Savills - No recovery for 8 years

ad44downey

It's a bit ambiguous but in the context of a house price crash (that we're now in) I think

recover = stop falling

justpurchased

fatpig wrote: »

Errr...no. I think you've misread the article. It means that they won't stop falling for another 4 years, and 8 years for NI and NE

I did not mate you misread. it says it does not expect fall to stop untill next year. Recovery would be classed to previous price.
Do you class your car as recovered when it is still roling down a hill broken or when it as stoped and the AA as got it started?
Read itdont just look at the title

Jumping_Bean

justpurchased wrote: »

So prices recovered in 4 years Unless you are in the NE and NI.
If you look at the + side it looks like prices will start increase in arround a years time. So a slow increase in prices from there on. So 20-30% recovery over 3 years, depending on how low prices drop.

I think that's so unlikely it's untrue. Prices to be back to what they were in 4 years time? It's just not going to happen. IMO 8 years is more realistic but still very unlikely. The last cash took around 6 years from peak to trough and then ages to recover. We've only had one year of falls so far.

I think what's interesting is that it's an estate agent saying this, so you should probably double or triple it to get to what they really think is likely.

justpurchased

ad44downey wrote: »

It's a bit ambiguous but in the context of a house price crash (that we're now in) I think

recover = stop falling

No recover is to previous state.
A boxer as not recovered on the canvas. He is recovered when he stands up and is passed fit to fight again.
If a boxer as not recovered in 10 seconds he is out! is it not?
Its just a Title to fule price drops.

justpurchased

Jumping_Bean wrote: »

I think that's so unlikely it's untrue. Prices to be back to what they were in 4 years time? It's just not going to happen. IMO 8 years is more realistic but still very unlikely. The last cash took around 6 years from peak to trough and then ages to recover. We've only had one year of falls so far.

Surely a long slow fall lastime equalled a long slow recovery.
Why would a fast fall not be backed by a fast recovery. you cant go on the past it is future factors that will count and sorry no one knows so its best left to se what happens.
No one knows

harbinger13

justpurchased wrote: »

Why would a fast fall not be backed by a fast recovery.

As you rightly says No One Knows.

But I guess it is a little difficult for fast recovery - after a (if it happens) fast fall. Bulls gather speed over time - bears dive instantly. This is my experience.

Gravity helps while falling - but opposes while climbing - Coyote in RoadRunner show.

justpurchased

harbinger13 wrote: »

As you rightly says No One Knows.

But I guess it is a little difficult for fast recovery - after a (if it happens) fast fall. Bulls gather speed over time - bears dive instantly. This is my experience.

Gravity helps while falling - but opposes while climbing - Coyote in RoadRunner show.

I would not bet past 30% but then I am happy where I am and have a home not an investment i am looking to sell soon.
A lot of people hoping for massive drops are wishfull thinkers if we get the 50%+ like they want the company is bust and we are all on the dole!

GDB2222

It's better to look at Savills website to find out what THEY actually said (rather than what the Mail thought they said):

19 August 2008

The End Of The Tunnel Is Nearer In The South

The number of transactions in the housing market is half last year's levels and the number of housing starts is likely to fall even further. Supply could therefore become constrained in many markets over the coming months. This means that when the market does bottom out, it may be difficult for investors to make acquisitions. For anyone looking to invest, knowing which regions of the country are likely to recover first and fastest is essential to avoid being timed out by a rising market.

Savills Research has forecast not only the duration and size of the market downturn but also the shape and timing of recovery. Their recovery map forecasts the year in which values will have returned to 2007 levels by UK Government region. It also shows the size of the subsequent house price growth that might be expected by 2020 by recording falls and subsequent rises.
Savills recovery map suggests that London and the South-East will lead the recovery and will quickly return to former levels, by 2012 whilst, in the North-East and Northern Ireland for example, any upturn will occur later and full recovery is unlikely until 2016.
Yolande Barnes, head of Savills residential research explains, "This property market downturn has affected virtually all property sectors and UK regions simultaneously but regions will vary far more when the upturn comes.
"The lack of turnover and new supply which is such a feature of this downturn will be likely to lead to sharp increases in value in high-demand, low supply areas. Competition amongst homeowners will once again lead to rising prices, particularly in those areas with higher levels of housing market equity and stronger household purchasing power such as London, the South East and Scotland".
Key findings include:

• London and the South East will lead the recovery so that, by 2012, values will have recovered to those pre-slump.
• Between 2008 and 2020 average growth in the South East will be +79%.
• Scotland will also have recovered by 2012 with growth between 2008 and 2020 averaging +47%.
• On the downside, Northern Ireland and the North East are forecast not to have recovered until 2016 with average growth between 2008 and 2020 of +33% and +19% respectively.

Barnes again, "This downturn is severe and will almost certainly last for at least another year. But it is has been caused by the withdrawal of credit, not the withdrawal of long-term demand or by diminished purchasing power amongst owner occupiers. It is this that will shape the recovery when it comes. Although the credit crisis has affected all sectors and regions more or less equally and simultaneously, we will see a very different pattern in the recovery. Canny investors will take this into account now".

Generali

I can see no good reason for house prices ever to be at the same real level as they are now in Northern Ireland unless the economy improves substantially. Not urban regeneration schemes but an actual economy based on people selling things.

This isn't Generali having a pop at Northern Ireland just an observation of the economy there. I'd like the NI economy to improve as then my taxes could fall or at least a little more of them might be spent on me.

dopester

Barnes again, "This downturn is severe and will almost certainly last for at least another year. But it is has been caused by the withdrawal of credit, not the withdrawal of long-term demand or by diminished purchasing power amongst owner occupiers.

The withdrawal of credit. Slightly important no? Savills aren't a bank.

Demand doesn't matter if the credit isn't there to satisfy it by giving credit to FTB to buy at these levels, and there is a long way down to go. The credit crunch has barely started to squeeze yet.

Savills might bang the drum about "consumer psychology", but what matters is consumer liquidity - and so many are tapped out, living in debt, and with little by way of savings, and a country full of over-valued property.

There is a heavy recession/depression coming, and probably political instability as well in the coming deflationary economic shock. And a lot of those owner-occupiers will see the value of their houses fall anyway and lets hope their own working income isn't badly affected for diminished purchasing power. Everything is connected to everything else.

Trillions in malinvestments at the expense of excess debt don't get "wished away". No recovery can come in to play until the excess debt is deflated/eliminated.

The entire system has reached a debt ceiling, financial institutions wobbling (you really think they'll go back to easy money x8 immediately if they survive?).