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BlinkTooFast

Nationwide House Price Data Chart

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Maybe this has been done before, but either I have never seen it, or it never stuck in my head.

I took the inflation adjusted NW data, picked out the peaks and troughs, and added four trendlines.

The red trendline is NW's data. There is a thin black line superimposed on it. That is Excel adding an "exponential" trendline. It is visibly a good fit, so I used this method for the next two lines, too.

Of course, you're all ahead of me and can see that the trendline on the peaks goes off to the moon, whilst the trendline on the troughs lingers around relatively close to flat.

Seems reasonable to me that the current cycle is going to descend to that lower black trendline. And using the same trendline algorithm as NW appear to use.

nwtroughtrend.png

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but will it reach the lower line in 2015 - the natural resolution of the last 18 year cycle, or 2033, the next trough in the 18 year cycles

(thing being the first trough maybe a shallow trough, propped up by govt stimulus etc)

Edited by Si1

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but will it reach the lower line in 2015 - the natural resolution of the last 18 year cycle, or 2033, the next trough in the 18 year cycles

(thing being the first trough maybe a shallow trough, propped up by govt stimulus etc)

Taking the graph in isolation, it looks as though the period and amplitude both increase with each successive cycle.. if that were are car I'd say the wheels are about to fall off!

Very interesting graph by the OP though. I expect it has been done before, but not for a while.

That lower trend line... we can but hope :)

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I think there is some preconception that they are exponentially increasing trendlines.

To my eye you would probably get an "as good" (or actually better) fit with a straight line liear regression.

Could you add those on just to show.

If you look at the r values for the trend lines you can see which technically fits better, but really there aren't enough points to draw anything too meaningful.

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I think there is some preconception that they are exponentially increasing trendlines.

To my eye you would probably get an "as good" (or actually better) fit with a straight line liear regression.

Could you add those on just to show.

Agreed - common sense says that whilst nominal prices can increase exponentially, inflation adjusted ones cannot. I was just treating the data the same way that NW does.

nwlinear.png

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Just for reference. It's looking more and more like it every day.

1q4z6ekpXkz9uypmDTEhgwJqo1_400.jpg

we've just had the 'first sell off' and now we're in the bear trap...

: (

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Agreed - common sense says that whilst nominal prices can increase exponentially, inflation adjusted ones cannot. I was just treating the data the same way that NW does.

nwlinear.png

Thanks for that !

Whenever I see HP graphs with exponential trendlines I worry about how they influence people, as they just reinforce the ideas of "property is a risk-free investment", "property will make you rich", "don't miss the boat", etc. Of course your point about nominal versus inflation adjusted prices is correct, but how may people who look at these graphs see and understand that.

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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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