Friday, April 10, 2009

A more intelligent bullish outlook

House prices may only have another 8% to fall

Ben Read, managing economist at the Centre for Economics and Business Research, says we may see house prices "likely to bottom out by the start of 2010." My question: is that nominal or inflation adjusted?

Posted by quiet guy @ 12:37 AM (2561 views)
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13 thoughts on “A more intelligent bullish outlook

  • little professor says:

    More intelligent? CEBR are as much crazy bulls as Assetzzzz.

    Jan 2007: Britain’s house prices to go on rising by £1,000 a month
    A leading think tank says Britain’s housing boom will continue in 2007, with average prices rising by more than £1,000 a month.

    The latest forecast from the Centre for Economics and Business Research says: ‘Despite recent rate rises, house prices will continue to grow in 2007 and 2008, with annual house price inflation this year expected to hit 7.6 per cent.’

    The CEBR is forecasting slower growth in 2008 and 2009, when house prices will probably increase by just 1.5 per cent and 3.9 per cent respectively. However, it does not share some experts’ fears that the market could be in for a correction of between 15 and 20 per cent
    John Ward, one of the report’s authors, added: ‘The underlying fundamentals of the housing market continue to support prices.’

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  • little professor says:

    March 2007: House price crash “off the cards”
    JONATHAN SAID, Centre for Economics & Business Research:

    It is quite easy, at first, to worry that the market could crash in the next few years.

    However, this ignores the fundamental problem with the housing market in the UK which will prevent a housing market bust: the demand for houses by far exceeds the supply of houses.

    This mismatch is caused by a number of factors. The UK does not have a large enough stock of houses in their areas where most people want to live. Population growth and an ever smaller household size means that there are more people who need to live in houses than ever before. Additionally, when thinking about buying a house, potential house buyers do not compare their income to the price of a house. Rather, they compare their income to their annual mortgage payments.

    Looking forward, as long as supply continues to fail to react to the burgeoning demand for housing, it is very unlikely that house prices will crash.

    As long as these fundamentals remain unchanged, a housing bust is very much off the cards.

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  • little professor says:

    Jan 2008: House prices ‘to fall 5.5% then rise again’

    The Centre for Economics and Business research predicted Britain will this year experience its first annual fall in house prices since 1995, according to a new study.

    The average is forecast to fall £11,000 to £188,000, but after this 5.5 per cent fall, it expects prices to begin climbing again in 2009.

    CEBR said the scale of the dip in prices will be limited due to a housing shortage, the likelihood that interest rates will be cut several times this year and more immigration.

    It believes the average home price will rise 3 per cent in 2009 and by higher levels in the following three years.

    The CEBR’s Jonathan Said said gloomy predictions of a crash were “overplayed”.

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  • little professor says:

    May 2008: Experts tell homeowners to stop worrying as prices will rise by 30%

    House prices will stop falling next year and will soar 30 per cent over the following three years, a leading economics consultancy said yesterday.

    The rare optimism will delight homeowners who have been worried by gloomy predictions in recent months.

    The Centre for Economics and Business Research predicts the housing meltdown will stop in the middle of next year and believes that by the end of 2012 average house prices will be up by more than £50,000 to a record £226,000.

    Homeowners who have bought in recent years and feared their home would never be worth the price they paid for it will be particularly relieved.

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  • shining wit says:

    Very good research little professor…

    These so called “experts” are nothing other than the tailors who made the emporer his new clothes.

    Their analysis appears to miss the fact that the banks have little money to lend, unemployment is ballooning, taxes will soon have to go up, as will interest rates and we will have a new government in 14 months who will have to cut public spending, pulling the rug from underneath chairman Brown and comrade Darling’s masterplans.

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  • shining wit says:

    Does “The Centre for Economics and Business Research” have Grant Bovey and Kirsty Allsopp on their board? Or perhaps Ken Dodd and Lester Piggott?

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  • ONLY another 8% to drop, i must be in a different country as where i live : dudley west midlands : house prices have dropped betweem 0 and 10% over the last 15 months if you are LUCKY. have asked estate agents the same question as to how come the land registry are saying prices have dropped 20% yet in reality they havent. the replies have made me ask the question are we really in a recession ???

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  • shining with said:
    “Does “The Centre for Economics and Business Research” have Grant Bovey and Kirsty Allsopp on their board? Or perhaps Ken Dodd and Lester Piggott?”

    Or even Sir Fred Goodwin!

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  • stillthinking says:

    Great. I am sure Darling won’t hesitate to confirm such good news as it relieves so much pressure on him concerning the budget.

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  • Mr Messy @7. I believe you have made exactly the same comment before.

    You may be in a very isolated pocket of the country or you may be speaking to the wrong people. A friend of mine completed the sale of his property yesterday not too far away from you. He had to let it go for 35% less than comparative properties made at the peak as he was emigrating and that was the best offer he had. Not sure whether your question about the recession was a joke!

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  • Mr Messy @7,

    Try going to your local auction room. Get an idea for prices there. Then head back to the estate agents and say “Well I saw a very similiar house going for just £x last week in the auction – that’s a x% drop. Why haven’t your prices fallen x% too?”

    Also if you’re serious about buying (pressure from the other half or whatever), then you can always put in a cheeky offer. Estate agents are required by law to pass on all offers to the seller, no matter how low!

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  • mytimeisnigh says:

    Mr Messy, maybe the estate agents are just playing with you because they don’t believe you’d get a morgage in the present climate. You should be able to negotiate in Dudley, it’s hardly a desirable area.

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  • thanks for your responses guys, am fortunate to not require a mortgage tha response from estate agents is thats the price of houses in that area, although i explain that non of them are selling and i have put some cheeky offers in of about 10 – 15% off the asking price non of them have been accepted . maybe its just me !!!

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