Sunday, January 18, 2009

Home buyers don’t need any help thanks

Help is at hand for homebuyers, but will it work?

Just imagine if, a couple of years ago, you had suggested that the Bank rate would soon be 1.5% and falling, and that, just to set things up nicely for a recovery, house prices would come down by 16%, pushing them back to their long-term trend line. In the housing market of 2007, such talk would have been regarded as the equivalent of shouting “fire” in a crowded theatre. The market of 2009 is very different. The Royal Institution of Chartered Surveyors (Rics), while reporting the highest level of buyer interest for more than two years, says sales and prices are still falling.

Posted by sold out @ 01:53 PM (958 views)
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2 thoughts on “Home buyers don’t need any help thanks

  • Wahey! Noshbag Smith returns with his usual sprinkling of half-baked economics theory, confused analysis and questionable statistics.

    This time he’s leaning heavily on RICS unquantifiable “levels of interest” to say that confidence may be returning soon. With his subtitle “Go Figure” he implies that the falls in rent are illogical – actually they are completely logical in a market saturated with buy to let “investors”.

    He also tries a statistical association trick of saying “A is falling but A is part of B which is rising fast”:

    The fallout in the housing market is spreading to farmland. Values in England fell by 5% in the fourth quarter of 2008, Knight Frank says; but record increases earlier in the year meant the annual rise was still 16%.

    Bad, bad economics. Shamfeul use of statistics to legitimize opinion as fact.

    My only question is – why hasn’t the recession already claimed his job?

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  • David Smith – “a couple of years ago, you had suggested that the Bank rate would soon be 1.5% and falling, and that, just to set things up nicely for a recovery, house prices would come down by 16%, pushing them back to their long-term trend line. In the housing market of 2007, such talk would have been regarded as the equivalent of shouting “fire” in a crowded theatre.”

    So that’s why he always denied there would ever be a property crash and kept saying everything in the garden was coming up roses – he knew all along, but just didn’t want to frighten everyone else…

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