Wednesday, July 18, 2012
PwC reckon there will be no crash
House prices to recover but will take a long time to return to previous peaks
“by 2015, house prices will still be around 8% below their 2007 peak level in cash terms and around 24% lower in real terms after adjusting for inflation. In cash terms, the previous peak might not be exceeded until 2017 in this central scenario. By 2020, the analysis suggests that a gradual easing of credit conditions, combined with housing supply shortages, could push average UK house prices back up to almost 30% above their 2007 levels in cash terms. However, this would still be around 7% below their 2007 peak in real terms (once inflation has been taken into account). The 2007 real peak might not be regained until around 2024 in this central case, although there are large uncertainties surrounding any such long-term projections.â€
Posted by quiet guy @ 10:29 PM (1582 views)
5 thoughts on “PwC reckon there will be no crash”
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Pwez says:
You don’t understand what a crash is, do you? They predict a crash
Loneranger says:
No mention once again on interest rates, these will definitely be higher come 2020 which will further impact affordability. In addition, if their prediction of first time buyers being in their late thirties becomes a long term reality then in the short term there exists a huge risk of a mass exodus of our young people eager to start a family to a country far more accommodating to the natural process of procreation and community…. this would create downward pressure on the supply problem.
This article is too simplistic and does not discuss in detail the social implications mentioned above, it is all too keen to promote HPI in my opinion.
khards says:
Obviously 2007 prices were unsustainable, so are they penciling in a recovery around 2020 followed by a crash in 2024??
Looks like it to me. Only another 8 years left of the lost decade.
khards says:
Obviously 2007 prices were unsustainable, so are they penciling in a recovery around 2020 followed by a crash in 2024??
Looks like it to me. Only another 8 years left of the lost decade.
quiet guy says:
@Pwez
From the article:
“In cash terms, average UK house prices projected to be broadly flat for the next couple of years, but then recover gradually later this decade as supply shortages reassert themselves.”
“However, as house prices are likely to stay high relative to earnings by historic standards, and credit is likely to remain less readily available than before the crisis, we estimate that a single person leaving university today is unlikely to be able to afford their first house until their late 30s without financial assistance from their parents or others.”
If you call that a crash then so be it but that doesn’t satisfy me.