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easy2012

Ft: To Buy Or Not To Buy?

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(click through to read, looks like no registration needed for this one)

http://www.ft.com/cms/s/2/b6b07228-ab21-11df-9e6b-00144feabdc0.html

There are two broad schools of thought about the determinants of house prices. Jean-Michel Six, chief economist in Europe at Standard and Poor’s, the rating agency, adopts a financial market perspective. In his view, we might not yet have witnessed a full correction of some of the imbalance that the 1997-2007 housing bubble created, such as decreasing affordability or surging price-to-rent ratios. The housing market is like other financial markets: price expectations create momentum that drives prices arising from normal affordability ratios. But they must eventually return to these norms through “mean reversion”, creating the endemic booms and busts of cycles.

By contrast, Lucian Cook, director at Savills, the international estate agency, looks more to fundamentals of supply and demand for property itself. But he is also gloomy. He emphasises sluggish demand and he argues that “the slide looks more correlated with the economy, with sentiment turning just as things here look worse for people’s wallets”. He adds: “Price movements can lie but transaction numbers never do, and they are now much lower than last year’s even though mortgage availability has improved.”

[.quote]

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We need an "Event", something that suddenly tells all "Its over"......."Wake up & smell the coffee"....Not sure what, but once the press pack sink their teeth in......we there.

Mike

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Enjoyable article. Definitely worth a 'click through'.

Interesting juxtaposition of the different views on what makes housing 'markets' tick.

Yet, no matter who looks at it or how, the general consensus seems to be that we're not at the bottom.

Not by a long chalk.

I'm rerally enjoying the overwhelming sense of bearishness in the press this summmer.

Bring it on.

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Enjoyable article. Definitely worth a 'click through'.

Interesting juxtaposition of the different views on what makes housing 'markets' tick.

Yet, no matter who looks at it or how, the general consensus seems to be that we're not at the bottom.

Not by a long chalk.

I'm rerally enjoying the overwhelming sense of bearishness in the press this summmer.

Bring it on.

Much as I'd like to agree, I don't know if we read the same article here because what I took from it was that there was little prospect of significant falls in the UK, particularly for better houses on better areas. As for a"general" sense of bearishness, the property market here in Brighton has been its usual crazy self all summer. One way or the other I draw the conclusion that the best anyone can hope for is a long term steady reduction of house prices against inflation...which is very different from an increase in affordability, let alone a "crash". It just is not going to happen.

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  • 245 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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