Saturday, October 3, 2009
In UK measure of affordability is still nearly 60% above its level in 2000
"In Britain prices fell by around 11% in the year to the second quarter of this year but are still slightly higher than in the third quarter of 2003. In America the Case-Shiller index of national prices is back to where it was in the fourth quarter of 2000. And, despite the falls, the ratio of average prices to average incomes, a measure of the affordability of housing, is still nearly 20% above where it was in 2000, a few years into the house-price boom. In Britain, this measure of affordability is still nearly 60% above its level in 2000. ........The IMF argues that although house prices have already fallen by 20%-close to the historical averageâ€“â€œthere could still be significant corrections to comeâ€. This conclusion will not please those hoping for a sharp recovery."