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Halifax July Figures show slowdown in price falls
Comments
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There's a bit of a trend which is quite important:
* Stuff that's going up in price - everyday essentials
* Stuff that isn't going up in price - non essentials (I don't count paying a fortune to own a house as an essential. Renting is good enough to put a roof over your head and I can only say that my personal rent has been static over the last 18 months).
Go back to my original post which chucky took issue with ...
Inflation currently sits around 3.8%, probably increasing to closer 5% next year. somehow your figures don't stack up.
.... you'll find that in fact my figures do stack up.
And yes, I've certainly noticed that house prices are coming down
The thing is !!!!!!, only 2 things are really going up in price, oil and food. So we need to ask why they went up in price?
Oil - It isn't. Its price has gone into a sudden and dramatic decline. Lots of people are predicting it'll stop falling at $110 or $100/bbl. It won't IMO. It'll do what all commodities do which is fall to it's marginal cost of production, that being well under $100/bbl.
Food - Mostly it went up in price due to a big drought in Australia and to a lesser extent in Asia. I understand Asia is returning to normal. I'm almost certain Australia is. I don't believe the hype about Chinese people eating more pork or whatever. Anyway, food prices are never high more than 2 years running unless there's a war on. It's too easy to increase production for prices to stay high for long. Expect bumper harvests for the next couple of years.0 -
The inflationary blow-off (prior to deflation) in some sectors doesn't bother me... given prices are falling in others.
Who cares if my petrol is an extra £20 a week, when, on just June figures alone, I'm saving £900 a week on an average house, simply by not buying in a falling market. The savings are flooding in.
Indeedy - were I to buy the house I currently rent I estimate I'd save approx £35k against the price when I moved in. That's more than 70k less to borrow and 100k less gross earnings needed.
Hard to say exactly as prices round here haven't come down enough to the point where properties are shifting in any significant amount. Four or five houses in my street with 'For Sale' signs up for almost a year. Quite a few more now with 'To Let' or 'Let By' up, and that is repeated street after street.
I don't think prices of essentials will fall by much in nominal and definitely not real terms though. The deflation is going to be in things like houses, expensive cars and luxury fripperies.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
The cost of home heating oil for my OFCH has almost doubled in a year. Diesel for my car is up 25% since the start of 2008. Most of the basic foodstuffs are up 10% or more on the year. Electricity/Gas bills are up (or going to be up shortly) from 10-40%
I'd call that raging inflation. Especially given that my salary has seen an increase of precisely 0% in the last year to compensate.
Luckily, houses are dropping ca 10% YoY so it's not totally bad news for my savings.
You're obviously buying the wrong things !!!!!!. Include more iPods and Plasma TV's in your weekly shop and you'll find your personal infaltion rate is much more manageable :rolleyes:0 -
The thing is !!!!!!, only 2 things are really going up in price, oil and food. So we need to ask why they went up in price?
Oil - It isn't. Its price has gone into a sudden and dramatic decline. Lots of people are predicting it'll stop falling at $110 or $100/bbl. It won't IMO. It'll do what all commodities do which is fall to it's marginal cost of production, that being well under $100/bbl.
Food - Mostly it went up in price due to a big drought in Australia and to a lesser extent in Asia. I understand Asia is returning to normal. I'm almost certain Australia is. I don't believe the hype about Chinese people eating more pork or whatever. Anyway, food prices are never high more than 2 years running unless there's a war on. It's too easy to increase production for prices to stay high for long. Expect bumper harvests for the next couple of years.
In the context of my post it doesn't matter why they went up in price - my point was that they have went up in price and they are the basic essentials.
And as I said in another post here, I suspect that in relative terms they will remain major expenses from here on in. Deflation isn't going to mean a bumper bonanza of cheap living for people. Keeping your belly full and your house warm is going to be relatively more expensive than before for the next few years IMO.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Indeedy - were I to buy the house I currently rent I estimate I'd save approx £35k against the price when I moved in. That's more than 70k less to borrow and 100k less gross earnings needed.
Hard to say exactly as prices round here haven't come down enough to the point where properties are shifting in any significant amount. Four or five houses in my street with 'For Sale' signs up for almost a year. Quite a few more now with 'To Let' or 'Let By' up, and that is repeated street after street.
I don't think prices of essentials will fall by much in nominal and definitely not real terms though. The deflation is going to be in things like houses, expensive cars and luxury fripperies.
You make a good point re borrowing. Whatever nominal amount you save on a house you can effectively double due to the interest over the life of the mortgage. So suddenly 50k becomes 100k which is a hell of a lot of money!! I'd certainly rather have that in my pocket than not!0 -
People have got plenty enough money for food, and energy costs are manageable if you've not gotten yourself in to financial difficulties, lost a main income, or over-extended yourself.
Too many UK people have been used to having nearly everything they want... the latest playstation, fancy meals out, new alloys, designer clothes... often on credit or by MEW or on the assumption their jobs are safe and their income will remain strong and increasing. The over-extended feel the pain worse, and that is part of the correction. This is the shake-out.“An annual income of £5000 would place you in the richest 13.5 per cent in the world, and an income of £26,000 would give you an income among the richest one per cent — and you would not even pay higher rate tax within the UK.”0 -
mr.broderick wrote: »July Halifax figures show month on month fall of 1.7%. This is less than June 1.9% and May 2.5%. Looks like the minor correction is slowing. With an interest rate cut looking likely next month i envisage even smaller falls in the next couple of months with small rises occuring before the end of the year.
Back to the original thread....
This is the same man who decided that the crash / correction was slowing after Nationwide's June figures showed a 0.90% drop following a 2.5% drop in May. He has yet to explain how this fits in with the 1.7% drop reported by Nationwide in July.
Either, as other people have commented, he is a wind up merchant or he is taking the fickle monthly statistics too literally and not looking at the overall trend which is showing a frighteningly fast (even for a bear) fall0 -
In the context of my post it doesn't matter why they went up in price - my point was that they have went up in price and they are the basic essentials.
And as I said in another post here, I suspect that in relative terms they will remain major expenses from here on in. Deflation isn't going to mean a bumper bonanza of cheap living for people. Keeping your belly full and your house warm is going to be relatively more expensive than before for the next few years IMO.
But in the context of inflation is matters entirely. You have to look at why prices are rising to see whether what you have is inflation (the persistant tendancy for prices to rise) or just a bunch of things going up in price for a bit.
Deflation, if it happens, is going to be bad news for many (those with debt or whose job is dependant on those with debt mostly) and good news for others (holders of cash and those on fixed incomes such as pensioners).0 -
johnycoldears wrote: »Back to the original thread....
This is the same man who decided that the crash / correction was slowing after Nationwide's June figures showed a 0.90% drop following a 2.5% drop in May. He has yet to explain how this fits in with the 1.7% drop reported by Nationwide in July.
Either, as other people have commented, he is a wind up merchant or he is taking the fickle monthly statistics too literally and not looking at the overall trend which is showing a frighteningly fast (even for a bear) fall
Johny let me tell you i don't give 2 hoops just showing you how negative figures can be shown as a positive. It is the reason i ignore percentages. I used to be a fan of statistics and how they can be manipulated to suit. I am actually enjoying all the bear members gloating over the monthly figures from halifax and nationwide. I can picture them waiting for the latest figures with bated breath. To be perfectly honest i am getting a little worried about the mental health of a couple of members on here who seem to be obsessed with house prices.0 -
mr.broderick wrote: »Johny let me tell you i don't give 2 hoops just showing you how negative figures can be shown as a positive. It is the reason i ignore percentages. I used to be a fan of statistics and how they can be manipulated to suit. I am actually enjoying all the bear members gloating over the monthly figures from halifax and nationwide. I can picture them waiting for the latest figures with bated breath. To be perfectly honest i am getting a little worried about the mental health of a couple of members on here who seem to be obsessed with house prices.
Fair enough.
Mind you 2235 posts in 22 months seems to indicate you have a little obsession of your own.
Personally I'm off down the pub now :beer:0
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