" £300 Billion Special Liquidity scheme"

I take it this was "QE1" ?.....................how long to "QE2"?

Mike

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Capital Economics: They said it too soon, did not take account of Browns' £300 Billion Special Liquidity scheme due to end soon, and ultra low interest rates forever.

However, all the ingredients for 25-40% falls are in place apart from high rates (which are edging up gradually whatever the BoE does). The plummet % will be different throughout the country. But I would suggest, if it gets a decent foothold the SouthEast is going to surprise by the strength of falls. It is grossly overvalued when compared to wages, far more so than say... Gloucestershire. Most people could not afford to buy their own homes at current prices, if put back in the position they started in/same deposit % etc.

When the falls come this time, there will no quick rise afterwards. They will be flat for 2 years or more after that. So take your time. Find just the right place. Do not buy until 2013 at least. That is unless there is a total implosion at breathtaking speed. More likely, 0.5-2.5% drops per month.

I think this is true. They were right (we were right) but no one had any idea what the Brownstuff would do to keep his economic myth going - a myth built completely on HPI and debt. Brown & co. did their best to defer the consequences of their economic mismanagement until the election is over. It's treason pure and simple.

The fact that the crash didn't happen then means the consequences will be worse now, because their is nothing supporting this particular tottering edifice. Maybe the ConDems think we can't do much about it, best to get it out of the way quickly (or within 3-4 years).

The emperor had no clothes.

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http://uk.finance.ya...feb1e4.html?x=0

House prices 'to crash 20pc by 2012' as Budget bites, says Capital Economics
Philip Aldrick, 19:32, Friday 16 July 2010
House prices will crash more than 20pc over the next two years as a result of Government spending cuts, tax rises and a surge in unemployment, according to a leading economic forecaster.
Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012. In total, the group predicts a collapse in house prices of 23pc from the start of 2010 a deeper drop than the 19.3pc crash during the recession.
The numbers imply a torrid second half of 2010 as house prices are currently 3pc higher than the start of the year according to Nationwide Building Society, whose figures Capital Economics is mapping.

AFTT!!! :angry:

They have already fallen 25% percent before recovering their 2007 peak. What is this a yo yo economy.

Edited by Mikhail Liebenstein

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Yup--20% by the end of the year--in many areas if not all areas. These fellows (CE) always look at things too pessimistically. When the herd moves it is always panic. Prices are already down a good 10% in my area and it is not August yet.

I have been contemplating buying as we have to move due to the LL putting our gaff on the market. Was getting despondent at the flood of good news coming out and took my eye off the ball. I was almost the last bear to go bull and knew that if I feigned it--the market would begin to crash. As indeed is the case!

I am extremely optimistic that we will see some mega drops this year and carnage as winter sets in. I will be on the prowl again as the despondency of winter sets in and the BIG ONE from the US hits our shores with a vengeance.

Yeah i think price will drop from 10-15% at the end of the year, and it will be possible to put an offer 10% bellow the asking price..As the press is finally doing a good job by starting to warn people so it should be happy daysss.

Like we said: le malheur des un fait le bonheur des autres ... sad but true :P

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Yeah i think price will drop from 10-15% at the end of the year, and it will be possible to put an offer 10% bellow the asking price..As the press is finally doing a good job by starting to warn people so it should be happy daysss.

Like we said: le malheur des un fait le bonheur des autres ... sad but true :P

In the 1990s HPC people were putting in offers of -20% to -30% below asking price and getting those kinds of offers accepted. The same will happen this time around as well.

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When the herd panics it's going to panic in a massive way. You only have to look at Northern Rock to see how fast confidence can evaporate.

...............

True.

This has been discussed on here many times but unique to previous crashes is the way people now communicate. 24hr news media, the Internet, SMS, just the general interconnected and relentless nature of modern communication. House Price Correction could very quickly gain velocity and become House Price Crash.

It really is different this time.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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