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House Prices To Rise 30% Between Late 2009 And 2012

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House building grinds to a halt - and sows seeds of next boom says the Observer.

The credit crunch might already have sown the seeds of the next house price boom, according to a report out tomorrow from the Centre for Economic and Business Research (CEBR).

A sharp fall in house building, with 20 per cent fewer completions forecast for 2008 and 10 per cent fewer in 2009, is likely to be one of the key factors in prices recovering by the end of next year.

The CEBR says average house prices should rise by 30 per cent between late 2009 and 2012, 'partly driven by the shortfall in housing supply that the reduction in completions will inevitably precipitate'.

Gimme a ******* break.

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Hold on. I've just noticed that they don't say what's going to happen between now and 2009. It could be that prices are going to fall by 70% in a year and then go back up by 30% over the following 3 years.

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With many new build projects being mouth balled and new sites not starting , I find it strange that completions will fall this year 20% and 2009 by only 10% . surely there would be less completions in 2009 than 2008 . Is this just another load of boll---s by newspapers.

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Well let's hope there's a corresponding mini-boom in wages. I never understand why the popular press reports this sort of thing with glee, like it's a good thing.

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Interesting observations, Catflap.

The danger of this website is that it's very easy to become ingrained in a way of thinking. I noticed this happening with my own thoughts a few months ago and have now stepped back to concentrate on other things, while still keeping a beady eye on things (weekly scan through propertybee to cheer me up :P)

Even if that way of thinking is in fact correct, it's important not to descend into a restricted thought pattern which might start having more influence on our thoughts than the facts themselves.

In any case, I hope the 70's are not repeated. might be a good time to work abroad for a few years if it starts getting that bad.

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is likely to be one of the key factors in prices recovering by the end of next year

Same old same old. During the last crash the papers were full of stuff like this.

Link.

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The danger of this website is that it's very easy to become ingrained in a way of thinking.

...

Even if that way of thinking is in fact correct, it's important not to descend into a restricted thought pattern which might start having more influence on our thoughts than the facts themselves.

That's a very good point, although you might argue that that's partly how we got into this mess in the first place.

I may say that Catflap's remarks gave me pause for thought. I'm really not sure that I can handle the prospect of another mini-boom in the near future. Catflap's scenario is perhaps more plausible than the one in the Observer report in that he (she?) is giving us about 3 years before this starts, which would allow some time for prices to decline to more reasonable levels; the CEBR is talking about prices recovering by the end of next year and then increasing by 30% by 2012, which sounds absolutely terrifying (at least from the point of view of my mental health). It's not clear where they expect the money to finance this boom to come from. The guy from the CEBR says "... the sharp drop in building completions will mean higher prices if and when the credit markets sort themselves out." That's a big "if".

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Same old same old. During the last crash the papers were full of stuff like this.

You're up as well? You should have called yourself Prydonian Renegade of Darkness (Prod for short).

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The important point is not to dismiss that the same thing could happen again - we are in an economic period that is very similar to the 1970's in that we are in a commodities boom. In fact we are currently 8 years into a commodities boom that started in 2000 and 1 year past the peak of house prices - in 1974 we were also 8 years into a commodities boom that started in 1966 and 1 year past the peak of house prices.

1974 was also six years before the 1980 peak in the price of gold. For what it's worth, I've heard some precious metal commentators[1] predicting that the gold (and silver) prices won't peak much before 2015 this time around, so...

As we seem to be in the game of collectively peering at a join-the-dots puzzle to try to guess what it would turn out to be if only someone could find a pencil, I thought I'd add another dot to the page... ;)

[1] Mike Maloney and Robert Kiyosaki (the latter of 'Rich Dad' fame) among others.

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I've stuck my head out and already predicted that 2012/2013 may indeed be the peak of a 2/3 year mini boom that starts in maybe 2011 - see my recent thread. If interest rates get cut and inflation goes higher then we could see a similar effect to what happened after the main house price crash in '73 - ie. a mini-boom which started 4 years after the peak in Q2 1977 to Q4 1979.

More on this from me here:

The Nationwide Graph, What caused the mini boom from 1977 to 1979?

A Re-run Of The 1970's, HOUSE PRICES COULD RISE BY 25%

HPC theory says that 2012/2013 will be the trough in house prices whereas it could well be the peak of a 2/3 year mini-boom. The important point is not to dismiss that the same thing could happen again - we are in an economic period that is very similar to the 1970's in that we are in a commodities boom. In fact we are currently 8 years into a commodities boom that started in 2000 and 1 year past the peak of house prices - in 1974 we were also 8 years into a commodities boom that started in 1966 and 1 year past the peak of house prices. The parallels are eerily similar at present, particularly when you start to consider everything else that also happened back then:

The secondary banking crisis of 1973 was the peak of house prices - our present banking crisis which started with Northern Rock in 2007 was also the peak in house prices:

http://www.guardian.co.uk/business/2007/se...y.northernrock3

This crash and it's pattern feels like the last crash in '89 but as time goes by I think the pattern which emerges could be more like what happened in the 70's. I don't remember a banking crisis in the last crash and it was also in a deflationary period of falling commodities with a stock market bull run that lasted from 1982 to 2000.

We dismiss the possibility of a mini-boom starting in a few years time at our peril.

While there may not have been a banking crisi last time, banks did close often close their books to new lending (especially in the commercial sector).

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Steady on now!

If we get higher wage settlements (say 6 to 7% p/a) then I can see that we may get a shallowing of the falls (to say 30%) but until we see them then these pundits are misguided.

Currently average wage settlements are about 3.8% p/a. With wage settlements of around 5% p/a the effect will be to create a low of about 45%. So we will need to see average wages rise by greater than 5% p/a to get substantial shallowing of the HPC.

HAL

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Its indicative of the bipolar-cum-numberwang mentality that pervades British society; they're actually now encouraging bigger booms more often by way of property. The madness will only end with the demise of the prevaling duopolist media-politico hegemony, when they're all on hefty doses of Lithium bound up in straits jackets at Pescadero and the rest of us get on with our lives sanely and serenely without them.

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Interesting observations, Catflap.

The danger of this website is that it's very easy to become ingrained in a way of thinking. I noticed this happening with my own thoughts a few months ago and have now stepped back to concentrate on other things, while still keeping a beady eye on things (weekly scan through propertybee to cheer me up :P)

Even if that way of thinking is in fact correct, it's important not to descend into a restricted thought pattern which might start having more influence on our thoughts than the facts themselves.

In any case, I hope the 70's are not repeated. might be a good time to work abroad for a few years if it starts getting that bad.

A mate of mine is in debt up to his eyeballs, and has been given legal advice is he moves abroad for five years then returns, most of his debts would be rubbed out.

Anyone any info on this?

His is planning 6 years in Qatar.

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+30% 2009-12 is about +6.7% a year (1.067^4-1)

Not much mentioned on demand in that article.

They will only be right if that is preceded by a 60% fall in the last five months of this year. Hey, who knows.

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Anyone can make a long term prediction. If house prices keep falling until they are more affordable and builders have all given up, eventually there will be a shortage and prices will go up again. But that scenario looks to be a good way off from where we are now.

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If banks are only lending 3-4x multiples of salaries and no liar loans then prices will continue to be restricted to this level.

People will compete for houses on wages and deposits, no matter what the shortage of supply.

I cannot see banks going mad for lending in 2009 after having just been trashed by the house price falls of the last 2 years. In addition, if land prices are at sensible values again then it will not be too difficult to build new houses quickly and at lower price to meet the shortfall.

This report is utter shite.

Edited by mirage

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Whilst I do not disagree with Catflaps analysis, The 1970's had not seen liar loans, 125% mortgages, BTLs and the add on effect of banks giving mortgages to two salaries (husband and wife's).

I cannot recall that house prices reached the ridiculous levels of today. Also, inflation was rampant. I bought in 1971 and only had a window of about 3 months when my latest salary rise would just allow me to buy at 3 times mortgage, yet after 3 months, house prices had risen beyond my means. I missed this opportunity in 1970 so was ready to go immediately after my 1971 rise.

I would add, that it is OK to try to analyse markets, but it is no where near an exact science.

Come to think of it, if it was possible to forecast a market with total accuracy, there would not be a market as we know it, because investors like a hint of speculation.

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House building grinds to a halt - and sows seeds of next boom says the Observer.

Gimme a ******* break.

Seeing as they haven't taken into account the 250,000 people leaving the country each year and the

100,000's of migrants likely to leave when the recession kicks in early 2009, this will more than offset

a slowdown in housebuilding.

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  • 399 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% +
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      • Even
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      • up 5%



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