Hpc Averted Say Oecd

[EmpiricalBear]

Looks like the OECD has a new model, and has joined the capitulators...

http://www.telegraph.co.uk/money/main.jhtm.../ixcitytop.html

Sorry folks. No HPC in the UK

[Warwickshire Lad]

Rip-off Britain continues, then.

[Jason]

Using complex economic tools, the Paris-based OECD discovered that the probability of house prices "peaking", or slumping, is currently only 4.6pc. If the Monetary Policy Committee raised borrowing rates to 5.5pc, the probability would rise to 8.9pc, and if rates were hiked to 6.5pc, the chances of a crash would rise to 13.2pc.

So if rates got to 6.5%, there is only a 13.2% chance of a crash? This is getting ridiculous! How many people are living close to the edge at 4.5% rates???

Or maybe this is conditioning for higher rates?

[Golden Shower]

So if rates got to 6.5%, there is only a 13.2% chance of a crash? This is getting ridiculous! How many people are living close to the edge at 4.5% rates???

Or maybe this is conditioning for higher rates?

Probably depends on how many people have fixed their mortgage at 4.5%

[othello]

Not sure about what it means. The figures are 'based on a 1% rise in interest rates' and another year's steady growth in house prices. Assuming it's referring to the year from now does that mean that further price falls (as we have already seen) means a different outcome - perhaps a 99% probability of HPC?! I'd like to see the full report.

[FollowTheBear]

"using complex economic tools"

hmm, therein lies the problem. There is really only one variable in all this - "sentiment".

[simon99]

I don't know how on earth they arrived at this conclusion, it puts several other countries such as france, spain and portugal at a vastly greater risk of a crash. Surely we have the most ludicrously overpriced housing of them all?

[E Powell]

The BS gets better day by day. What next Gordon Bling will deny the statement

"I will not allow house prices to get out of control and put at risk the sustainability of the future."

[Justice]

When the powers at be tell you all not to be afraid, be very afraid.

It’s people that decide the way house prices go and they can not continue to run on empty or keep topping up with debt so it’s a dead cert what will happen sooner or later.

[Golden Shower]

Could this be why they are not so bearish?

CBI Optimistic

A strengthening economy and relatively tame inflation.

Edit: Kind of sounds as a plea not to raise rates now that I've re-read it.

Edited June 19, 2006 by Golden Shower

[jonathan trees]

Oh no, Dr Bubb, back to looking at Building Stocks to see which way house prices are heading. More cobblers from you.

[cynic]

I don't know how on earth they arrived at this conclusion, it puts several other countries such as france, spain and portugal at a vastly greater risk of a crash. Surely we have the most ludicrously overpriced housing of them all?

No question about it. Possibly the tourist hot spots - or more particularly the newer hot-spots that have been ramping themselves up through our own boom phase - will be vulnerable concurrently with the UK but that still leaves 95% of the country where you can by a decent 3 bed house for a fraction of the daft prices here. Not only that, I'm assured by one french agent whose word is reliable (there, that's novel isn't it?) that the French mortgage scene is rigourously controlled to loans 3.5 times earnings after all other loans are stripped out.

(sorry - as became apparent later in my post, it was specifically about France)

Edited June 19, 2006 by cynic

[kingofnowhere]

FWIW, I agree about NZ, it has a HPER of 8, and mortgage rates of about 9% IIRC

[Realistbear]

Yeah-right.

Mostly red ink according to the recently released Q figures from the Land Registry:

http://news.bbc.co.uk/1/shared/spl/hi/in_d...tml/region1.stm

Northumberland £149,225 -8.8%

Cumbria £143,851 -1.6%

Tyne And Wear £132,526 -0.3%

Stockton-On-Tees £128,643 -5.0%

Darlington £125,556 -5.6%

Durham £114,329 -4.3%

Redcar And Cleveland £109,289 -11.2%

Middlesbrough £108,982 4.7%

Hartlepool £98,770 -5.2%

East Riding Of Yorkshire £154,431 -4.5%

West Yorkshire £138,242 -1.1%

South Yorkshire £126,326 -1.4%

North Lincolnshire £122,869 -2.7%

North East Lincolnshire £102,179 -1.9%

Rutland £228,672 -7.7%

Leicestershire £170,145 -3.5%

Northamptonshire £158,537 -3.5%

Lincolnshire £147,659 -1.9%

Derbyshire £147,537 -3.5%

Nottinghamshire £146,871 -2.0%

City Of Derby £137,082 -0.3%

Leicester £134,130 0.3%

City Of Nottingham £119,797 -5.2%

Worcestershire £184,936 -3.3%

Warwickshire £184,860 -3.4%

Shropshire £184,664 -3.1%

Staffordshire £161,232 -0.1%

West Midlands £146,903 0.3%

Wrekin £140,819 1.2%

Stoke-On-Trent £89,910 -5.6%

Cheshire £185,036 -1.6%

Warrington £156,929 -4.5%

Greater Manchester £134,935 -2.1%

Merseyside £132,854 0.3%

Lancashire £128,806 -1.9%

Halton £127,289 -5.3%

Blackpool £119,112 2.8%

Blackburn With Darwen £98,762 -2.1%

Moray 101,031 -6.1%

Clackmannanshire 100,282 -6.8%

North Ayrshire 98,127 -1.9%

North Lanarkshire 96,363 1.7%

East Ayrshire 92,883 -10.3%

Orkney Islands 88,463 -10.3%

West Dunbartonshire 88,299 -7.4%

Shetland Islands 83,663 4.4%

Eilean Siar 75,640 -8.2%

Edinburgh, City Of 176,526 1.1%

East Renfrewshire 168,132 -8.8%

East Dunbartonshire 160,331 -8.6%

East Lothian 152,826 -7.5%

Stirling 144,367 -4.0%

Midlothian 134,238 -0.5%

Scottish Borders 130,622 -7.9%

Aberdeenshire 127,195 -3.4%

Highland 125,711 -3.4%

Glasgow City 124,370 -0.6%

Argyll And Bute 119,923 -5.9%

Isle Of Anglesey £145,033 -12.2%

Newport £144,790 -5.0%

Flintshire £142,754 -4.8%

Denbighshire £140,981 -1.9%

Swansea £139,153 -1.1%

Carmarthenshire £137,252 0.1%

Bridgend £133,572 -1.7%

Torfaen £120,546 -0.4%

Caerphilly £115,784 -1.5%

Neath Port Talbot £102,936 -2.6%

Rhondda Cynon Taff £93,453 -2.7%

Merthyr Tydfil £89,920 -4.8%

Blaenau Gwent £82,491 -7.4

Dorset £226,010 -0.5%

Devon £212,600 -0.3%

Wiltshire £209,024 -3.5%

Cornwall £203,006 -2.5%

Bournemouth £202,293 2.2%

Gloucestershire £201,799 -0.5%

North Somerset £185,780 -4.6%

Somerset £183,850 -1.5%

South Gloucestershire £182,959 -2.5%

City Of Bristol £178,116 0.6% -0.9%

Torbay £174,208 -2.0%

Swindon £155,868 -2.3%

Brighton And Hove £222,241 0.6%

West Sussex £221,415 -2.2%

Essex £212,460 -0.9%

Kent £206,628 -0.4%

East Sussex £198,541 -3.0%

Reading £196,094 -2.0%

Isle Of Wight £181,138 -0.6%

Milton Keynes £175,337 -0.6%

Thurrock £169,523 -0.6% -1.5%

Southampton £161,716 -1.3%

Portsmouth £154,803 0.6%

Medway £154,231 -2.1%

I would say that the actual sale prices of houses show a definite trend and it isn't up. In fact the huge amount of red ink shows that we are now in the early stages of a full-on HPC. No complicated models just house price falls.

Edited June 19, 2006 by Realistbear

[spline]

Yeah-right.

Mostly red ink according to the recently released Q figures from the Land Registry:

...

I would say that the actual sale prices of houses show a definite trend and it isn't up. In fact the huge amount of red ink shows that we are now in the early stages of a full-on HPC. No complicated models just house price falls.

Well, we should know that the LR figures are old and lag a bit, and that the ones on the BBC website relate to the dip at the turn of the year.

Worth taking a look at the very accurate FT HPI-MA index based on LR/projected figures to see what’s been going on this summer – Rightmove appears to be leading the way (if a little too enthusiastically ) and the FT HPI-MA and all the others are following in its footsteps.

Edited June 19, 2006 by spline

[kingofnowhere]

Full report here

http://www.olis.oecd.org/olis/2006doc.nsf/.../JT03209987.PDF

[Jason]

Full report here

http://www.olis.oecd.org/olis/2006doc.nsf/.../JT03209987.PDF

So what's their main reason for such a small chance of a crash? I don't have time to read it, I have to work so I can afford an over priced pile of bricks.

[othello]

To put the French market above the UK in terms of probability of a crash is absurd. Prices in france have risen steadily but they have seen none of the hyperinflastion of countries like the UK and Ireland. I would dearly like to understand the assumptions used in the model. Anyone know where we can get more detail?

[geneer]

Oh no, Dr Bubb, back to looking at Building Stocks to see which way house prices are heading. More cobblers from you.

Oh really Tree's. Apparently you feel that stocks are unrelated to profit, and profits are unrelated to mark-ups and sales.

Go back to school.

[ronnie]

i cant beleive the probability of a crash in ireland is only 34% but i suppose its bettet than 5% in uk!!

Denmark seems to be a dead cert to burst and the sentiment could ripple around europe.

Spain has actually risen more than uk relative to incomes which are much lower in spain.

OECD are twits anyway,they look at it entirely on past stats etc and their models have zero allowance for sentiment as pointed out earlier.busts by their nature are difficult if impossible to time/predict in short term so i cant see much validity in their probabilities

Edited June 19, 2006 by ronnie

[paranoidmick]

How do so called experts get away with writing this interlectually devoid and economically ridiculous tripe?

This is all complete nonsense.

By picking France as a place with a greater chance of crash than the uk, it just is totally and utterly absurd. I bought a large home central France in a half an acre, in coutryside but close to amenities for less than £120,000. It would not be deemed a FTB property in France but FTBs cant buy a studio flat near to where i currently rent in the UK.

How, in a country that rigourously checks income, (No buy to Lie there) to check that disposable income, not earnings, is sufficient to service the mortgage, can there be a risk of a HPC no mind a greater risk than the UK where lending has been orresponsible at best and criminal at worst.

The UK market is in free fall and the VIs do not want the sheeple to know.

The anecdotal back up is there and anyone considering this twaddle as factual and reliable, open your eyes........

There are now 4 houses for sale within 250 meters of my rental place. Three are brand new and have been ready for sale for almost a year, one has been up for 7 months. Tell the developer and the private owner that prices are going up and they would laugh in your face.

[Firangi]

Tell the developer and the private owner that prices are going up and they would laugh in your face.

So true, sellers who have their houses hanging on the emarket for more than a year are just wondering which part of the island prices are going up. All I am witnessing for last one and half months is that either houses are not selling or SSTCs coming back to the market.

[Guest boredwaiting]

i cant beleive the probability of a crash in ireland is only 34% but i suppose its bettet than 5% in uk!!

Denmark seems to be a dead cert to burst and the sentiment could ripple around europe.

Spain has actually risen more than uk relative to incomes which are much lower in spain.

OECD are twits anyway,they look at it entirely on past stats etc and their models have zero allowance for sentiment as pointed out earlier.busts by their nature are difficult if impossible to time/predict in short term so i cant see much validity in their probabilities

I live here in denmark and I have to say most people here don't know what a crash is... They haven't experienced one in a long time.

They just think it's a shame so many people will have to struggle to get a house....

[Xurbia]

The research, from the Organisation for Economic Co-operation and Development, shows how the recent "soft landing" engineered by the Bank of England has dramatically reduced the danger of a potential crash.

What 'engineering' are they referring to? I thought that the BoE were meant to deal with inflation; obviously not. IMO, engineering would suggest they've done something other than just using the blunt instrument of interest rates.

I haven't read a single report in the past 6 years that has accurately predicted the economic future and there lies the problem. We have had shocks to the system like 9-11 and the dotcom bust. To provide statistical guesswork seems like a waste of money.

It's equally fruitful conjecture for us to suggest that using my simplified patented BS-monitor MkII there is 50/50 chance of America leading the world into recession.

If there is so little chance of a crash why are the BoE bricking their pants and not raising rates?

[Casual Observer]

Yeah-right.

Mostly red ink according to the recently released Q figures from the Land Registry:

http://news.bbc.co.uk/1/shared/spl/hi/in_d...tml/region1.stm

Northumberland £149,225 -8.8%

Cumbria £143,851 -1.6%

Tyne And Wear £132,526 -0.3%

Stockton-On-Tees £128,643 -5.0%

Darlington £125,556 -5.6%

Durham £114,329 -4.3%

Redcar And Cleveland £109,289 -11.2%

Middlesbrough £108,982 4.7%

Hartlepool £98,770 -5.2%

East Riding Of Yorkshire £154,431 -4.5%

West Yorkshire £138,242 -1.1%

South Yorkshire £126,326 -1.4%

North Lincolnshire £122,869 -2.7%

North East Lincolnshire £102,179 -1.9%

Rutland £228,672 -7.7%

Leicestershire £170,145 -3.5%

Northamptonshire £158,537 -3.5%

Lincolnshire £147,659 -1.9%

Derbyshire £147,537 -3.5%

Nottinghamshire £146,871 -2.0%

City Of Derby £137,082 -0.3%

Leicester £134,130 0.3%

City Of Nottingham £119,797 -5.2%

Worcestershire £184,936 -3.3%

Warwickshire £184,860 -3.4%

Shropshire £184,664 -3.1%

Staffordshire £161,232 -0.1%

West Midlands £146,903 0.3%

Wrekin £140,819 1.2%

Stoke-On-Trent £89,910 -5.6%

Cheshire £185,036 -1.6%

Warrington £156,929 -4.5%

Greater Manchester £134,935 -2.1%

Merseyside £132,854 0.3%

Lancashire £128,806 -1.9%

Halton £127,289 -5.3%

Blackpool £119,112 2.8%

Blackburn With Darwen £98,762 -2.1%

Moray 101,031 -6.1%

Clackmannanshire 100,282 -6.8%

North Ayrshire 98,127 -1.9%

North Lanarkshire 96,363 1.7%

East Ayrshire 92,883 -10.3%

Orkney Islands 88,463 -10.3%

West Dunbartonshire 88,299 -7.4%

Shetland Islands 83,663 4.4%

Eilean Siar 75,640 -8.2%

Edinburgh, City Of 176,526 1.1%

East Renfrewshire 168,132 -8.8%

East Dunbartonshire 160,331 -8.6%

East Lothian 152,826 -7.5%

Stirling 144,367 -4.0%

Midlothian 134,238 -0.5%

Scottish Borders 130,622 -7.9%

Aberdeenshire 127,195 -3.4%

Highland 125,711 -3.4%

Glasgow City 124,370 -0.6%

Argyll And Bute 119,923 -5.9%

Isle Of Anglesey £145,033 -12.2%

Newport £144,790 -5.0%

Flintshire £142,754 -4.8%

Denbighshire £140,981 -1.9%

Swansea £139,153 -1.1%

Carmarthenshire £137,252 0.1%

Bridgend £133,572 -1.7%

Torfaen £120,546 -0.4%

Caerphilly £115,784 -1.5%

Neath Port Talbot £102,936 -2.6%

Rhondda Cynon Taff £93,453 -2.7%

Merthyr Tydfil £89,920 -4.8%

Blaenau Gwent £82,491 -7.4

Dorset £226,010 -0.5%

Devon £212,600 -0.3%

Wiltshire £209,024 -3.5%

Cornwall £203,006 -2.5%

Bournemouth £202,293 2.2%

Gloucestershire £201,799 -0.5%

North Somerset £185,780 -4.6%

Somerset £183,850 -1.5%

South Gloucestershire £182,959 -2.5%

City Of Bristol £178,116 0.6% -0.9%

Torbay £174,208 -2.0%

Swindon £155,868 -2.3%

Brighton And Hove £222,241 0.6%

West Sussex £221,415 -2.2%

Essex £212,460 -0.9%

Kent £206,628 -0.4%

East Sussex £198,541 -3.0%

Reading £196,094 -2.0%

Isle Of Wight £181,138 -0.6%

Milton Keynes £175,337 -0.6%

Thurrock £169,523 -0.6% -1.5%

Southampton £161,716 -1.3%

Portsmouth £154,803 0.6%

Medway £154,231 -2.1%

I would say that the actual sale prices of houses show a definite trend and it isn't up. In fact the huge amount of red ink shows that we are now in the early stages of a full-on HPC. No complicated models just house price falls.

Do you honestly believe that these quarterly figures indicate that prices are crashing? Despite all the evidence to the contrary?