Thursday, Nov 23, 2006

Some people in the Beeb are bearish!

bbc.co.uk: House prices 'set to fall 20%'

Over the past decade, the UK has enjoyed the longest sustained rise in house prices than at any time since the Second World War.

Between April and June this year, the average price of a house stood at 154,503, compared to 65,025 in the same period in 1993, an increase of 138% - and more than the increase in house prices in the booms of the 1970s or 1980s.

But forecasters at Capital Economics say the housing boom is unsustainable, and predict that there will be a house price crash with profound effects on the economy.

Posted by cash_buyer @ 11:47 PM (410 views)
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9 Comments

1. Spleeper said...

This seems to be from 2003!

Friday, November 24, 2006 12:16PM Report Comment
 

2. Freewheeling Franklin said...

What on earth are you on about? Look at the date on the story - October 2003!

An interesting historical artifact yes - but all the charted prices from 2004 on are in a grey area labeled projection. Capital Economics have given up on the whole bear idea - probably because it's no fun when the markets consistently defy one's predictions.

Nope one bed flats are definitely going to be a million quid each by Christmas and I'll be living in t' cardboard box in middle t' motorway.

Friday, November 24, 2006 12:21PM Report Comment
 

3. Rubberneck said...

..and this one is 3 years old?

Aaah, I see what you're doing, very clever (?)

Friday, November 24, 2006 12:23PM Report Comment
 

4. paul said...

Some people on this forum are trolling with 2 year old news.

Bootle was famously wrong about his 2003 prediction. Bear in mind though that if the correction had been allowed to take place then, the market wouldn't be in the dire situation its in now.

;)

Friday, November 24, 2006 12:39PM Report Comment
 

5. Nohpc said...

Capitol economics predictions for 2006 was 5% drop in prices. If you keep saying it one day it might become true.

Friday, November 24, 2006 12:41PM Report Comment
 

6. Lasthunstanding said...

Clearly the prediction was wrong.

The overall prediction is average prices falling "to below 110,000 in 2007".

IMHO it would require something extraordinary to take it from 169,623 (Nationwide October report) to under 110,000 in a year.

But, it does illustrate that the Beeb were prepared to report this story back in 2003.

The Hutton report and the neutering of all journalistic integrity by the NuLab propaganda Nazis only happened in 2004. Would they have reported the story in 2004 once its metamorphosis to the Bliar Bumlick Corp had taken place? I think not.

Friday, November 24, 2006 12:54PM Report Comment
 

7. Doomwatch said...

yes, the only notable section from this old piece is

"As a result, Capital Economics warns that just a small rise in interest rates, to around 5%, would push that ratio to an historic high. "

Timber !

Friday, November 24, 2006 01:32PM Report Comment
 

8. bidin'matime said...

It does, however, underline the Beeb argument that they publish both sides of the argument - they might now say they gave air-time to what many would describe as an outlandish and obviously excessively bearish report...

Also interesting to note the following:-

"But Ms Kalyan dismisses this, arguing that the real ratio of housing costs to income is twice as high as usually reported, when taking into account such factors as endowment and pension repayments linked to house purchase... As a result, Capital Economics warns that just a small rise in interest rates, to around 5%, would push that ratio to an historic high. "

Of course, we now know that many (most?) buyers are now opting for interest only (a stupid practice that many a self-respecting economist would not have anticipated). So perhaps the recent rise to 5% has not yet pushed the cost to an historic high. However, we can't be far off.

So it's fair to conclude that Capital Economics' error was not the scale of the fall - it was the timing. They didnt know that the MPC would be foolish enough to lower rates in August 2005 and they didnt anticipate the trend towards not actually paying for your house... It's just a shame that, having cried wolf so loudly too soon, the establishment have cowed them into silence on the matter of HPC. But I've no doubt that, like me, they're just a' bidin' their time...





E's prediction was just

If prices

that Capital Economics was

Friday, November 24, 2006 01:34PM Report Comment
 

9. devil's advocate said...

Another old article from Cash_Buyer................

Friday, November 24, 2006 06:50PM Report Comment
 

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