Wednesday, October 12, 2011
Unemployment up, inflation up, house prices down
House prices to fall 10% by 2013
Weak economic growth and falling employment will cause house prices to fall 10% by 2013, according to Capital Economics. In a Q4 housing market report, Capital Economics predicts that house prices will decline by 5% in both 2012 and 2013. And it says that the threat of another major financial crisis and a return to recession mean that risks to its forecasts are to the downside....It says: “Against this backdrop, house prices have further to fall. While traditional valuation metrics are not a perfect guide to the scale and timing of future price movements, they suggest that housing is overvalued by up to 20% relative to historical norms.
Posted by jack c @ 10:35 PM (1874 views)
7 thoughts on “Unemployment up, inflation up, house prices down”
Add a comment
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
stuartking says:
Good stuff… and they’ve got it right, IMHO. Only a mug would buy house now expecting it to rise in value.
sibley's b'stard child says:
Good old Capital Economics, they’re the yin to Assetz yang.
markj69 str05 says:
Excellent analysis, excellent conclusion.
And -20% would bring Hali-wide av’ house prices down to about mid 2003 values (£130K ish). Which isn’t far off 4x avg’ salary. Question is, if it’s -5% in 2012, and -5% in 2013, does that mean 2014/15 are going the same way? Or can we expect a faster drop as per 2008!
It would be nice to tell MrsJ she can start looking at houses again next year!
clockslinger says:
Yeah, right, Capital Economics!
Sure, you can’t be right all the time but these boys get it wrong so consistently and by such a massive margin every few months that this can only mean a rise is almost certain.
Dan says:
The Average house price was manipulated to rise by 300% in just ten years. From 96-2006.
Over that same period, the average wage rose by just 6.5k.
You could take 50% off from peak, and they would still be overpriced against all historic measures of affordability. End of.
FTB will return when we see the cycle return to 2.5x salary of an INDIVIDUAL.
Daveats says:
more quantative easing needed to prop them up on the cards i believe
mark wadsworth says:
CE are unfortunately perma-bears, and like me, they have called it wrong every year apart from 2008 (when prices did indeed fall quite handsomely).