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House Price Predictor - Update

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Here's the latest update on the HPI predictor. I thought I'd wait until the Feb HBOS figures were in.

The graph below predicts yoy HPI over the next 6 months and is based on three factors:

1. Housing stock turnover - housing approvals / housing stock. This is a well known predictor of house prices 6-months' hence. It's not perfect though. The next two factors improve the accuracy of the prediction.

2. Current affordability - house price / earnings

3. House price growth over the last couple of years

Factors 1 and 3 increase HPI. Factor 2 decreases it. By fiddling around with multiples of each factor, the best fit to current data can be achieved, and this is then used to predict HPI for the next six months.

Anyway, here it is:


Note that it's all inflation-adjusted, so it showing yoy -ve already.

The prediction for the last couple of months has been pretty much spot on. Time will tell if it stays that way. The next few months look interesting. In fact, it would only take nominal monthly falls of -0.6% or so to see this drop happen.

[Edit - typo]


Edited by quantinghome

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They all seem to be pointing down these days. I wonder what type of graph Krusty and Phil are looking at ?

one of them seismo ones I should think

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  • 297 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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