krustie allslop Posted August 4, 2008 Share Posted August 4, 2008 Have House Prices Bottomed Out By Lorna Bourke | 12:00:00 | 04 August 2008 While homeowners and property investors absorb the latest dire figures on house price falls, the reality is that house prices are already 20% or more off their peak according to property veteran Simon Agace of estate agent Winkworth. Last week Nationwide reported that prices are now falling at the fastest rate since it began recording data in 1991, with an average drop of 1.7% in July – more than double the 0.8% decline recorded in June. House prices are now falling at an annualised rate of 8.1%, the fastest rate of decline for nearly 20 years, according to Nationwide while Halifax reckons the rate of decline is 10% a year. The average property price in the UK has dropped £3,099 – down from £172,415 in June to £169,316 in July. This is the lowest level since August 2006. Howard Archer, chief UK and European economist at Global Insight, said it was ‘odds-on that house prices will continue to head rapidly south.' He expects prices to fall by 15% this year, with further falls of 12% in 2009, to leave the average home costing £136,196. But Agace, chief executive of estate agent Winkworth, who has been in this market for over 40 years, says prices have already fallen by up to 20%. ‘Forget these monthly reports of price drops, whether they be a couple of per cent or just a fraction, the fact of the matter is that property prices have fallen between 15% and 20%, and sometimes more (depending on the area in question), since their peak in spring/early summer 2007,’ says Agace. Winkworth says asking prices alone have fallen by around 7% to 10%, while a further 10% to 13% is being negotiated off these. For example, Winkworth sold a good two bedroom flat in Acton for £265,000 in early 2007. The same flat went back on the market in April 2008 for £254,950. The vendor needed a quick sale, so it was reduced to £249,950 and then again to £229,950. A sale has finally been agreed at £225,000. Similarly, Winkworth Hammersmith has just agreed a sale on an unmodernised house in Gunterstone Road at £1,175,000. Last year a similar property achieved £1.5million. ‘The market has fallen quicker than anyone, other than the vendors and agents, who are in the thick of it, could have ever anticipated,’ says Agace. He points out that prices are currently being agreed well under asking price. But looking on the bright side Agace believes that house prices might have already bottomed out. ‘The transactional level may have just about reached the bottom, so things could soon be on the up,’ he says. ‘Looking back at past events, we can compare today's market to that of the 1970s when we had money rationing and similar credit restrictions. The proceeding recovery, instigated by oil wealth, was quite dramatic and changed the face of the London property market with the influx of the new wealthy foreign buyers. This set the trend for the future growth of the market. The recovery clawed back the losses and the market moved forward,’ he points out. His view is that wild fluctuations in property prices are nothing new and falls of 15% to 25% have happened in the past, particularly in the early nineties. 'Fundamentally, people will always need to move house and those with disposable income will always want to invest in property. There is a shortage of good residential resale property in the mid-upper price ranges and this is exacerbated by the high percentage of foreign ownership in the £5 million-plus market. Prices have now fallen and there are doubtless some good deals to be had, which will satisfy the average homeowner and leave them smiling at their luck in three years time,’ says Agace. But there is a major problem Agace concedes with new build apartments. ‘The new developments market, which is saturated and overvalued, is going to really struggle and it may take many years to recover. But this is the exception and not the rule.’ Agace concludes, ‘this price drop has been deep and swift, and possibly the worst we have ever experienced in recent history. Prices may fall a couple of per cent more in certain micro markets, but it is our view that there will be a small, but notable spate of activity in the autumn, with increasing stock levels.’ ‘This is when we will achieve a period of stabilisation and returning confidence. This is based on the assumption that politicians and the Bank of England do not make any decisions that could negatively impact the market further, such as an interest rate hike.’ Quote Link to comment Share on other sites More sharing options...
Waiting Patiently Posted August 4, 2008 Share Posted August 4, 2008 "ESTATE AGENT CLAIMS HOUSE PRICES HAVE BOTTOMED OUT"....in other news: bears found shi tting in the woods! Quote Link to comment Share on other sites More sharing options...
Moo Posted August 4, 2008 Share Posted August 4, 2008 In other news "Yes, it *is* the ultimate driving machine" says Horst Salesmann, Obersalesleutnant at BMW. Quote Link to comment Share on other sites More sharing options...
Byron Posted August 4, 2008 Share Posted August 4, 2008 So, the Spring bounce is going to happen in the Autumn then? Fat chance. Every EA knows that the Autumn is a slack period, people saving for Christmas, dark nights etc. (Their words, not mine) Quote Link to comment Share on other sites More sharing options...
Liquid Goldfish Posted August 4, 2008 Share Posted August 4, 2008 Every EA knows that the Autumn is a slack period, people saving for Christmas, dark nights etc. (Their words, not mine) It's different this time Quote Link to comment Share on other sites More sharing options...
Girly girl Posted August 4, 2008 Share Posted August 4, 2008 Honestly the lunatics have taken over the asylum Quote Link to comment Share on other sites More sharing options...
Nickolarge Posted August 4, 2008 Share Posted August 4, 2008 If he's a forty year property veteran he should have been warning us about the coming crash at least two years ago. Anyone care to search for some old quotes? Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted August 4, 2008 Share Posted August 4, 2008 Autumn 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020? Quote Link to comment Share on other sites More sharing options...
johnygee Posted August 4, 2008 Share Posted August 4, 2008 he is talking right about 15-20 % now and not the figures of8% banded about the press i am seeing 15-20% in my area now have been waiting for someone to agree with my thoughts last time around they dropped 25% in my area but what icant get my head around is that on a beautiful small developement of new build detached private developer were at there peak early 90's 365k dropped by 50% yet other like period properties dropped by 15-20% Quote Link to comment Share on other sites More sharing options...
Qplate Posted August 4, 2008 Share Posted August 4, 2008 I recently tried to sell my property that was valued in peak boom @ £99,950 for £87,950 (a modernised 3 bed terrace) without any viewings so resorted to having it valued for auction... I was told the maximum price i could hope to achieve on the day would be £60,000 - £62,000 so thats a 40% drop in real terms (My fool of a E.A is telling me to be patient it will sell @ £87,950!!!) In my opinion the 60k is the actual value of the property today as anything else is just figures on paper and not possible to achieve Quote Link to comment Share on other sites More sharing options...
Justice Posted August 5, 2008 Share Posted August 5, 2008 Forty year property veteran Simon seems to have forgot theat the last 3 crashes have all lasted 2-5 years so where did he get this from or did he just pluck it out his a$$. It's sad i know but if you look at the charts then crashes normaly last as long as the booms so hunker down for a long wait if you are a real bargin hunter. My guess is taxes are going to keep rising and this includes god knows how many fines/Stealth taxes Quote Link to comment Share on other sites More sharing options...
Justice Posted August 5, 2008 Share Posted August 5, 2008 I recently tried to sell my property that was valued in peak boom @ £99,950 for £87,950 (a modernised 3 bed terrace) without any viewings so resorted to having it valued for auction... I was told the maximum price i could hope to achieve on the day would be £60,000 - £62,000 so thats a 40% drop in real terms (My fool of a E.A is telling me to be patient it will sell @ £87,950!!!) In my opinion the 60k is the actual value of the property today as anything else is just figures on paper and not possible to achieve Thnaks for being honest with us. Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted August 5, 2008 Share Posted August 5, 2008 Nope, as with the 1929 Great crash , more money was lost on people mistakenly thinking the market had bottomed out than lost during the initial crash. Quote Link to comment Share on other sites More sharing options...
libspero Posted August 5, 2008 Share Posted August 5, 2008 Autumn 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted August 5, 2008 Share Posted August 5, 2008 http://business.timesonline.co.uk/tol/busi...icle4450162.ece The Sunday TimesAugust 3, 2008 ...../ The housing slump was “nowhere near the bottom”.../ We are only just a year or so into the credit collapse. The effects are slowly moving into the economies that participated in the "miracle house prices" with unemployment just starting to rise as consumer spending collapses. So are we near the bottom in house prices? I think Greenspan is right and the estate agents wrong. Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted August 5, 2008 Share Posted August 5, 2008 Last week Nationwide reported that prices are now falling at the fastest rate since it began recording data in 1991 [...] Idiot journalists please note: because 1991 was in the middle of a crash, that means only one thing: We are now in a crash. Quote Link to comment Share on other sites More sharing options...
Live Peasant Posted August 5, 2008 Share Posted August 5, 2008 There is just the small matter of the collapse of the dollar and resulting hyperinflationary depression to get out of the way first Hmmmmm, must stop watching Peter Schiff videos on youtube. Quote Link to comment Share on other sites More sharing options...
Optobear Posted August 5, 2008 Share Posted August 5, 2008 Have House Prices Bottomed OutHis view is that wild fluctuations in property prices are nothing new and falls of 15% to 25% have happened in the past, particularly in the early nineties. Do you think he knows the difference between the actual prices and the index linked prices? In the early 90s the index linked prices fell like that, but the actual price didn't fall anywhere near as much because inflation eroded the prices instead of price drops. This time is different, we are talking 20% falls in actual prices, the falls are so large and rapid, and indicate that things really are different. Optobear Quote Link to comment Share on other sites More sharing options...
benj Posted August 5, 2008 Share Posted August 5, 2008 ‘Looking back at past events, we can compare today's market to that of the 1970s when we had money rationing and similar credit restrictions. The proceeding recovery, instigated by oil wealth, was quite dramatic and changed the face of the London property market with the influx of the new wealthy foreign buyers. This set the trend for the future growth of the market. The recovery clawed back the losses and the market moved forward,’ he points out. The comparison works really well up to the point where a catalyst for recovery appears out of nowhere. I'm not sure what this guy thinks is going to cause a sudden huge influx of wealth to the UK over the next decade? Because I sure can't see what's going to drive it this time. Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted August 5, 2008 Share Posted August 5, 2008 Old Monsieur Agace hasn't survived 40 years in the EA business by telling the truth, y'know............. Quote Link to comment Share on other sites More sharing options...
Goat Posted August 5, 2008 Share Posted August 5, 2008 Idiot journalists please note: because 1991 was in the middle of a crash, that means only one thing:We are now in a crash. Journalists please note: EA press releases do not constitute unbiased or independent commentary, nor are they experts in the field. EA's are salesmen, their job is to talk up the market, their press releases need to be read in that light. The market is down 15-20%, but this is normal; things might improve next year if nothing else goes wrong roughly translates as "the market is truely f***ed, there is no hope of an early recovery, I need to insert some insane optimism to drum up some business and minimise our losses" Quote Link to comment Share on other sites More sharing options...
r thritis Posted August 5, 2008 Share Posted August 5, 2008 ‘The market has fallen quicker than anyone, other than the vendors and agents, who are in the thick of it, could have ever anticipated,’ says Agace So the vendors and Agents anticipated all this. And there was me thinking that it caught them by surprise. Quote Link to comment Share on other sites More sharing options...
1800s Posted August 5, 2008 Share Posted August 5, 2008 I still keep reading about estate agents trying to overvalue property and i have written about it a couple of times in posts, but being told that there are estate agents doing it right. I don't think so, they are all in the same circle, for some reason they want house prices to stay high and so desperate to keep them high they are prepared to lose huge amounts of business in no sales in the process. I realy do not understand their thinking. They are all the same and they are all telling people to hold out, very strange behaviour as they would definately know what is happening to the market. Insidentaly like the 1990's crash, house prices reached a point where they actualy never sold at so the top valuations was very rarely reached. This downturn has been going on for two years (2006) and not since 2007. Quote Link to comment Share on other sites More sharing options...
Goat Posted August 5, 2008 Share Posted August 5, 2008 I still keep reading about estate agents trying to overvalue property and i have written about it a couple of times in posts, but being told that there are estate agents doing it right. I don't think so, they are all in the same circle, for some reason they want house prices to stay high and so desperate to keep them high they are prepared to lose huge amounts of business in no sales in the process. I realy do not understand their thinking. They are all the same and they are all telling people to hold out, very strange behaviour as they would definately know what is happening to the market. Couple of different things going on here. Firstly agents have a tendency to value high to get the instruction, then persuade the sellers to lower the prices once they have it. Secondly agents' public pronouncements on prices are always going to be uber bullish, show me an EA who says to the press "prices down 40% over the next 3 years" and I'll show you an ex-EA. Quote Link to comment Share on other sites More sharing options...
Joey Buttafueco Jr Posted August 5, 2008 Share Posted August 5, 2008 Do you think he knows the difference between the actual prices and the index linked prices? In the early 90s the index linked prices fell like that, but the actual price didn't fall anywhere near as much because inflation eroded the prices instead of price drops.This time is different, we are talking 20% falls in actual prices, the falls are so large and rapid, and indicate that things really are different. Optobear "but the actual price didn't fall anywhere near as much" They did in a number of areas. http://www.fool.co.uk/news/property-home/2...sing-crash.aspx http://www.fool.co.uk/news/property-home/2...ooyhoit14050001 Quote Link to comment Share on other sites More sharing options...
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