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Skewed Calculation

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hi all,

just want some-one to confirm what I am thinking here.

average prices are going up because only more expensive houses are selling to people who either have too much money, or to people who have broken the bank. And the diviser is smaller because there are much fewer people buying.

surely as "average" house prices go even higher, and actual sales go lower then surely that is a big sign of a hpc as it will mean that most of the buying market has pulled out of the game and its only the "irrationally exhuberant" who are left?

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There was some evidence in the YoY price-transaction data released by the Land Registry at the end of last year that simple average prices (i.e. transaction weighted) had increased 2004-2005 because transaction volumes had fallen for typical FTB and BTL houses at the lower end the scale. Mix adjusted measures should correct for this, but some argue that a “flight to quality” within each mix-category would produce the same effect – possible, but difficult to say if actually true.

The most convincing sign is a collapse of volumes as this measure usually follows a saw-tooth pattern over a cyclea – a bit like a relaxation oscillator, collapses once the crisis point is passed.

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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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