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Kyoto

Ig Index Markets Pricing In 5%+ Fall For 2011

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Thought I would have a flutter on house prices to make a bit of extra cash from the falls, but seems that the markets are at least as bearish as I am!

screenshot20110207at220.png

These are basically the future prices (in 000s) that the market expects, based on the Halifax index.

The good thing is that these guys (who are actually risking money) are usually more accurate than all of the VI's combined.

Edit - bad maths!

Edited by Kyoto

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Falls of around 7 percent this year and for the next couple of years sounds about right to me. I think that it is what the government is aiming for, and is shallow enough such that the banking system doesn't collapse again. Frustratingly slow for a HPCer though. Horrible spreads on that account, the only person making any money will be the broker.

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I wonder if it's better to bid on HP rises? If they fall, you win, if they rise, you win :) .

I suggested to my Chelsea-supporting wife that she should bet against them for a win-win. This suggestion was not appreciated.

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Guest

I wonder if it's better to bid on HP rises? If they fall, you win, if they rise, you win :) .

With the appropriate values risked this would be a hedge. I.e. if I owned an exactly average house worth 160k, I could sell the future for £1000 per point. If house prices rose £1000, I gain £1000 on my house but lose £1000 on the futures. (Ignoring fuding costs and spreads).

The opposite position could be taken, I do not own a house, the house I want is on for £160k, if I buy the future @160 for £1000 per point, then I can hedge against house price increases. If the house (that I don't own) goes up by £1000, it now costs £161k and the extra £1k is the profit in my future position.

So to slight change your original quote

I wonder if it's better to bid on HP rises? If they fall, you winbreak even ignoring funding costs & spreads, if they rise, you winbreak even ignoring funding costs & spreads :) .

Edited by Guest

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At 7% that would be just over 0.5% a month, which by my back of the envelope calculations is just over the point at which it is better to rent than buy, but very little in it!

If I knew for sure it would be at that rate I think I would throw in the towel and buy now, if I could!

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Thought I would have a flutter on house prices to make a bit of extra cash from the falls, but seems that the markets are at least as bearish as I am!

screenshot20110207at220.png

These are basically the future prices (in 000s) that the market expects, based on the Halifax index.

The good thing is that these guys (who are actually risking money) are usually more accurate than all of the VI's combined.

Edit - bad maths!

So December 2011 they think the Halifax will be £152,700

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  • 312 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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