Monday, July 27, 2009

Really?

Housing slump could have bottomed out

House prices were unchanged in July for the third month running, housing market analyst Hometrack said today, suggesting the slump in the property sector may finally have come to an end.

Posted by happy mondays @ 09:03 AM (5369 views)
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25 thoughts on “Really?

  • What the artilcle actually says is this;

    Richard Donnell, director of research at Hometrack, warned that in the absence of a sizeable increase in mortgage lending and in the face of rising unemployment, the prospects for the housing market were poor.

    “A sustainable and broad based recovery needs to be founded on both an improving economic outlook and availability of mortgage finance – employment is key to buyer confidence and with talk of unemployment figures set to rise to 3 million next year, the short term outlook for would-be buyers remains uncertain,” he said.

    “In the last recession it took five years from the peak of the market to the beginning of a sustainable pick up in transactions and house prices. Approaching two years into the start of the current downturn, history suggests the market has some way to go before the real green shoots of recovery begin to emerge.”

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  • Snigger @ Independent.

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  • Unbelievable … complete misrepresentation of the facts! As Victor Meldrew would say, “I don’t believe it!”

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  • The way is UP, DOWN or DEEP but never FLAT

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  • House prices are currently stagnating during a period where they usual rise.
    To my way of thinking they are likely to fall during the quieter months. I’m certainly not as bearish as I once was and don’t expect huge falls in this crash cycle but as an investment, residential property still looks very poor.

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  • japanese uncle says:

    They kept saying house price would only go up just two years ago, didn’t they? How any sane-minded person can trust them any longer. Anyway their precious little credibility is doomed to be utterly wiped away in the very near future by this double-dip rubbish.

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  • If I had a penny for every time I’ve read that “house prices have bottomed out”, I could probably afford a 3 bedroom in W1.

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  • “The number of new buyers registering with estate agents rose by 2.8 per cent last month”.

    This is a spurious statistic if ever I saw one. How many people already on EAs’ lists have decided to give up their property search? About 8.7354% I would estimate.

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  • I have just checked Right Move for my area in W London and can say that asking prices have actually gone up, not good news.

    About 3 months ago prices were down, now there seems to be a renewed confidence with sellers putting flats on at around the £250k mark ?? when they were down to £200k which is still massively overpriced.

    Not sure what to think now, but am definitely not waiting around for prices to fall in the UK, this could take a long time and life is too short 🙁

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  • george monsoon says:

    Joe public is saddled with too much debt. and the risk of unemployment is very high.

    I cannot see any sustainable rise in property sales for the immediate future. This is a government funded lull in the housing crash, that will ultimately make the whole thing more painful.

    Just wait until interest rates start their climb back up and taxes are raised … there will be a wailing and gnashing of teeth when that happens…

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  • Everything seems to be in place for a crash, but sellers just are not lowering prices, absolutely stubborn, they will just not sell at a perceived loss, I am sure some cannot sell but we are still well short of getting back to 3 or even 3.5 average salary.

    I am usually an optimist but I have a feeling that sellers will absolutely not give in until they are forced to sell at a lower price, as at the moment what is there that would put a spanner in the works ?

    As a further example, I can see flats in really sh1tty areas ex council, 3 bed in a 20 storey block still going for £160 k, not going but the sellers will not budge.

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  • happy mondays says:

    @ 10, be patient, sellers, ea’s and alike will eventually have to lower prices, market forces, if everything else is stagnating, unemployment on the up, there can only be one way to go.. In the mean time try & have some fun, do not put your life on hold for the illusion that everything will be great if only i could buy a house!

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  • [email protected]

    Why rush in now? There is no pressure for you to buy, its not as if you have a legal obligation to buy property in order to live. I am quite happy living in rented accomodation and feel more secure now than I ever did whilst in a mortgaged property. My job could be at risk for the third time in four months, in this uncertain environment my common sense tells me that I am better off renting.

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  • Maccagrabme says:

    Unless absolutely desperate why would they want to drop their prices given that many of them have either had their hours or wages reduced or worse? For the majority in this country the house is their only wealth….sadly. Something drastic has to happen before there is a significant slide down, right now its a very slow slide.

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  • mark wadsworth says:

    @ Andrew “am definitely not waiting around for prices to fall in the UK, this could take a long time and life is too short”

    As happy mondays says, why is renting rather than buying “putting your life on hold”? Perhaps the doomsters among us are wrong, perhaps by some miracle of direct and indirect subsidies they will keep the house price bubble semi-inflated for a while longer, feel free to go and buy if you wish, but I for one am sitting tight for at least another year, possibly two.

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  • paranoia blue says:

    Yes, my wife and I have been renting now, for over 5 years, with absolutely no regrets. One has no maintenance worries [In fact or latest house comes with large garden and accompanying gardener].
    Factoring in house price falls and interest payments on our capital we have been in clover. It is just last year, or so, – with the glubbermint short-term-ism thinking – re: “silly-billy” low interest rates, that I’ve had to do some thinking. However, it gave us the opportunity to take all of our savings out of bank accounts, premium bonds etc. I believe this will only be a short-lived nuisance, as rates will have to rise.
    The overriding problem being of course, debt, debt, debt on all fronts……..

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  • I wonder how long it will be before people come to realise that the economy is simply contracting to a sustainable level, and that thereafter, per capita GDP will show only the smallest amount of growth.

    There still seems to a perception that once the recession is out of the way, the economy will go charging ahead again..

    – But why? What is happening in this country to justify such an outcome?

    It’s just not going to happen.

    The best outlook is for contraction, some over contraction; followed by sustainable stability.

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  • little professor says:

    “I have a feeling that sellers will absolutely not give in until they are forced to sell at a lower price”

    At the moment low interest rates and relatively low taxes are allowing people to hold on to their properties – with unemployment surging ahead, and interest rates and taxes set to rocket next year, many people will indeed be forced to sell as they will be unable to service the mortgage.

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  • george monsoon says:

    Its just a matter of time…….

    Interest rate rises
    inflation
    job losses
    devaluation of the £

    Batton down the hatches… we are in for a bumpy ride..

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  • Housing slump could have bottomed out…
    Elvis could have retired to a penthouse suite on the moon
    My dog could have discovered perpetual motion
    A six year old schoolgirl could have found a cure for cancer doing her biology homework.

    All very true statements.
    All would sell newspapers.
    All utter bolox.

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  • I suggest that so far we have tended to underestimate the ability of our financial system to keep propping up house prices and maybe they will surprise us for a few years more. Long term, however, I just don’t see where the money is coming from. We’ve had a credit supply excess generated a property sugar high that must come down in the end. A long slow painful decline looks likely now, unless we have a currency crisis first, of course.

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  • @andrew

    It’s “frustrating”, but in the end, I believe market forces will sooner or later prevail. Government internvention (history tells us) will either hasten or delay this – but not stop it. Once the last bubbles of cash can no longer be retained, expect to see despair and surrender. Most people have some cash to hold out; spurred on by faith, hope, pride, whatever. When no buyers come forward, the choice is this: Do I sell, or do I not? If the choice isn’t the sellers as to if he sells, then the price can only go one way. It does not matter how cheap money is, noone will really lay down the cash if they believe it’s a bad investment. I think too many people are too aware that we have some way to go. Anyone in the luxurious position of having a choice will take it. Wait. Prices are not going to “boom”, the rest of the world is simply not there, or not likely to be for a very, very, very long time

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  • gone-to-colombia says:

    Growler, I completely agree with you. The old paradigm takes time to die even though a new reality has already happened. This is quite typical of how the collective mindset works. For example, the imperial age of the Victorians died with the Queen Empress, yet, it took the first world war to punctuate this manifest reality. The cash running out will work as well.

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  • @Growler

    Sensible commenting. Couldn’t agree more. Government propping up a falling housemarket for political gain (no surprise there) and thereby causing the pain to continue longer than it should for FTBs waiting to buy. Don’t be disheartened – just carry on renting and saving.

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  • Things sometimes take longer to come to pass than common sense suggests.

    I think confidence in property as an investment has not, to date, been as dented by as much as one might have expected; simply by virtue of the facts that many other investments have fared worse, the banks have shown themselves to be fallible, and the government has started printing money.

    Confidence seems to be returning to the equity market, and the possibility that your bank might suddenly vanish with your hard-earned is a diminishing concern. Meanwhile, those hoping for a rebound on the property front will be frustrated by the enduring absence of first time buyers.

    I don’t expect sudden market capitulation on the property front, more the withering of confidence as prices resume their descent.

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