House Price Falls Forecast To Continue

[Bruce Banner]

Just shown on Sky News..

FT front page headline for tomorrow...

"House Price Falls Forecast To Continue"

[jfk]

[thecrashingisles]

http://www.ft.com/cms/s/0/15a94576-12c8-11e0-b4c8-00144feabdc0.html

House prices have further to fall in 2011 as government austerity measures bite and banks continue to restrict the supply of mortgages, say economists polled by the Financial Times.

UK house prices fell by 20 per cent from a peak in 2007 to a trough in 2009 and subsequently recovered roughly half those losses. But since the summer, prices have again been slipping and economists expect them to fall further.

Of the 56 economists who expressed a firm view in the FT’s poll, 50 thought prices had further to fall, against six who thought they would rise. Most of the economists did not expect a crash but for prices to fall by 5-10 per cent as households struggled with tight finances.

“Traditionally, in the absence of distress selling, the UK housing market adjusts more through volumes than prices, so prices are likely to slip rather than plummet next year,” said Ian McCafferty, chief economist of the CBI employers’ body.

...

When asked whether the nation should worry about house price declines, economists were split. Many believe prices are still fundamentally too high and causing social problems, so a movement lower represents a normalisation in the market.

Willem Buiter, chief economist of Citi and a former member of the monetary policy committee, said: “Anything that reduces UK house prices has to be a good thing on balance.”

Some economists said housing market weakness would undermine the economy. Mike Dicks, of Barclays Wealth, said: “Debt deflation can kill off a recovery, or keep it from gathering strength in the normal fashion.”

Danny Gabay, of Fathom Consulting, said that “the risk of further falls in house prices is the biggest obstacle to a sustained recovery”.

Edited December 28, 2010 by thecrashingisles

[Redcellar]

Excellent.

But why frontpage?

[The Masked Tulip]

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[thecrashingisles]

Excellent.

But why frontpage?

Houses are the British economy.

[Redcellar]

Houses are the British economy.

Doh.

I forgot.

[kinesin]

[eric pebble]

Houses are the British economy.

So true....

[Redcellar]

I love the picture. House prices to plummet like Eddie the Eagle on a ski jump?

[The Masked Tulip]

And that new Chinese missile has just made the new UK aircraft carriers redundant.

[Redcellar]

And that new Chinese missile has just made the new UK aircraft carriers redundant.

That was our old trick.

USA built the first stealth plane, billions of dollars cost.

We build a better radar for a few million. May have been only a few hundred grand, but the point is the same.

[Fairies Wear Boots]

Newspapers don't really like to scare people and overstate house price falls so if they're forecasting a drop of 10%, then next year should be quite fun.

[South Lorne]

...not exactly news ...more restating the logical norm....

[Tired of Waiting]

(...) FT front page headline for tomorrow...(...)

Of the 56 economists who expressed a firm view in the FT’s poll, 50 thought prices had further to fall, against six who thought they would rise. Most of the economists did not expect a crash but for prices to fall by 5-10 per cent as households struggled with tight finances.

Most of the economists expect nominal prices to fall by 5-10 per cent in 2011. I guestimate inflation around 5%. Hence, real fall 10-15%.

[Pytyr]

Most of the economists expect nominal prices to fall by 5-10 per cent in 2011. I guestimate inflation around 5%. Hence, real fall 10-15%.

no, no, no. Real and nominnal only matter when wages are going up. Same share of a shrinking wage pool means nominal equals real no matter what the headline inflation rate is.

[Alan B'Stard MP]

And that new Chinese missile has just made the new UK aircraft carriers redundant.

Is the range of the missile more than half that of the aircraft?

[Caveman]

It seems to me that the media are finally accepting the inevitable and are now scrambling to appear wise. I'd wager that Sibley etc are cackin' it.

[Pole]

It seems to me that the media are finally accepting the inevitable and are now scrambling to appear wise. I'd wager that Sibley etc are cackin' it.

yep, this is it. The game is over and they know it.

2011 will be the year.

I can't think of any new idea that the government can use to prevent the long awaited house price crash.

[dances with sheeple]

yep, this is it. The game is over and they know it.

2011 will be the year.

I can't think of any new idea that the government can use to prevent the long awaited house price crash.

Yes, there is no going back now, panic will snowball as the sheeple realise this IMO.

[Caveman]

yep, this is it. The game is over and they know it.

2011 will be the year.

I can't think of any new idea that the government can use to prevent the long awaited house price crash.

I'm not so sure - we all know IR's & unemployment are the key. I'm just happy because the recent swell of 'bad news' articles will be getting through to the masses.

[The Masked Tulip]

Yes, the masses will be in shock in the morning when they pick up their daily FT

[dances with sheeple]

I'm not so sure - we all know IR's & unemployment are the key. I'm just happy because the recent swell of 'bad news' articles will be getting through to the masses.

This is also key, because if the "Idiot Lantern" (does Mr. Parry still post?) tells the sheeple to take a dump, they will take a dump.

[Bruce Banner]

I'm not so sure - we all know IR's & unemployment are the key. I'm just happy because the recent swell of 'bad news' articles will be getting through to the masses.

Sentiment is the key.

[Caveman]

Yes, the masses will be in shock in the morning when they pick up their daily FT

I may purchase a copy and put it on the reception desk at work - I work for a large insurance co. with about 800 staff at my office.