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thirdwave

Merrill Lynch Forecasts A 20 Year Downturn In Uk Property..

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The pessimistic forecast came as one of the City’s leading banks warned that it could take 20 years for the British housing market to recover. In a note to clients Mark Hake, an analyst at Merrill Lynch said: "[Compared] with the 1990 correction... it looks significantly worse, with house prices falling faster and further and very little recovery in real terms expected over 20 years."

He added: "House prices are expected to be below their August 2007 peak in a further 10 years' time."

The investment bank expects prices to fall 17 per cent this year

http://www.telegraph.co.uk/money/main.jhtm.../nborrow708.xml

Link on bloomberg..

http://www.bloomberg.com/apps/news?pid=206...mp;refer=europe

Edited by thirdwave

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The pessimistic forecast came as one of the City’s leading banks warned that it could take 20 years for the British housing market to recover. In a note to clients Mark Hake, an analyst at Merrill Lynch said: "[Compared] with the 1990 correction... it looks significantly worse, with house prices falling faster and further and very little recovery in real terms expected over 20 years."

He added: "House prices are expected to be below their August 2007 peak in a further 10 years' time."

The investment bank expects prices to fall 17 per cent this year

http://www.telegraph.co.uk/money/main.jhtm.../nborrow708.xml

Wow - set phasers to BEAR. :unsure:

Regards,

Q

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I don't think anyone can make an economic forecast that far ahead, except about the obvious - like there will be less oil around than there is now.

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I don't think anyone can make an economic forecast that far ahead, except about the obvious - like there will be less oil around than there is now.

Not if you consider the fact that the UK economy in 2008 is exactly where the Japanese economy was in the late 80s..

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Bring on the recession of all recessions!!!

OK, I can understand why you might want a house price crash but why welcome a recession? Those on lower incomes will suffer the most, tax revenues will dip leading to lower spending on services such as the NHS, unemployment will spiral with the attendant misery that brings, pensions will be worth less etc etc. So I ask again, what sort of moron wants a recession?

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"very little recovery in real terms expected over 20 years"

I think they are far too bullish, think about it for a few seconds.

Why on earth would real prices ever get back to these levels? It's taken a demographic bubble and biggest ever credit bubble to get to those peak real prices last year.

I don't think it can happen again for multiple generations. We'll be long gone before these real prices return for a given house that is maintained but not improved/extended.

The only way I see a possible real increase is if the cheaper houses get bulldozed to move the average up.

20 years is a more realistic for nominal prices to be matched.

VMR.

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Sounds about right!!

Am loving this CRASH!!

Bring on the recession of all recessions!!!

Yeah. Bring on the recession that will never end.

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Not if you consider the fact that the UK economy in 2008 is exactly where the Japanese economy was in the late 80s..

But that doesn't mean that the recovery pattern or timescale would be the same.

Edited by blankster

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The pessimistic forecast came as one of the City’s leading banks warned that it could take 20 years for the British housing market to recover. In a note to clients Mark Hake, an analyst at Merrill Lynch said: "[Compared] with the 1990 correction... it looks significantly worse, with house prices falling faster and further and very little recovery in real terms expected over 20 years."

He added: "House prices are expected to be below their August 2007 peak in a further 10 years' time."

The investment bank expects prices to fall 17 per cent this year

http://www.telegraph.co.uk/money/main.jhtm.../nborrow708.xml

Link on bloomberg..

http://www.bloomberg.com/apps/news?pid=206...mp;refer=europe

Sadly, it will be as many on here have said: a generational thing. Gordon's miraculous expansion of credit and inevitable debt its not dissimilar to the South Sea Bubble which also took a generation to recover from. Mindless speculation and greed fostered by a government only too willing to sell the miracle as some form of "growth." Gordon has, in effect, help create a whole generation of debt slaves who will lose any incentive to work because their efforts will seem to be pointless. After all, if your house is in negative equity and your credit card debt insummountable why bother?

Edited by Realistbear

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OK, I can understand why you might want a house price crash but why welcome a recession? Those on lower incomes will suffer the most, tax revenues will dip leading to lower spending on services such as the NHS, unemployment will spiral with the attendant misery that brings, pensions will be worth less etc etc. So I ask again, what sort of moron wants a recession?

Someone young enough not to have experienced one.

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But that doesn't mean that the recovery pattern or timescale would be the same.

It will be worse. Japan has a strong manufacturing export economy that could rely on other countries to help it out.

UK has f' all to export and other G8 countries are likely to be in the same boat as ourselves.

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Not if you consider the fact that the UK economy in 2008 is exactly where the Japanese economy was in the late 80s..

Not quite... The Japanese economy had (still has) a world class manufacturing economy...... Sony, Mitsubishi, Toyota...... etc etc. and about 1/3rd of the world Pharma business.

The UK has a world class sandwich (BTL/BLT) and frothy coffee-based economy.

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any-one who has read "Black Swan" would be very careful about making such grand predicitons about the future.

it wasn't so long ago that they were predicting how house prices would be 10 times average earnings by 2010.

as for a recession, while it might bring about lower house prices, it will also mean less jobs. possibly your job. if you haven't got a job, no matter how cheap houses get, you aren't going to be able to buy one.

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Someone young enough not to have experienced one.

As the old song goes: "You can't have one without the other..............."

Gordon's miraculous house bubble is crashing and will inevitably take the rest of the economy with it. We are following the US and will suffer more because our bubble was bigger and our economy less diversified.

This next recession will be worse than those of recent decades because the debt levels are at unprecedented levels. The bigger the debt the larger the recession that follows. I think the last 50 years of bingeing has finally caught up with us. "Rip off" Britain where everything costs more than anywhere else because people are willing to pay more than anyone else with the help of their flexible friends will be no more.

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I think you answered your own question only a moron would want a recession.

I see a recession as a correction in prices, values - it's reality stupid!

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any-one who has read "Black Swan" would be very careful about making such grand predicitons about the future.

it wasn't so long ago that they were predicting how house prices would be 10 times average earnings by 2010.

as for a recession, while it might bring about lower house prices, it will also mean less jobs. possibly your job. if you haven't got a job, no matter how cheap houses get, you aren't going to be able to buy one.

You are if you pay cash. ;)

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any-one who has read "Black Swan" would be very careful about making such grand predicitons about the future.

it wasn't so long ago that they were predicting how house prices would be 10 times average earnings by 2010.

as for a recession, while it might bring about lower house prices, it will also mean less jobs. possibly your job. if you haven't got a job, no matter how cheap houses get, you aren't going to be able to buy one.

There is nothing wrong with a recession if it`ll rid the economy of the tens of thousands of public sector non jobs that Nulabour has added in the last 11 years and cause a property crash that would end the obsession with property and lead to investment in the real economy..

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The pessimistic forecast came as one of the City’s leading banks warned that it could take 20 years for the British housing market to recover. In a note to clients Mark Hake, an analyst at Merrill Lynch said: "[Compared] with the 1990 correction... it looks significantly worse, with house prices falling faster and further and very little recovery in real terms expected over 20 years."

He added: "House prices are expected to be below their August 2007 peak in a further 10 years' time."

The investment bank expects prices to fall 17 per cent this year

http://www.telegraph.co.uk/money/main.jhtm.../nborrow708.xml

Link on bloomberg..

http://www.bloomberg.com/apps/news?pid=206...mp;refer=europe

But I thought the UK was tipped to be the wealthiest country in the world by 2020! :unsure::lol:

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House prices may drop as much as 17 percent by the end of next year, with a possibility that they may only return to 2003 levels by 2011, according to Merrill Lynch.

The current downturn looks ``significantly'' worse than the 1990s ``with house prices falling faster and further and very little recovery in real terms expected over 20 years,'' the analysts said.

A drop of only 17% in the next 18 months?

A return to 2003 levels suggests prices around £125k in 2011, down from £172k now (Nationwide data). This would be a drop of 27% from current levels, or another 10% from their 2009 prediction.

So, to summarise, they expect -17% by end 2009 and a further -10% by end 2011. Not sure about the other 17 years though.

IMO its too little early on (I expect at least 50%), but I also see no reason for the next peak to be as high as the last one.

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  • 395 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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