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Time to raise the rents.

Capital Economics To Throw In The Towel?

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Credit to whoops apocalypse for bringing this story to the forum in another thread. However I noticed this gem in there and think it deserves it's own thread. You bears are gonna love it!!!!

http://business.timesonline.co.uk/article/...1937569,00.html

Consumer spending and housing market prospects are also an uncertainty for the Bank. This week Capital Economics, one of the most bearish forecasters, is expected to drop its prediction of a 20% crash in house prices. Ideaglobal.com, the financial research consultancy, expects a 4% rise for next year.

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I agree that things are looking dire for 2006. This article posted yesterday sums it all up so I have to agree with TTRTR:

http://portal.telegraph.co.uk/property/mai...7/ixptop12.html

Coming hot on the heals of the two CBI reports regarding the levels of consumer confidence and reduction in retail space we must all accept the inevitable I am afraid <_<

Not forgetting Countrywide's assessment that 2005 turned out to be the worst for sales for 30 years!

Also not forgetting the BTL crash coming up:

http://money.guardian.co.uk/news_/story/0,...1663467,00.html

The only bright spot left is a little humour over Christmas:

http://www.devilducky.com/media/26599

Edited by Realistbear

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Consumer spending and housing market prospects are also an uncertainty for the Bank. This week Capital Economics, one of the most bearish forecasters, is expected to drop its prediction of a 20% crash in house prices. Ideaglobal.com, the financial research consultancy, expects a 4% rise for next year.

Time to raise the rents.

Bulls are now resorting to predictions of predictions. Come back to us when Capital Economics has actually dropped their forcast of a 20% crash.

Also, why has the author cherry one of the most bullish of house price predictions around (many VIs have no expections for price rises for several years).

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Could it be that they know when to give up, unlike many here at the forum?

:D

I doubt they would see it as "giving up". They are in the business of making predictions, and they may have decided that their prediction needs revising. What is important is getting the prediction right. It's not like they are a political party which has been campaigning for something and have decided that nobody is interested.

Not everyone bearish on this forum believes in these massive drops that were predicted. Broadly, I feel that what I saw as being likely has already happened, namely that prices rise rates would move close or slightly below wage inflation. I wouldn't be surprised if there was a fairly large chance of some sort of drop over the next few years, but I'm not one of those who forsees an economic apocolypse in houses, unless that economic apocolypse occurs in the rest of the economy - in which case it's not exactly a bold prediction is it.

I'm getting slightly weary of the polarisation on this site. I broadly side with the bears, but too much of the argument recently has been from the extreme ends of the spectrum to keep my interest as high as it once was.

What I'm interested in is a genuine debate with exchange of interesting views, and moving ideas and knowledge forward. I think you are one of those who actually does try to do that generally, although I think you like a little pop at the bears just for fun too.

I'm getting a bit bored of newbie-bulls just popping up every week or so and making some wild prediction of 10% rises or whatever, and dredging up the weary old arguments that have been farily well put to bed in the historic threads.

I still think this forum is a good one, with a lot of high calibre people contributing, but I'm considering maybe cutting back and only reading it once a fortnight perhaps, just because I feel the polarisation has become a bit static.

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I doubt they would see it as "giving up". They are in the business of making predictions, and they may have decided that their prediction needs revising. What is important is getting the prediction right. It's not like they are a political party which has been campaigning for something and have decided that nobody is interested.

What I'm interested in is a genuine debate with exchange of interesting views, and moving ideas and knowledge forward. I think you are one of those who actually does try to do that generally, although I think you like a little pop at the bears just for fun too.

1/ How would you feel if you'd paid your Capital Economics fee of £15,000 + per year & they were wrong?

2/ Well spotted. I love to have a stab, but I also try to be reasoned when arguing a point. IMO this is because there are so many different personalities in the bear camp on this site. So whilst I'm having a go, I'm sub-conciously directing things at certain groups.

This thread of course is directed at those who felt that Capital Economics were the gods of the HPC.

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Guest Charlie The Tramp

Just another false hope?

There are thousands and thousands of debtors living a false hope. <_<

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Their timing was out.

00c6ct.gif

Can you explain this graph a little.

The 1st 'cycle' appears less a cycle and more a continuation upwards right through '74 and onto '80.

I assume it relates to nominal prices and hence inflation of the late 70's early 80's changes the graph considerably?

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I can't help but notice how horizontal the real line is versus the downward prediction.

Just another false hope?

Statistically speaking, there has never been a plateau after a bubble. The history of crashes and bubbles since 1952 that appears on HPC Home Page shows a fall of approximately 50% of the previous peak. Never a flattening out. When markets stall and there is oversupply and other elements of fiscal drag prices tend to do what they always do--drop. And drop in proportion to their previous rise. We should see the bottom of the next crash at around 50-60% of the peak prices.

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I have pointed out on other threads - their prediction has already come true - at least where I live.

Bored quoting the FACTs round here.

2 bed new builds are down 20% on selling prices of 2 years ago. There is a development of 2 bed flats just over the road from Crowthorne station. Been on the market about 8 months now. Started at £230k. Board outside now says 'prices from £189950'. They never used to mention prices on the boards.

4 bed detached houses that would have sold for 500k 2 years ago are now selling for 400k.

Lots of new 2 bed new builds have not been sold - 2 years after being built - they are being rented out.

In many cases houses are now going on the market for 10% less than they would have 2 years ago - and selling a good bit below that.

I don't understand all you people that think HPC has not and is not happening. It is here. Some of the stuff further up market is now a LOT cheaper. 2 to 3 years ago relatively ordinary 5 bed houses on a third of an acre were nudging the million mark.

Now they're back in the 700s.

Edited by Marina

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I have pointed out on other threads - their prediction has already come true - at least where I live.

Bored quoting the FACTs round here.

2 bed new builds are down 20% on selling prices of 2 years ago. There is a development of 2 bed flats just over the road from Crowthorne station. Been on the market about 8 months now. Started at £230k. Board outside now says 'prices from £189950'. They never used to mention prices on the boards.

4 bed detached houses that would have sold for 500k 2 years ago are now selling for 400k.

Lots of new 2 bed new builds have not been sold - 2 years after being built - they are being rented out.

In many cases houses are now going on the market for 10% less than they would have 2 years ago - and selling a good bit below that.

I don't understand all you people that think HPC has not and is not happening. It is here. Some of the stuff further up market is now a LOT cheaper. 2 to 3 years ago relatively ordinary 5 bed houses on a third of an acre were nudging the million mark.

Now there back in the 700s.

I think that Capital will revise there prediction and spread the decline over the next 2 yrs.... If they dont more fool them! The writings on the wall and if they have cold feet now they look stupid.. If they stick to their guns then they look like the realist within a gang of short sited VI's who dont want to say anything to upset the cart..

Wait until April. Then we will have some interesting news.. Interest rate cuts or not!

[ Edited by Moderator ]

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" This week Capital Economics, one of the most bearish forecasters, is expected to drop its prediction of a 20% crash in house prices"

JUST WHEN the slide has begun... Ironic

Watched markets do not crash. The crash comes when the last bear turns bullish and everybody sighs a breath of relief that "the crash has been avoided". Sounds familiar in the last couple of months' headlines?

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Watched markets do not crash. The crash comes when the last bear turns bullish and everybody sighs a breath of relief that "the crash has been avoided". Sounds familiar in the last couple of months' headlines?

This is of course correct. I believe that the correction will come when virtually every last bear (including many on this forum) throw in the towel. Being a paid up 'contrarian', I've been delighted by the widespread talk that, "a crash has been avoided, and we've had the soft landing".

I'm more convinced than ever that next year will be a down year for property, purely because most people I speak to are so relaxed.

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I wouldn't be surprised if there was a fairly large chance of some sort of drop over the next few years, but I'm not one of those who forsees an economic apocolypse in houses.

But is there not something in between 'some sort of drop' and 'apocolypse'? How about 'substantial falls to bring prices into line with historical average'? I know that tony blair has put us all of the idea of a third way but still!

'The crash will happened when the last bear has turned bullish'?? Bugger.

Edited by North London Rent Girl

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Statistically speaking, there has never been a plateau after a bubble. The history of crashes and bubbles since 1952 that appears on HPC Home Page shows a fall of approximately 50% of the previous peak. Never a flattening out. When markets stall and there is oversupply and other elements of fiscal drag prices tend to do what they always do--drop. And drop in proportion to their previous rise. We should see the bottom of the next crash at around 50-60% of the peak prices.

Isn't it interesting then that pre 1952 and post 1996 letting laws are similar, but that the 1952 to 1996 period is the anomoly.

In short, 1952 to 1996 was a market for OO's only. They'd either be buying or selling. Now they're competing with private investors.

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Isn't it interesting then that pre 1952 and post 1996 letting laws are similar, but that the 1952 to 1996 period is the anomoly.

In short, 1952 to 1996 was a market for OO's only. They'd either be buying or selling. Now they're competing with private investors.

That will be pleased to invest in something that yields 1% and loses 10% of its value in a year

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I'm getting slightly weary of the polarisation on this site. I broadly side with the bears, but too much of the argument recently has been from the extreme ends of the spectrum to keep my interest as high as it once was.

I think the tone of the forum has changed quite alot. It used to be dominated by STR bears who were hoping to gouge somone's eyes out and get a better house for cheap when the crash came. Now we seem to have an increasing number of leftie bears who want a crash because they don't have the ability or desire to generate enough wealth to buy the house they'd like.

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I think the tone of the forum has changed quite alot. It used to be dominated by STR bears who were hoping to gouge somone's eyes out and get a better house for cheap when the crash came. Now we seem to have an increasing number of leftie bears who want a crash because they don't have the ability or desire to generate enough wealth to buy the house they'd like.

I think you should say house they deserve... My wages are in the top 15% of the country I want a house that is one of the top 15% in the country! I dont think I should have to earn wages in the top 1% to get it!

Justice will be served...

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I think you should say house they deserve... My wages are in the top 15% of the country I want a house that is one of the top 15% in the country! I dont think I should have to earn wages in the top 1% to get it!

Justice will be served...

But you don't get what you deserve you get what you can afford. Harbouring such a curious sense of entitlement will only leave you bitter and twisted.

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But you don't get what you deserve you get what you can afford. Harbouring such a curious sense of entitlement will only leave you bitter and twisted.

Soooo who pays for these houses? If I cant and I am in the top 15% wage earners...... Its not entitlement its reality...

Do I have to rent a car because I cant afford one? no its priced within my means.... I cant buy a porshe but hey I am not in the top 5% so I understand I have to work harder to have one......

People like you are the ones in denial!

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I think you should say house they deserve... My wages are in the top 15% of the country I want a house that is one of the top 15% in the country! I dont think I should have to earn wages in the top 1% to get it!

Justice will be served...

You have overlooked something in your simplistic view.

i.e. a lot of property changes hands through inheritance.

Also, top 15% wages are still probably pretty low if you mean top 15% of the population.

As the previous poster said, lower your expectations (or get a better job).

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  • 301 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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