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Thankfully, A Housing Boom Is A Long Way Off, But That Will Not Dampen Growthi

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Even a mention for housepricecrash as a fun site!

http://www.independent.co.uk/news/business/comment/hamish-mcrae/hamish-mcrae-thankfully-a-housing-boom-is-a-long-way-off-but-that-will-not-dampen-growth-2293046.html

If Spain is the most challenged housing market in the eurozone, and the US is second only to Ireland in experiencing the largest slump relative to the peak, what about the UK?

The first thing to say is we are not going to be getting big increases in rates at the moment, and the expectation of an increase this summer has now receded to the autumn and beyond. On the other hand, the people on mortgages linked to base rates will not enjoy their ultra-low rates for ever, so there is in a sense an artificial support for the market. Savers subsidising home-buyers bring long-term social and economic consequences.

There are as many house price forecasts as there are economists, and if you are interested, there is a fun website called housepricecrash.co.uk. But ignoring some of the more outlandish predictions, the general view seems to be of flat or slightly falling prices for the next couple of years. You can catch a glimpse of the longer-term trend from the graph on the right. Prices, with these falls, seem now to be back more or less to the long-term trend. In other words, prices are not cheap by any means, but they are no longer ridiculously expensive.

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That's a wonderfully optimistic view of the housing market. Goldman Sachs reckon house prices are less challenging. That's not what I observe in the South East. Prices still look very high compared to salaries........ well for those that still have jobs that is!

Either Sterling takes a big tumble or house prices will.

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And in France, Spain, Belgium and Britain, prices are still nearly double the level they were then. It may not be much fun if you own a house in southern Spain that you can't sell, but if you think in terms of the wealth held in those houses, it is enormous.

What a fun statement :rolleyes:.

If the houses were really worth double the level they were in 2000, you'd be able to sell the damn things not just count your imaginary wealth ;).

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What a fun statement :rolleyes:.

If the houses were really worth double the level they were in 2000, you'd be able to sell the damn things not just count your imaginary wealth ;).

+1

And I have a ten year old bike in the shed 'worth' ten million quid - just haven't found a buyer for it yet..

Is a frontal lobotomy a prerequisite for journalism these days?

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What a fun statement :rolleyes:.

If the houses were really worth double the level they were in 2000, you'd be able to sell the damn things not just count your imaginary wealth ;).

Nicely and succinctly put.

On an individual scale that would at least be harmless. It's a shame that our economists, bankers, politiicians and news organizations have all bought the delusion. It has created the fiasco of desperate measures to ensure that citizens don't lose their imaginary wealth, by taking actions that will destroy the real wealth and value within the nation.

Edited by ingermany

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"it was the mis-pricing of risk in the US housing market that triggered the global financial meltdown, the sub-prime crisis."
Here in the UK, where the market had recovered a bit, prices seem to be moving sideways, firming a little in London and the Home Countries, but weakening elsewhere. This would reflect – but also be a cause of – the pause that seems to have happened in growth

So Hamish McRae thinks "it started in America" and that rising house prices are our only way of achieving economic growth. I remember another Socttish person who had those little catchphrases.

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The housing 'Market' does not exist.

Not in the widely accepted definition of a 'free market' Probably the market in which McRae bought his own house. The Housing Market has been bastardised into a 'State Controlled Planned Economy', where the government regulates and dictates, prices.

Undemocratically, Unfairly, and unjustly.

Its Economic Fascism. [Neo Corporatism]

The most notable characteristic of a fascist ideology, being the seperation and or persecution of one section of a society at the expense of another.

'It was the mis-pricing of risk in the US housing market that triggered

the global financial meltdown, the sub-prime crisis. Meanwhile in the UK............................'

In America, the Glass-Steagall Act had protected deposit-taking commercial banks from the risky activities of the investment banks. Yes.

Congress was effectively obliged to repeal the Act in 1999 because New York was losing its business to London, which had no such restrictions and the "light touch" regulation encouraged by Gordon Brown.

[The mis pricing of risk, was occuring equally in the UK. Because Wall Street investment banks, were operating out of London. Geographical boundaries make no difference.]

Britain did have a choice. [brown] had many choices.

He chose to bend over for the bankers, and destroy the economy.

There is a long list of Labours disastrous policies, one after another, which were deliberate, with the sole purpose of inflating the housing bubble, which destroyed the dreams and aspirations of generations, who only wanted a home they could afford.

Quick Gordon, lets try and distance ourselves from 13 years of nightmarish rule.........The people are so stupid they should fall for it.....................

Edited by Dan1

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Another person misinterpreting the trend line.. even relatively intelligent people are being confused by the distortion caused by the recent peak.

You would have thought the seemingly exponential trend line on an inflation adjusted graph might be a bit of a give away..

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"flat or generally falling prices in the next two years?"

Which is it.?

Oh its fun to be posting here.

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So Hamish McRae thinks "it started in America" and that rising house prices are our only way of achieving economic growth. I remember another Socttish person who had those little catchphrases.

Meanwhile the "Most popular in Business now" article on the site is US house price fall 'beats Great Depression slide'

So that'll be coming here as well then won't it McRae

oh and this article is next UK economic recovery on the verge of collapse

Still despite their recent article Millions of young adults 'will never be able to afford their own homes' he still thinks "Prices, with these falls, seem now to be back more or less to the long-term trend. In other words, prices are not cheap by any means, but they are no longer ridiculously expensive."

Perhaps journos can claim double time for writing unjustified positivism.

PS- From the US article "The peak-to-trough fall in house prices in the 1930s Depression was 31 per cent – and prices took 19 years to recover after that downturn" I think a lot of people are entering the market for a house they really want knowing the price will go down but expecting it to recover so they can live with a few years of negative equity. Or they're holding off from selling for prices to rise and they'll just rent the house out for a few years. More like nearly the whole term of your mortgage!!! Damn i'm putting that quote in my sig.

Edited by athom

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Nicely and succinctly put.

On an individual scale that would at least be harmless. It's a shame that our economists, bankers, politiicians and news organizations have all bought the delusion. It has created the fiasco of desperate measures to ensure that citizens don't lose their imaginary wealth, by taking actions that will destroy the real wealth and value within the nation.

Yes it's amazing that an economist doesn't acknowledge that the financial value of something you can't sell is exactly ZERO.

In fact if you have a mortgage on it - it's far worse than zero.

Amazing - but not at all surprising. Debt is, after all, wealth.

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It may not be much fun if you own a house in southern Spain that you can't sell, but if you think in terms of the wealth held in those houses, it is enormous.

The author is an idiot.

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The author is an idiot.

We need the odd buffoon. That's what makes hpc such a fun site.

buffonic plague.

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So what happens next? On the one hand, it seems unlikely that there will be any early resumption of a housing boom anywhere.

So not going for the soon to be a 16% soaring increase in house prices as mentioned in the Express.

What they'll make of any double digit drops in price is anybody's guess but the Independent always was a fun sort of paper.

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...housepricecrash.co.uk....the general view seems to be of flat or slightly falling prices for the next couple of years....

Indeed how he concludes that from HPC is another anybody's guess but it's likely been put under the general heading of misleading information.

Edited by billybong

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You would have thought the seemingly exponential trend line on an inflation adjusted graph might be a bit of a give away..

:lol:

Yes! And it's not even seemingly exponential!

Moronism of the first water from McRae. And I don't really get a strong sense of what the article is trying to say, either.

A housing boom is a long way off but prices won't fall much? Why not?

The indolent market won't drag on growth? Why not?

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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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