Wednesday, July 28, 2010

Falling knife awareness on the increase

House prices will fall over next five years, says Niesr

More bear food on how the market will not keep pace with inflation. And also... Simon Kirby, a NIESR research fellow, said: “While we have assumed the housing market remains stable, house prices could decline at a more rapid pace.” With this the more likely outcome, folks on HPC, our time will come :-)

Posted by growler @ 07:13 AM (3370 views)
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19 thoughts on “Falling knife awareness on the increase

  • mark wadsworth says:

    Indeed.

    It is amazing how short most people’s memories are, in the 1990s house prices fell gradually for about five years in nominal terms (rather more sharply in inflation adjusted terms, of course).

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  • Mark, short memories or the 5 most dangerous words in history “Things are different this time”

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  • Yep it sure is a pity…

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  • happy mondays says:

    5 most dangerous words in history “Ha that could never happen” or “The government have full control”

    Mushrooms comes to mind, fed on bullsh*t & kept in the dark…

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  • mark wadsworth says:

    Est @ 2, indeed, “Things are different this time” is another one of my favourites.

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  • @ MarkW

    things are different

    Is what Estate Agents will start writing about soon. “Our area is different from the national average” will be the reporting in 100% of the UK local press over the coming months.

    Recaptcha irony:

    provisos Le

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  • apologies for italics

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  • Bank Of England thinks they have found the solution for high house prices : Slow inflation so that in 2015 houses become affordable eventually to 2003 levels. But we are missing the point here: people earnings and especially companies profits will not keep up with BoE engineered inflation.

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  • mark wadsworth says:

    Of course, house prices were already far too high in 2003. They ought to try and get them back to mid 1990s levels.

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  • Mander: I think we will have deflation, although right now we don’t. I agree and think we won’t see salaries rising much on the same timescale – since they will be inflation linked (from a viewpoint of negotiations anyway). Who will ask and strike for a pay rise in the circumstances of deflation and stagnant growth (apart from extra-terrestials) ?

    If the BofE get it wrong with their plans and there is inflation – I can’t see it demand-caused which is by implication what you mean with QE2. It will have to be cost inflation. And with sterling “recovering” this is hard to see.

    I must say I’m firmly in the deflation camp. Shrinking credit, end-user reserves used up, no pay rises, fear of unemployment, BRICs thinking about slowing up, PIIGS hopeful that they won’t have any serious problems, Euro under close observation, Gold still a favourite, bonds still a favourite – with some caveats – ….

    Recaptcha now getting amusing: 1939, foresaw !!!!

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  • Cheekie Charlie says:

    And still no reporting of this by the BBC. I’m no conspiricy theorist but the state run institution reminds me of the final days of the GDR when the statepress and leadership were deluded.

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  • >Who will ask and strike for a pay rise in the circumstances of deflation and stagnant growth?

    I think we know the answer to that, and in begins with a B; they don’t normally need to ‘strike’. But then again, if bank lending continues contracting, there may be less of them around in future. Champagne on ice.

    Nick

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  • mark wadsworth says:

    NickB, B for bureacrats? Or B for your surname?

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  • Mark,
    Read the next sentence, beginning “But”, it contains a clue. Bureaucrats are stuffed! Every cloud a silver lining etc.
    N

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  • mark wadsworth says:

    D’you mean “bankers”? Aren’t they being made redundant in droves?

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  • Good to hear. Will it stop another round of massive bonus payouts, though, to those remaining? If we have a large deflation there will be a massive redistribution from borrowers to lenders – those that remain standing.
    Nick

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  • “Of course, house prices were already far too high in 2003. They ought to try and get them back to mid 1990s levels”.

    Wadsworth, you, as a Politician, I commend you on your desire for sensible house prices for those priced out. Praise indeed.

    However, this conflicts with you previous postings of “having sold my property portfolio at the peek, blah blah blah”.

    Those who believe that your wishes are for pure self serving means in order to profit once more at the expense of others, how dare they!

    You are a fine upstanding (be it amateur and unelected) politician and one couldn’t imagine your underhanded intent.

    In reality though, you feed, fester and pontificate in the very same trough as the rest of the “do gooders and well wishers”

    And the “Home-Owner-Ists” thing, give it a rest, PLEASE.

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  • @Smugdog

    You don’t seem to be your usual cheerful self today.

    I can understand you complaining about somebody publicly cheering on a bull property market while secretly offloading their portfolio but if Mark decided that his property was overpriced and hence a liability, why not sell it? Sure we are motivated by self interest but that is not inherently evil, if you believe in capitalism.

    (I will spare you talk of LVT and homeownerism)

    (… this time 😀 )

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  • Smugdog: As quiet guy says and I also think.

    I don’t have a problem in anyone saying “I got out of the property market at the top”. I have a problem with the concept of “stand on me guv, this is a one-way bet and here’s the money” when you know reality lies elsewhere (no pun intended).

    It’s a bit like knowing you’re on a doomed ship yet taking a credit card payment off people in the restaurant.

    Extending the analogy:- I don’t have a problem with the guys going for the liferafts to save themselves.

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