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House Price Prediction Time!

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Where will house prices be at the end of 2011 according to Halifax/Nationwide indices?

I will predict that house prices will nationally decline 5% for the remaining 6 months of the year - obviosuly there will be regional variations.

Any views?

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I'll stick with what I said at the start of 2011 that we will see a 10% over this year. Although I admit we need to speed things up a bit for it to be right!

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I'll stick with what I said at the start of 2011 that we will see a 10% over this year. Although I admit we need to speed things up a bit for it to be right!

+ 2

with falls continuing in 2012

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Was pondering last night whether the number of years up to the peak matches the number of years down. Seems to have been the case last time. This time round, prices went up for 11 years, so we aren't even at half the duration of the downturn yet by this theory.

I think there will be a grinding down of prices with low volumes for the next couple of years. At the same time this levels off, IRs will go up and there will be a swifter third leg down that few predicted. This will ultimately all result in the average house price by 2018 being in real terms at today's 100K.

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Down no more than 3% for the rest of the year as measured by Halifax/Nationwide May not sound a lot but that *is* crash-cruise speed when inflation is factored in.

The market will continue to be supported in nominal terms by ongoing ZIRP and strong rents.

I have said it before that I think we are closer to a nominal bottom than many people here think. This HPC is now 4 years in the making. We have had the period of large nominal falls in the first 2 years, a bounce, and now we are beginning the period of the long grind down where the adjustment will be done mainly through inflation with small nominal falls to help it along.

2nd-half 2011: -3% nominal, -5% real.

2012 : -3% nominal, -7% real.

2013 -2% nominal, -5% real.

2014: flat nominal, -3% real

Total: -19% over the next 3.5 years that will give us our "50% drop in real terms" from peak.

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For a few months I have been saying 7-8% by year end. This thread gives me the opportunity to re-visit that assertion. I am going to ignore the way these orgs do their YoY and my figures are based on comparing the same calendar month 12 months apart.

The first thing to note is that they are diverging.

In the 3 months Jan - April, Halifax is down 3.5% but nationwide is up 2.3% in the same period. as such, they have to be treated seperately, rather than expecting them to perform in the same manner.

Looking at the Halifax figures, their bottom Apr 09 was £155k. April 2010 was £168,202. April 2011 £160395.

The annual rate to April is is -4.6%. A figure of -4.6 by year end would leave us a smidge under the April 2009 low! I'll happily take that, but I'm, going to stick my neck out and say £152k which would be -6.1%.

And now, what do I think the Nationwide will do........

+5.8%!!! Just ahead of RPI and best of all tax free!!!!! You cant go wrong with bricks and mortar!!! :)

Edited by Caveat Mortgagor

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I have no idea about timing or drops in nominal terms, but I'll say again they needed to halve in real terms from the top, so bottoming at somewhere about a hundred on the scale on this graph and about five or ten years off, I'd guess, looking at it by eye:

homepage.png

That sounds in the ball park to me.

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For a few months I have been saying 7-8% by year end. This thread gives me the opportunity to re-visit that assertion. I am going to ignore the way these orgs do their YoY and my figures are based on comparing the same calendar month 12 months apart.

The first thing to note is that they are diverging.

In the 3 months Jan - April, Halifax is down 3.5% but nationwide is up 2.3% in the same period. as such, they have to be treated seperately, rather than expecting them to perform in the same manner.

Looking at the Halifax figures, their bottom Apr 09 was £155k. April 2010 was £168,202. April 2011 £160395.

The annual rate to April is is -4.6%. A figure of -4.6 by year end would leave us a smidge under the April 2009 low! I'll happily take that, but I'm, going to stick my neck out and say £152k which would be -6.1%.

And now, what do I think the Nationwide will do........

+5.8%!!! Just ahead of RPI and best of all tax free!!!!! You cant go wrong with bricks and mortar!!! :)

They both measure the same thing - house prices. How can you expect one to continue going down, and the other to continue going up? It ain't gonna happen. Look back historically to see how closely they follow each other. The last quarter divergence is nothing more than a blip.

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Down no more than 3% for the rest of the year as measured by Halifax/Nationwide May not sound a lot but that *is* crash-cruise speed when inflation is factored in.

The market will continue to be supported in nominal terms by ongoing ZIRP and strong rents.

I have said it before that I think we are closer to a nominal bottom than many people here think. This HPC is now 4 years in the making. We have had the period of large nominal falls in the first 2 years, a bounce, and now we are beginning the period of the long grind down where the adjustment will be done mainly through inflation with small nominal falls to help it along.

2nd-half 2011: -3% nominal, -5% real.

2012 : -3% nominal, -7% real.

2013 -2% nominal, -5% real.

2014: flat nominal, -3% real

Total: -19% over the next 3.5 years that will give us our "50% drop in real terms" from peak.

As has been said many times on here, if you have inflation without wage increases, then house prices will crash.

If you get high inflation with equivalent wage increases, then interest rates will rise, and we are going to get a crash in house prices in real terms.

The only way we will have house prices staying static is if we get wage increases, and low inflation. Do you think that's likely...?

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I'll stick with what I said at the start of 2011 that we will see a 10% over this year. Although I admit we need to speed things up a bit for it to be right!

+ 3. My 'watchlist' (and I am obsessive enough to really be watching...) has shown considerable signs of capitulation over the last 2 weeks. Hardly science, I know, but I think we can make -10% by the end of the year. It only requires 1.5% drops per month, which has been seen before...

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I'll stick with what I said at the start of 2011 that we will see a 10% over this year. Although I admit we need to speed things up a bit for it to be right!

Nah! It's too late for 10% falls this year, i'd welcome them but that would be such a momentum we'd see 20% and not 10%

So 2-3% looking more likely.

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I think we will get some people droppin asking prices come October - EAs in Swansea are already giving out the nonsense that no one buys in the Summer and that Sept is the boom month - but I suspect that ultra low IRs will keep most sitting in their houses thinking they are worth squillions.

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The spring bounce and the stamp duty deadline has no doubt impacted the figures...

Theoretically if foreign buyers in London start making up a greater and greater % of the national transactions, we could well see the indices rising even though everyone outside the capital will see asking prices going down.

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As has been said many times on here, if you have inflation without wage increases, then house prices will crash.

If you get high inflation with equivalent wage increases, then interest rates will rise, and we are going to get a crash in house prices in real terms.

The only way we will have house prices staying static is if we get wage increases, and low inflation. Do you think that's likely...?

And as I have said many times, wages will catch up once the inflationary cycle has peaked - company will find their costs are no longer squeezed, and workers will push for higher wages after a period of falling real wages.

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And as I have said many times, wages will catch up once the inflationary cycle has peaked - company will find their costs are no longer squeezed, and workers will push for higher wages after a period of falling real wages.

With globalization? It ain't the 70's this time. Companies will off shore first. Also rates would have to be rising anyway and with debt saturation.

Happy endings are only in fairy tales.

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They both measure the same thing - house prices. How can you expect one to continue going down, and the other to continue going up? It ain't gonna happen. Look back historically to see how closely they follow each other. The last quarter divergence is nothing more than a blip.

Historic data counts for sh1t when circumstances change. We are in a situation where we have very low volumes, a particularly high proportion of cash-sales relative to those relying on mortgages and a higher proportion of 'prime' sales going through. Since both indices are only based on mortgage data and use their own unique method of mix-adjustment, these things will skew the figures as we are seeing.

Because of the sampling issues mentioned and the fact that Halifax and Nationwide only have circa 20% and 8% market share respectively of a shrinking mortgage market, I prefer the Land Reg (although the figures will be skewed upwards somewhat due to a lack of mix adjustment). Interestingly, the LR and Halifax's figures have correlated quite highly this year, with NW's figures deviating (so perhaps a big fall coming up on the NW?).

Anyway back on topic..I'm thinking around 5% down by Dec - spring 'bounce' come and gone, £1m+ stamp duty deadline passed, higher proportion of serious sellers, and sentiment increasingly undermined by 'gloom and doom' stories in the media. Falls accelerating next year as squeeze on disposable income starts to bite, sentiment eroded further and perhaps IR rises.

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And as I have said many times, wages will catch up once the inflationary cycle has peaked - company will find their costs are no longer squeezed, and workers will push for higher wages after a period of falling real wages.

Have to say I agree with Lepista. We are currently in the 4th year of wage deflation with no sign of that trend reversing. Wage inflation would not only have to catch up with RPI/CPI but reverse the years of wage deflation. Also this is not the 1970s, or the 1990s - the Unions have been severely weakened. And then of course there is Globalisation - not exactly conducive to rampant wage inflation.

Also we can add in income erosion from tax credit cuts, etc. that wage inflation would need to compensate for.

Off topic for this thread but I see that Ian Cowie, in the Daily Telegraph, was talking about a 'buyers strike' continuing in the UK property market.

Edited by Alfie Moon

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For a few months I have been saying 7-8% by year end. This thread gives me the opportunity to re-visit that assertion. I am going to ignore the way these orgs do their YoY and my figures are based on comparing the same calendar month 12 months apart.

...

Looking at the Halifax figures, their bottom Apr 09 was £155k. April 2010 was £168,202. April 2011 £160395.

The annual rate to April is is -4.6%. A figure of -4.6 by year end would leave us a smidge under the April 2009 low! I'll happily take that, but I'm, going to stick my neck out and say £152k which would be -6.1%.

For the Land Registry

April 2009 £152,898

April 2010 £165,596 +8.3%

April 2011 £163,083 -1.5%

Different again, but your prediction matches the LR 2009 low.

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Moving beyond the 2009 lows would attract some very welcome media attention, with house prices lower than at any point in the last seven years (in nominal terms). So much for them doubling during that period!

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-10% this year and another -10% next year. I think once we get beyond the summer the hard of understanding will then realise that there will be no growth and they cannot achieve the joke asking price by hanging around for the full asking price buyer to emerge and they will need to price appropriately to get any interest. I think we could have some big negative growth months towards the end of the year realising a nice 10% fall, then once this mindset sets in we will get the same if not more the year after.

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-10% this year and another -10% next year. I think once we get beyond the summer the hard of understanding will then realise that there will be no growth and they cannot achieve the joke asking price by hanging around for the full asking price buyer to emerge and they will need to price appropriately to get any interest. I think we could have some big negative growth months towards the end of the year realising a nice 10% fall, then once this mindset sets in we will get the same if not more the year after.

-5% 2011 and -5% 2012. But both figures doubled in real; terms by 5% inflation each year.

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Have to say I agree with Lepista. We are currently in the 4th year of wage deflation with no sign of that trend reversing. Wage inflation would not only have to catch up with RPI/CPI but reverse the years of wage deflation. Also this is not the 1970s, or the 1990s - the Unions have been severely weakened. And then of course there is Globalisation - not exactly conducive to rampant wage inflation.

Also we can add in income erosion from tax credit cuts, etc. that wage inflation would need to compensate for.

They had a phone in on Fivelive yesterday about the public sector pensions. Listening to it what was clear was the sense of entitlement from public sector workers... and the immense anger from private sector workers...

The unions may well find that in any strike situation that the Govt can find a few million people more than happy to take over the wages and reduced pensions of public sector workers.

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  • 284 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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