Thursday, August 10, 2006
The global economy means UK house prices are not wholly dependent upon interest rate rises.
Robert Barrie: Why we must not read too much into house prices, fascinating though they are to many
There's a correlation, not a causal, relationship between consumer spending and house price inflation. The correlation between house prices and interest rates is likewise dubious. If you want an idea of where UK rates might be going in the coming months, look beyond our own shores, but a rise in rates does not necessarily mean a house price crash.
Posted by talking rot @ 10:48 AM (535 views)
5 thoughts on “The global economy means UK house prices are not wholly dependent upon interest rate rises.”
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Delboypass says:
Ok then…so lets put interest rates to 10%..this wont have any affect on the housing market will it???
Also lets remove IO morgages as well….
Of course they have an affect!!! Its called affordability!!
paul says:
“A good reason for being concerned about a sustained period of house price rises is that they may make subsequent falls more likely.”
I’d say that means a rise in rates doesn’t necessarily mean a house price crash WON’T happen.
nick says:
It’s still all denial right now I bet they start to talk about property “bargins” when prices start to fall and what a great investment property now is, exept the falls will just keep on comming
Nick says:
It’s still all denial right now I bet they start to talk about property “bargins” when prices start to fall and what a great investment property now is, exept the falls will just keep on comming
indiablue19 says:
What this character seems to be saying is that you can’t use house price levels as a pretext for declaring an economy healthy or unhealthy and we therefore shouldn’t “obsess” on house prices as a particular indicator of overall consumer spending or upward and downward trends; partly because if your house price goes up, so will the price on any house you intend to buy. So what have you gained. OK. So what?
He says there are many other factors to be considered in monitoring the health of an economy. Interest rates going up and down might be one of those. Right. Manufacturing output. Yup. Got it. This guy’s a barrel of information and probably the hit of any drinks party. Yawn……