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Realistbear

London Flats Seeing Drops Of 4.4% + As Discounts Are Given

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http://www.themovechannel.com/News/2006/March/10a.asp

On the one hand:

Estate agents across the city have witnessed a surge in demand this month, as buyers come back to the market with a vengeance.
The increase in demand has occurred as a direct result of growing confidence in the London market and city bonuses finding their way into bricks and mortar. This combined with a decrease in the number of properties for sale of approximately 7% has led to the average price of a property creeping up steadily since the start of the year.

On the other:

Properties have also been selling more quickly, and
discounts on asking price have
decreased
to an average of 4.4%,
down from a high of 5.2% in November 2005.

If sellers are having to discount their prices by 4.4% it would seem to indicate a drop in asking prices rather than an increase?

Perhaps the DT got it right:

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

The souring of the inner-city dream has left a glut of empty, new-build apartments, affordable to few and situated in communities bereft of families. What now for the super-cool, urban living space that stands empty? Caroline McGhie reports on a post-Sipps nightmare
Buy-to-lets may be having a hard time already - Knight Frank has 60 to let in Docklands, priced at £595 to £695 per week. Last March, the largest site in the Thames Gateway area, 59 acres at Silvertown Quays, was launched to provide nearly 5,000 residential units, most of which are flats (and the biggest aquarium in Europe).

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http://www.themovechannel.com/News/2006/March/10a.asp

On the one hand:

Estate agents across the city have witnessed a surge in demand this month, as buyers come back to the market with a vengeance.
The increase in demand has occurred as a direct result of growing confidence in the London market and city bonuses finding their way into bricks and mortar. This combined with a decrease in the number of properties for sale of approximately 7% has led to the average price of a property creeping up steadily since the start of the year.

On the other:

Properties have also been selling more quickly, and
discounts on asking price have
decreased
to an average of 4.4%,
down from a high of 5.2% in November 2005.

If sellers are having to discount their prices by 4.4% it would seem to indicate a drop in asking prices rather than an increase?

Perhaps the DT got it right:

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

The souring of the inner-city dream has left a glut of empty, new-build apartments, affordable to few and situated in communities bereft of families. What now for the super-cool, urban living space that stands empty? Caroline McGhie reports on a post-Sipps nightmare
Buy-to-lets may be having a hard time already - Knight Frank has 60 to let in Docklands, priced at £595 to £695 per week. Last March, the largest site in the Thames Gateway area, 59 acres at Silvertown Quays, was launched to provide nearly 5,000 residential units, most of which are flats (and the biggest aquarium in Europe).

No, I think this means discounts _from_ asking prices.

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No, I think this means discounts _from_ asking prices.

And isn't it "asking prices" that are used by the VIs when they spin their monthly statistics? Shows that the Rightmove/Halifax data could be off by as much as 4.4% with regard to flats at least? A percentage this high would show up as a loss MoM?

Shows how utterly useless the VI data is.

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And isn't it "asking prices" that are used by the VIs when they spin their monthly statistics? Shows that the Rightmove/Halifax data could be off by as much as 4.4% with regard to flats at least? A percentage this high would show up as a loss MoM?

Shows how utterly useless the VI data is.

Halifax and Nationwide are on the value assigned to the property by the surveyor. Not the asking price. Rightmove is the only index that monitors asking prices.

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Halifax and Nationwide are on the value assigned to the property by the surveyor. Not the asking price. Rightmove is the only index that monitors asking prices.

When do we see the corresponding data based on actual sale prices?

Billy Shears

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When do we see the corresponding data based on actual sale prices?

Billy Shears

Here is the timeline.

houseBOEtimeline.gif

As you can see Approvals (haliwide) are about 4 to 14 weeks behind rightmove. And Actual sales prices (Land reg) are about 12 weeks behind Haliwide. (and of course LR only reports quarterly so it delays it even further.

I hope that helps

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Guest Fiddlesticks

When do we see the corresponding data based on actual sale prices?

Billy Shears

When the Land Registry report comes out.

Praise God for that lag of a few months! It allows us constantly to accuse the "VI"s of blatant manipulation which will only be exposed for the outrage it is when the LR figures appear. By the time the LR figures do appear and confirm what Haliwide were saying all along we have conveniently moved on to something else ;)

Edited to thank KoN for that table, very useful.

Edited by Fiddlesticks

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Properties have also been selling more quickly, and discounts on asking price have decreased to an average of 4.4%, down from a high of 5.2% in November 2005. [/indent]

If sellers are having to discount their prices by 4.4% it would seem to indicate a drop in asking prices rather than an increase?

Selling prices are always under asking prices to some degree. This reduction in discount indicates that vendors are not having to accept offers as far under their asking price as previously. Therefore it indicates a rise in selling prices (unless asking prices have fallen by about 1% or more in the same period, which I don't believe they have in London).

So you're taking this stat as meaning almost exactly the opposite of what it actually means. Even VIs tend to just twist things a bit rather than completely reversing their actual meaning.

Edited by Magpie

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Selling prices are always under asking prices to some degree. This reduction in discount indicates that vendors are not having to accept offers as far under their asking price as previously. Therefore it indicates a rise in selling prices (unless asking prices have fallen by about 1% or more in the same period, which I don't believe they have in London).

So you're taking this stat as meaning almost exactly the opposite of what it actually means. Even VIs tend to just twist things a bit rather than completely reversing their actual meaning.

I hate to say it, but there's no-one spins things as much as some of the Bears on this site!

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I hate to say it, but there's no-one spins things as much as some of the Bears on this site!

Yes, I especially liked Realistbears recent "Repossession Likely If You Bought Late In The Boom" titled thread, when in actual fact the article read "more likely" which then went on to say 7% of people in 1989 or sth.

I apparently have commited financial suicide because I bought in 2005 according to Realist there. :blink: Although interest rates will have to go well over 10% with me losing my job aswell for that to happen.

Spinbear is what he should be called. No offence Realist but I suppose VI depends on what you are looking for and what you want to happen with houseprices. :)

Like I have said before, I dont mind if there is no HPI, I didnt buy my house to make any money. I bought it to be my home and don't want to rent.

Mike

Edited by stormy

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I hate to say it, but there's no-one spins things as much as some of the Bears on this site!

The confusion seems to stem from the fact that asking prices are still being discounted and the lower prices do not appear to have been factored into Rightmove's "asking price" data. When they reported a huge jump in prices last month it must mean that people were getting asking prices or above, not discounted prices of 4.4%.

If properties were "flying off the shelves" as Rightmove claim you would think that discounts would be absent. But then again, its all VI spin I suppose.

One thing I do see lately is a massive and concerted effort among VIs to try to suggest that the market is taking off again and that the crash or slump was last year. This is odd because most of them do not admit prices fell at all in 2005. I believe Hometrack were the only ones who said prices fell YoY.

We shall all have to wait and see the LR data when it comes out as this is the only reliable guide as it reflects prices at which houses sold. The only problem with this data is that it may be skewed one way or the other if a certain price range of house sold more during that particular reporting period. So even the LR can spin data, albeit unintentionally. Not much that can't be spun other than mathematical truths (2 + 2 = 4 etc).

Yes, I especially liked Realistbears recent "Repossession Likely If You Bought Late In The Boom" titled thread, when in actual fact the article read "more likely" which then went on to say 7% of people in 1989 or sth.

I apparently have commited financial suicide because I bought in 2005 according to Realist there. :blink: Although interest rates will have to go well over 10% with me losing my job aswell for that to happen.

Spinbear is what he should be called. No offence Realist but I suppose VI depends on what you are looking for and what you want to happen with houseprices. :)

Like I have said before, I dont mind if there is no HPI, I didnt buy my house to make any money. I bought it to be my home and don't want to rent.

Mike

Are you saying you bought a house in 2005--at the top of the market? The repossession thread was especially frightening for anyone who has bought post-2003 and whether it is likely or even more likely to occur misses the point as the writer was trying to send out a warning that those who bought late in the cycle are going to lose (a lot of) money. For those who buy a house to live in and are not concerned about the price they pay it does not matter as you said. For most, its bettter to wait for the cycle to run its course and to buy for less later on.

Edited by Realistbear

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The confusion seems to stem from the fact that asking prices are still being discounted and the lower prices do not appear to have been factored into Rightmove's "asking price" data. When they reported a huge jump in prices last month it must mean that people were getting asking prices or above, not discounted prices of 4.4%.

But the selling price is less reduced (4.4%) than last time (5.2%). So if the asking price hasn't fallen, it follows that the selling price has risen.

This is not good news for Bears, it's bad news.

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Are you saying you bought a house in 2005--at the top of the market?

Yup, well if it indeed turns out that way. I don't of course want a crash, but I am still not convinced we are there yet anyway. This site is scary for me, its like a drug I can't give up seeing all the bears shouting for blood. :)

If there is a big crash, thats my luck to a T. ;)

Still time will tell..... :rolleyes:

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Guest Winners and Losers

Yup, well if it indeed turns out that way. I don't of course want a crash, but I am still not convinced we are there yet anyway. This site is scary for me, its like a drug I can't give up seeing all the bears shouting for blood. :)

If there is a big crash, thats my luck to a T. ;)

Still time will tell..... :rolleyes:

Why don't you, Casual Observer, WAP and TTRTR start a housepriceboom site - so that we can do the same? ;):rolleyes:

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Guest Winners and Losers

You can start one without waiting for us.

Sorry, I'm a bear. I just wouldnt know where to begin. You, on the other hand, seem to have plenty to say.......Whaddya waiting for?

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But the selling price is less reduced (4.4%) than last time (5.2%). So if the asking price hasn't fallen, it follows that the selling price has risen.

This is not good news for Bears, it's bad news.

It must be good news for bears if asking prices are being discounted. Bad news for bears if people are getting more than asking price. In a bull market discounts do not exist--only in bear markets.

The discount rate has decreased which is a form of good news for bulls but it still leaves us with lower prices which Rightmove seems to have factored out as they do not report discounted prices--only asking prices.

Roll on LR data!

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Sorry, I'm a bear. I just wouldnt know where to begin. You, on the other hand, seem to have plenty to say.......Whaddya waiting for?

So am I a Bear, but unlike you I don't dogmatically accept every bit of spin that other Bears put on bad news

It must be good news for bears if asking prices are being discounted.

Not if buyers can't knock asking prices down by as much as they did last month it's not. It means selling prices are going up.

Edited by Casual Observer

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It must be good news for bears if asking prices are being discounted. Bad news for bears if people are getting more than asking price. In a bull market discounts do not exist--only in bear markets.

The discount rate has decreased which is a form of good news for bulls but it still leaves us with lower prices which Rightmove seems to have factored out as they do not report discounted prices--only asking prices.

Roll on LR data!

Sorry but that's still utter nonsense. Average selling prices are always discounted from asking prices to some degree, even in a bull market. (Vendors ask the most they imagine they could get and then haggle down even then - a very small proportion of properties might go over the asking price after a bidding war but bull markets certainly do not imply that selling prices are higher than asking prices). Asking prices have consistently been higher than selling prices throughout the recent boom - the only thing that is interesting about that is how big a discount buyers are getting from the asking price - that gives some idea of the confidence of buyers and vendors respectively. (And in London we do seem to be seeing a small rise in buying activity, even if that makes us out of sync with the rest of the country - this particular report is about London and the discounts I have seen reported elsewhere seem to be increasing rather than falling).

Rightmove only ever report asking prices so the fact that they ignore the discount is completely irrelevant to this point. It does make their figures unreliable in working out real prices but so what? They haven't suddenly started ignoring discounts - it's built into their method.

I'm not a bull but it really irritates me when I see such illogical nonsense touted here as proof that the market is falling. Personally I think it undermines the bear argument if you put forward arguments that don't hold water.

(And while I'm at it - I often see the argument here that "this house was on the market for £200K but it sold for £180K, therefore prices have fallen 10%... This is the same mistake of thinking that discounts are equivalent to falling prices. The level of discount is not related to the price level in any simple way. If everyone put their asking prices up by 20% and then discounted by 10% you would still end up with an 8% increase in selling price - that's not what's happening now of course, but it is an example of how irrelevant the discount is if it is taken in isolation. Bigger discounts are likely in a falling market as people scramble to get out, but you need to look at all the factors, not just the discount)

Edited by Magpie

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I hate to say it, but there's no-one spins things as much as some of the Bears on this site!

I've mentioned this before - Realistbear's absurd spinning of every news item is an unfortunate development of late. This particular example is definitely the worst though - he's just plain wrong in his interpretation of this information.

This hyperbole is not doing the bears cause any good. Anyone would think he was a bull planted to discredit the bear view. <_<

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I've mentioned this before - Realistbear's absurd spinning of every news item is an unfortunate development of late. This particular example is definitely the worst though - he's just plain wrong in his interpretation of this information.

This hyperbole is not doing the bears cause any good. Anyone would think he was a bull planted to discredit the bear view. <_<

Ultimately,

The Builders are ahead ANY of the Housing indices.

They are trying to put in a TOP now! See: http://www.HousePriceCycle.com

I have not read any of the above posts fully yet i am just posting this little snippet

In addition there is a 22% price discount offered on PropertySpy

land which exchanges before the 5th April 2006 at selected sites

Edited by Janette

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I've mentioned this before - Realistbear's absurd spinning of every news item is an unfortunate development of late. This particular example is definitely the worst though - he's just plain wrong in his interpretation of this information.

This hyperbole is not doing the bears cause any good. Anyone would think he was a bull planted to discredit the bear view. <_<

I'd have to agree with that, though I'd interpret his first post as a mistake due to over-enthusiasm. The house price crash/no house price crash question does not depend on every single turn in the market. It seems to me that certain people have become impatient concerning a correction in the property market and this causes a hair trigger response.

Billy Shears

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  • 336 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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