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crazypabs

Predictions From 'Experts' For House Prices In 2019

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Ive seen the first of the articles now in CITY AM. Here is a link and summary...

http://www.cityam.com/270685/2019-property-forecast-heres-experts-predicting-happen

  • JLL says they expect an initial slump at the beginning of next year, showing 1 per cent growth in the first six months, then picking up in the second half to make 1.5 per cent growth by the end of the year.
  • Strutt & Parker is even more optimistic, forecasting 2.5 per cent growth for 2019 and five year growth of 18 per cent
  • Savills is more cautious, sticking to 1.5 per cent in 2019, rising to 14.8 per cent in five years

Glad to see none of these so called experts have a vested interest in the house prices! (sarcasm)

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Invariably these predictions take whatever is happening in December and state that this will continue throughout the whole of the next year.

Therefore, expect lots of predictions re overall growth flat, but mixed picture of minor declines in London and South East which are offset by rises in the Midlands.

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43 minutes ago, crazypabs said:

Ive seen the first of the articles now in CITY AM. Here is a link and summary...

http://www.cityam.com/270685/2019-property-forecast-heres-experts-predicting-happen

  • JLL says they expect an initial slump at the beginning of next year, showing 1 per cent growth in the first six months, then picking up in the second half to make 1.5 per cent growth by the end of the year.
  • Strutt & Parker is even more optimistic, forecasting 2.5 per cent growth for 2019 and five year growth of 18 per cent
  • Savills is more cautious, sticking to 1.5 per cent in 2019, rising to 14.8 per cent in five years

Glad to see none of these so called experts have a vested interest in the house prices! (sarcasm)

I consider myself just as much an 'expert' as these people, so I am going to predict that the falls are going to accelerate nationally with the Midlands playing rapid catch-up in the second half of the year. Lets say -5% YoY by this time next year.

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Its more interesting to look back at the accuracy or otherwise of these predictions...seems few people actually bother to investigate the track record of these 'experts'...

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I've seen "experts" forecast commodity prices one year out with three significant figures of precision. (5.45% for example) The same experts repeatedly fail to forecast major moves of 50%. Nevertheless, the next year they come out with yet more predictions.

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58 minutes ago, rantnrave said:

Invariably these predictions take whatever is happening in December and state that this will continue throughout the whole of the next year.

Therefore, expect lots of predictions re overall growth flat, but mixed picture of minor declines in London and South East which are offset by rises in the Midlands.

I suspect they're using an econometrics model. The nascent future resembles the immediate past by default in every econometrics model based on linear regression...

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2 hours ago, crazypabs said:

Glad to see none of these so called experts have a vested interest in the house prices! (sarcasm)

EAs have an incentive in volumes, not prices.

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3 hours ago, crazypabs said:

Ive seen the first of the articles now in CITY AM. Here is a link and summary...

http://www.cityam.com/270685/2019-property-forecast-heres-experts-predicting-happen

  • JLL says they expect an initial slump at the beginning of next year, showing 1 per cent growth in the first six months, then picking up in the second half to make 1.5 per cent growth by the end of the year.
  • Strutt & Parker is even more optimistic, forecasting 2.5 per cent growth for 2019 and five year growth of 18 per cent
  • Savills is more cautious, sticking to 1.5 per cent in 2019, rising to 14.8 per cent in five years

Glad to see none of these so called experts have a vested interest in the house prices! (sarcasm)

I heard they have just asked 1000 turkeys how popular will Turkey Xmas dinners be in 5 years time, 100% of the predicted we would have moved totally over to Goose by then

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I suspect if we have a hard brexit (which seems likely) the pound will go down another 20% vs major currencies... making UK real estate cheap for foreign investors.

As long as foreign money keeps flowing into London / Manchester... that provides liquidity for people who are sellinng up and moving to cheaper parts of the country, keeping the entire ponzi "afloat" at least nominally. Of course if one priced UK housing in Dollars then the rises and falls would look very different to how we look at it in sterling.

In 2008 the £1 = $2

in 2019 I expect it to be £1 = $1.1

That alone is a 45% off the 2008 house prices. Nationwisde it shows that UK house prices are expensive, but not massively so for foreign speculators. 

this is not advice.

Edited by hayder

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if the £ falls, it doesn't mean it will stop falling.

A lot of foreigner got burned on RE in the UK, some may be learning. And if it was such an open bar, there would not be such a scale of reductions. 

To speculate it means that in your investment time frame you expect to get a return. If you can predict currency movement, apply to a bank, everyone gets burned at this game.

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21 minutes ago, hayder said:

I suspect if we have a hard brexit (which seems likely) the pound will go down another 20% vs major currencies... making UK real estate cheap for foreign investors.

As long as foreign money keeps flowing into London / Manchester... that provides liquidity for people who are sellinng up and moving to cheaper parts of the country, keeping the entire ponzi "afloat" at least nominally. Of course if one priced UK housing in Dollars then the rises and falls would look very different to how we look at it in sterling.

In 2008 the £1 = $2

in 2019 I expect it to be £1 = $1.1

That alone is a 45% off the 2008 house prices. Nationwisde it shows that UK house prices are expensive, but not massively so for foreign speculators. 

this is not advice.

I agree with this but it is yet another reason why we should be taxing overseas owners and companies a lot more than we tax UK citizens.  I can't imagine many of us would object to foreign owners being taxed at 10% of the properties value per annum.

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Just now, Freki said:

if the £ falls, it doesn't mean it will stop falling.

A lot of foreigner got burned on RE in the UK, some may be learning. And if it was such an open bar, there would not be such a scale of reductions. 

To speculate it means that in your investment time frame you expect to get a return. If you can predict currency movement, apply to a bank, everyone gets burned at this game.

I completely agree, added to which the blunt statement that 1 pound was 2 dollars is the sort of nonsense so called journalists peddle. It WAS around 2 dollars for abou a year and in the previous 5 years averaged 1.8 or so. Today it's 1.26.

https://finance.yahoo.com/chart/GBPUSD

Anyway these figures say more about USD than GBP.

In 2008 EURUSD was about 1.5, now 1.14.

If you can predict currency movement, apply to a bank, everyone gets burned at this game.

I bought a flat in 2008 in S. America priced in USD using EUR and got above 1.5 as I recall, may sell this year. I am not applying to a bank or going to start currency speculation.

 

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On ‎19‎/‎12‎/‎2018 at 10:02, Freezer? Best place for it said:

No, they have interest in both, although it is more a volume driven "business".

Are there a lot of buyers who can afford to buy, but choose not to, as they expect prices to fall? Would these buyers rush to buy again if prices started to rise rapidly? If yes, then you might have a point. If not (if there are so few buyers because they simply cannot afford, or if prices started to rise rapidly they would just despair rather than doing anything to get on the property ladder) then EAs will definitely do better out of price falls than price rises.

I think your point that they have an interest in both is right historically. For example, in many of the boom years there was probably an increase in volume alongside prices. The rising prices probably tempted a lot of buyers and sellers. But I don't think that's relevant at the moment.

It's also worth noting that a growing proportion of EA business is not affected by price at all, as there is a fixed fee instead of a percentage.

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Just now, Kosmin said:

Are there a lot of buyers who can afford to buy, but choose not to, as they expect prices to fall? Would these buyers rush to buy again if prices started to rise rapidly? If yes, then you might have a point. If not (if there are so few buyers because they simply cannot afford, or if prices started to rise rapidly they would just despair rather than doing anything to get on the property ladder) then EAs will definitely do better out of price falls than price rises.

I am one of them with a well in excess of 7-figure cash pot [but insufficient # of millions for the really good South/Southwest ones]. It's more expecting to get a better property [am looking for land-outbuildings-views-etc as well as just a house] than wanting to take a financial gain.

Answer is Yes .... but not in the UK. If UK prices start to rocket at 30% a year I will most likely abandon any search here and make an[other] move elsewhere. Given my age, probably my last move and likely will stay there but already have and will retain a london flat/pied a terre as well.

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1 hour ago, Kosmin said:

It's also worth noting that a growing proportion of EA business is not affected by price at all, as there is a fixed fee instead of a percentage.

Even in this model, EA’s want HPI - it panders to Vendors greed, and provides the opportunity for EA’s to “buy” Instructions.

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12 minutes ago, Freezer? Best place for it said:

Even in this model, EA’s want HPI - it panders to Vendors greed, and provides the opportunity for EA’s to “buy” Instructions.

Is that why record numbers of vendors are listing?!

It's an example of the Prisoner's dilemma. EAs as a group want lower prices (if they could collude to give lower valuations and write EA industry predictions of lower prices, they would), but each individual EA has an incentive to cheat and say prices will rise or won't fall.

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I have got my predictions drastically wrong and for a long time now, still feel no regrets though for not selling my life to Satan for the majority of my working life and for a s***hole. This year I am not going to predict anything and just resign the fact that I do not understand economics and herd mentality as much as I thought or just maybe I have learnt everything I need to know in  that last sentence

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  • 293 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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