Prices to bounce back ... in 2023

carolt

http://www.guardian.co.uk/money/2008/oct/15/property-housing-market


The average price of a house in the UK will not return to its 2007 peak until 2023, a leading academic said yesterday.

Andrew Clare, professor of asset management at Cass business school in London, said the housing market would get "a lot worse" before it started to pick up.

Using futures contracts based on the Halifax house price index, he has calculated that, in 2010, the average will be 40% lower than the peak of £199,600 in August last year - about £120,000. "Worse still, according to these prices, the Halifax index will not recover its August 2007 level until 2023," he said.

Clare said his survey was "very bad news" for anyone who bought a house last summer and predicted negative equity would be a big feature of "our economic landscape for years to come". However, he also sees greater affordability, with the ratio of average house prices to average earnings declining as property prices fall, assuming that earnings rise at an average nominal rate of 5% a year.

"By 2010 the price-to-earnings ratio would be much closer to a sustainable level - very close to the old-style mortgage multiples that lenders used," he said.

Halifax said last week that the average price of a house fell 13.3% in the year to September - the biggest drop since records were first kept 25 years ago.

skap7309

Wow, thats a long way off. No rush to reach my target deposit then lol.

Chris2685

I'm sure that study was very scientific in its method of calculation, however I'm also sure someone else can use an equally scientific method to find that prices will bounce back in 2009.

The real answer is that no one knows when prices will 'bounce' back, all we can do is watch and wait. There is too much human emotion involved for this type of study to ever be based 100% on science.

stevetodd

Thanks Carol that was really funny, 2023 what a fool! I think it he will find it hard for people to take him seriously for a while after saying that

Lotus-eater

Chris2685 wrote: »

I'm sure that study was very scientific in its method of calculation, however I'm also sure someone else can use an equally scientific method to find that prices will bounce back in 2009.

The real answer is that no one knows when prices will 'bounce' back, all we can do is watch and wait. There is too much human emotion involved for this type of study to ever be based 100% on science.

:rotfl:

Exactly!

They might not ever be another peak and crash, who knows. There probably will, just as soon as we have forgotten this one. I guess prices will be back to peak by 2015 and you can quote me on that in 2015.

stevetodd

Lotus-eater wrote: »

:rotfl:

Exactly!

They might not ever be another peak and crash, who knows. There probably will, just as soon as we have forgotten this one. I guess prices will be back to peak by 2015 and you can quote me on that in 2015.

Yeah I would go along with that too 2015 sounds about right to me

amcluesent

>a leading academic<

Hmm, isn't that a polite way of saying he knows everything about nothing?

I wonder if he'll give up his tenured position and final-salary pension scheme to take a punt with his own money that his predications are correct? Noooooo....

Lotus-eater

amcluesent wrote: »

>a leading academic<

Hmm, isn't that a polite way of saying he knows everything about nothing?

No, that's an MSE'r

carolt

It's based on futures contracts, which is at least people who put their money where their mouth is.

I think the point of the article isn't really to pinpoint 2023 as the point to 'get in there', so much as pointing out that it will be a VERY LONG TIME before prices recover.

So anyone waiting for prices to recover before selling, might like to consider whether they really fancy staying put for another 15 years..... whilst prices continue falling.

Just a thought.

Lotus-eater

carolt wrote: »

It's based on futures contracts, which is at least people who put their money where their mouth is.

I think the point of the article isn't really to pinpoint 2023 as the point to 'get in there', so much as pointing out that it will be a VERY LONG TIME before prices recover.

So anyone waiting for prices to recover before selling, might like to consider whether they really fancy staying put for another 15 years..... whilst prices continue falling.

Just a thought.

Prices aren't going to continue to fall for another 15 years, get real.
Another 2 or 3 maybe.

stevetodd

carolt wrote: »

It's based on futures contracts, which is at least people who put their money where their mouth is.

I think the point of the article isn't really to pinpoint 2023 as the point to 'get in there', so much as pointing out that it will be a VERY LONG TIME before prices recover.

So anyone waiting for prices to recover before selling, might like to consider whether they really fancy staying put for another 15 years..... whilst prices continue falling.

Just a thought.

Reminds me of the phrase 'Based on a true story' lol if you want to look at some real figures that you can bet on now i.e. not 'based on' but actual look at the spread betting markets for house prices, they are indicating in the region of a further 22% fall (from now) and a levelling out in 2-3 years time