Thursday, November 4, 2010

House prices falls start to increase

House Price Index Oct10

""Prices in the three months to October were 1.2% lower than in the preceding three months. This measure gives a better indication of the underlying trend in house prices than the monthly changes."

Posted by doomwatch @ 09:06 AM (2327 views)
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10 thoughts on “House prices falls start to increase

  • sibley's b'stard child says:

    Can’t say i’m not disappointed.

    My Foex prediction will be Smugdog makes an appearance today….

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  • sibley's b'stard child says:

    *Forex, even.

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  • Having worked for the halifax in the 80’s I know just how much notice to take of their “data”! Against a backdrop of circa 500,000 extra unemployed over the coming year, and continued loan famines for 80%+ loan-2-value mortgages, the only question is whether we are looking at 5-10% further reductions, or else 20-30% reductions. The latter will at some point trigger huge acquisitions by speculators, which will then complicate the market further, and we could end up with a US style wasteland of empty homes and bankrupt former entrepreneurs. Champagne, anyone?

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  • mark wadsworth says:

    Their figures are all over the place – their minus 3.7% m-o-m for September was wildly overstated, so this month they’ve pencilled in plus 1.8% m-o-m, i.e. over two months we are looking at minus 1.9% which is probably “about right”, or to use their spin “gives a better indication of the underlying trend in house prices “

    Nationwide is the best one to use, IMHO.

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  • @3…………. yep, with you there mark…….. Nationwide seem to have a better data set, ………..and number cruncher………….

    Halfiax’s YoY figure is a cheeky/skewed statistical misrepresentation, if you read carefully they are selecting their figures very selectively…….. they claim house prices are 1.2% higher in Oct 10 than in Oct 09 (literally the first figure at the top of the release)………….. lower down (top of page 2) …… “House prices remain higher than a year ago” (in bold)………. BUT continue reading……….. they go onto explain that this calculation is based on the average of the last 3 months to Oct 10, and the average of the 3 months to Oct 2009. So +1.2% isn’t (month of) Oct 10 divided by (month) of Oct 09 expressed as a %age (that calculation gives -0.1% for Oct 2010, and was -0.7% for Sep 10). Instead they are calculating an average of Aug, Sept and Oct 2010 (average) house price, then dividing through by the same average for last year.

    Hence, on the monthly/monthly measure, house prices are already -ve YoY on the Halifax stats, they just choose to cherry pick their numbers (no doubt falling back on the “more reliable quarterly data”, even though the index is published monthly).

    In their defence, they do explain their YoY calc on page 2………… but how many press pieces are going to cover the calc methodology, and how many financial journos have the time to read page 2 of the report?

    On the upside……………it’ll take a 2.2% monthly increase in house prices in Nov 10 to keep their YoY figure +ve next month (based on their average/average calc)…….. no chance….

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  • mark wadsworth says:

    PhD, you are gradually drawing the bubble chart, complete with lovely DCB 🙂

    Are you never tempted to sketch in the next few years as well?

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  • I’m surprised their headline wasn’t House Prices Recover with +1.8 in October, or perhaps they’re leaving that for the Express.

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  • This is why I love HPC, always someone a bit smarter than the vested interests.

    Thank you ana lytics and phd.

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