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http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

LONDON (AFX) - One of the leading pessimists on the UK's housing market has conceded that its prediction of an overall 20 pct collapse in prices is not going to materialise and is now forecasting a 5 pct decline over the next two years.

Though Capital Economics continues to think that the UK's housing market is "fundamentally overvalued", it has adjusted its view of the likely scale and timing of the adjustment, given lower interest rates, higher-than-anticipated employment levels and a loosening in mortgage lending criteria.

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http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

LONDON (AFX) - One of the leading pessimists on the UK's housing market has conceded that its prediction of an overall 20 pct collapse in prices is not going to materialise and is now forecasting a 5 pct decline over the next two years.

Though Capital Economics continues to think that the UK's housing market is "fundamentally overvalued", it has adjusted its view of the likely scale and timing of the adjustment, given lower interest rates, higher-than-anticipated employment levels and a loosening in mortgage lending criteria.

It looks like they too have little faith in the BOE.

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This doesn't look good as Capital Economics, a bear who have previously repeated a 20% drop are now changing to only a 5% drop over 2yrs, makes them look stupid :unsure:

Are they not simply revising their forecast based on the best information available to them now?

Surely they would look more foolish if they refused to adjust their forecast and then were proved wrong.

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No need to panic

Capital Economics have already proved that they are no dab hand at the whole forecasting game in the past, and I would not expect them to be any better in the future.

Anyone predicting a 20% fall in the current climate is going to look silly - what do you expect CE to do - stick their neck out for the "n"th year running ? Or revise their forecast to a "modest drop" type scenario. 5% nominal is 9% (ish) in real terms, of course.

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"None of this is to suggest that the danger of a sharp fall in house prices has evaporated altogether," said Ed Stansfield, Capital Economics' property economist"

Forecasts like are 'point' forecasts, the most likely outcome of a range. CE are now saying that -5% is more likely than -20%. And I'd have to agree. In Ireland the government is going to do anything it can to shore up property prices-- there's election in <18mths. In the UK, I've no doubt that rates will be cut in an effort to stave off a correction for same political ends. And in both countries man-on-the-street sentiment simply hasnt turned bearish at this point and neither incumbent government will win next election if it does. So the event horizon is a little further off than I thought say 3 months ago.

"Though Capital Economics continues to think that the UK's housing market is "fundamentally overvalued", it has adjusted its view of the likely scale and timing of the adjustment, given lower interest rates, higher-than-anticipated employment levels and a loosening in mortgage lending criteria"

Problem is subsiding mortgage holders or printing more money just worsens a bad situation; the driver is already p1issed and will wrap his car around the first lamppost, so a few more drinks wont matter a damn. As we know, prices have shot too high, they've gotten that way on a cocktail of negative real rates (cos we all know inflation aint 2%) and unchecked speculative demand. Ultra high prices divorced from incomes, unprecedented debt levels, and speculative mania = simply no possibility of a good outcome for prices going forward. It's all the unlearned lessons of tulips, south seas and 1920-29 wrapped into one massive bomb.

Look, wandwave all you like, the writing is still on the wall. The real question is how to protect oneself from this godawful mess.

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This doesn't look good as Capital Economics, a bear who have previously repeated a 20% drop are now changing to only a 5% drop over 2yrs, makes them look stupid :unsure:

:lol::lol::lol::lol:

Some of us already knew they looked stupid and said it over & over......

We should also examine the sheep that followed them into the abyss as well.

BTW, I enjoyed using your round table thingy as toilet paper today.... :D

Edited by Time to raise the rents.

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Guest Charlie The Tramp

Hi TTRTR

Did you get round to reading the RBA`s warning published on 27th September.

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:lol::lol::lol::lol:

Some of us already knew they looked stupid and said it over & over......

We should also examine the sheep that followed them into the abyss as well.

BTW, I enjoyed using your round table thingy as toilet paper today.... :D

It's called passive aggressive isnt it? The trait whereby when you've lost an argument you try to undermine your opponent by focusing on what you know irritates them most. What irritates most bears, especially priced out ftbs, is that they missed the boat. If you didnt buy 5 yrs ago you missed the boat - a fact that rightly or wrongly upsets a lot bears. You've missed the boat and been economically shafted through no fault of your own. It feels awful, and current winners of the property pyramid rub it in your face.

However, none of that changes the facts about todays property market mess.

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Guest Charlie The Tramp

RBA?

:o The Reserve Bank of Australia, quite worrying it was.

FURTHER rises in oil prices, the collapse of a major bank or an unexpected jump in inflation could be all it takes to send the increasingly fragile global financial system into meltdown.

The Reserve Bank of Australia warned yesterday that the current calm in financial markets could be the prelude to a storm that could wreak havoc in the world economy.

The RBA believes the boom in markets for shares, bonds and housing in many countries is unsustainable.

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The central bank has issued a stern warning that

deterioration in local economic conditions

- Possibly triggered by rising petrol prices - could result in households defaulting on debt and a sharp fall in house prices.

The Reserve Bank of Australia today used strong language to describe the risks facing homeowners.

Almost half of the overview to its biannual Financial Stability Review statement described the risks that debt-laden households faced.

The central bank said households were borrowing at record levels, which had raised the potential for a sharp fall in asset prices.

"Given that leverage (debt) in markets has built up significantly and many assets appear fully priced, the pre-conditions are in place for quite abrupt swings in sentiment and a disruptive snap-back in pricing," the RBA said.

Edited by Ritters

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It's called passive aggressive isnt it? The trait whereby when you've lost an argument you try to undermine your opponent by focusing on what you know irritates them most. What irritates most bears, especially priced out ftbs, is that they missed the boat. If you didnt buy 5 yrs ago you missed the boat - a fact that rightly or wrongly upsets a lot bears. You've missed the boat and been economically shafted through no fault of your own. It feels awful, and current winners of the property pyramid rub it in your face.

However, none of that changes the facts about todays property market mess.

Actually I feel it's the other way around. Priced out people tend to force those with homes to constantly defend their good position.

Or maybe I've been hanging around here too long.

Edited by Time to raise the rents.

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It's called passive aggressive isnt it? The trait whereby when you've lost an argument you try to undermine your opponent by focusing on what you know irritates them most.

I find this site so much more enjoyable since I added TTRTR to my ignored users list. :D

I'm not too fussed about the Capital Economics change as all they are doing is saying that instead of short sharp drop there will be a slower longer one; in any event anybody who thinks they can accurately predict the exact path of the market is a fool. All that can be said is that property is ludicrously overvalued and CE have stuck by that.

Edited by Young Goat

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:o The Reserve Bank of Australia, quite worrying it was.

You are welcome to provide a link. But I suspect it may show that I have been right since joining this forum in saying that the UK isn't due a crash, but that Australia is/was.

I find this site so much more enjoyable since I added TTRTR to my ignored users list. :D

I'm not too fussed about the Capital Economics change as all they are doing is saying that instead of short sharp drop there will be a slower longer one; in any event anybody who thinks they can accurately predict the exact path of the market is a fool. All that can be said is that property is ludicrously overvalued and CA have stuck by that.

Funny, now the bears say anyone predicting a crash is a fool. A prediction of a crash after all is an EXACT prediction of the path of the market.

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Guest Charlie The Tramp

You are welcome to provide a link. But I suspect it may show that I have been right since joining this forum in saying that the UK isn't due a crash, but that Australia is/was.

I have edited my post above. The article has now been archived but I will PM you the full version.

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Actually I feel it's the other way around. Priced out people tend to force those with homes to constantly defend their good position.

Or maybe I've been hanging around here to long.

Price out people are rightly upset. The market has punished them badly, and handed property owners outlandish gains. Imagine if some people, but not all, had to pay 100% more for food than 5yrs ago?

TTRTR, I think you know whats going on with property prices...

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LONDON (AFX) - One of the leading pessimists on the UK's housing market has conceded that its prediction of an overall 20 pct collapse in prices is not going to materialise and is now forecasting a 5 pct decline over the next two years.

Hrm, prices are already down more than 5% round here since the summer.

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This doesn't look good as Capital Economics, a bear who have previously repeated a 20% drop are now changing to only a 5% drop over 2yrs, makes them look stupid :unsure:

This is just VIs trying to underpin a market rapidly going into freefall.

Just more sour grapes from the bears, doing ostrich impressions

I'm not too fussed about the Capital Economics change as all they are doing is saying that instead of short sharp drop there will be a slower longer one; in any event anybody who thinks they can accurately predict the exact path of the market is a fool. All that can be said is that property is ludicrously overvalued and CE have stuck by that.

Well actually they haven't stuck by that have they - they've said it is about 5% overpriced and this they expect will get eroded over two years.

So let's say a 2.5% fall each year - its hardly a crash is it.

Could this be called a soft landing !!??? Damn right it is.

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I have edited my post above. The article has now been archived but I will PM you the full version.

Yes I did read that at the time. There is a fairly recent tendency in Australia to borrow as much as possible to invest in shares amoung other things. I believe they're at least focusing mainly on that as a source of a future problem.

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Well actually they haven't stuck by that have they - they've said it is about 5% overpriced and this they expect will get eroded over two years.

So let's say a 2.5% fall each year - its hardly a crash is it.

Could this be called a soft landing !!??? Damn right it is.

So it's fait accompli, thank god for that.

Maybe you could also give us the lottery results for the next couple of years.

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Price out people are rightly upset. The market has punished them badly, and handed property owners outlandish gains. Imagine if some people, but not all, had to pay 100% more for food than 5yrs ago?

TTRTR, I think you know whats going on with property prices...

Yes I do know what's going to happen to prices. I am in the process of buying right now & should be exchanging in mid January.

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Well actually they haven't stuck by that have they - they've said it is about 5% overpriced and this they expect will get eroded over two years.

"Fundamentally overvalued" is the term they used, that does not mean 5%, just that it will take more than two years to correct.

BTW a 5% drop in nominal terms is a 10% drop in real terms. So that's £15-20,000 off the value of an average house over the next two years.

Edited by Young Goat

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So let's say a 2.5% fall each year - its hardly a crash is it.

Could this be called a soft landing !!??? Damn right it is.

Ah yeah down the the "slope of hope" we go....

theres far superior returns to be had in nat gas, short-term bonds, gold, commodities etc..... have been for months now....

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  • 302 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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