Nationwide Chief: House prices to fall through 2009 into 2010

WTF?_2

Cannon_Fodder wrote: »

Sometimes the journalists paraphrase...the actual comments seem to come from here...

http://www.nationwide.co.uk/pdf/about_nationwide/halfyearlyaccounts2008.pdf

"Outlook

As a result of the unprecedented turmoil in global financial markets and increases in inflation, we expect that the
UK economy will remain under significant pressure. Economic output has begun to contract in the second half of
2008, and we expect tough conditions to continue for some time to come. It is difficult to know precisely when
conditions will improve materially, but we believe the coordinated
actions of Governments around the world have
helped to lay the foundations for a future sustainable recovery of financial markets.
We expect the housing market to remain subdued, with market prices likely to continue to fall in 2009/10. Rate cuts
will help to minimise payment difficulties and alleviate payment shock as borrowers reach the end of their existing
deals. Reducing prices will improve affordability, which should bring about a recovery in the first time buyers’
market.
In light of this economic background, conditions in Nationwide's main markets will remain challenging for the
foreseeable future. However, the Society has always adopted a prudent and responsible approach to its business,
recognising the possibility of a more adverse economic environment. As a result we are well positioned with a
strong balance sheet that will enable us to support our members during difficult times and take advantage of
opportunities that may arise.

Graham Beale
Chief Executive
7 November 2008"

And if a VI like Nationwide that has consistently under-estimated the scale of the house market fall says that, you know they aren't overstating the case.

Only generalised inflation is going to pull house prices' fat out of the fire any time soon.

Otherwise they need to settle to an affordable level before rising again (hopefully) in a sustainable manner that bears some sensible relation to income. That's gonna be at least another year, maybe two or falls I would say. The quicker they fall, the sooner they can start to recover.

StevieJ

Cannon_Fodder wrote: »

Sometimes the journalists paraphrase...the actual comments seem to come from here...

http://www.nationwide.co.uk/pdf/about_nationwide/halfyearlyaccounts2008.pdf

I take your point but the quotes in question were direct to the press.

'But he added there was hope the market would see a turn around as the price falls and lower interest rates began to help buyers come into the market.'

Cannon_Fodder

more comments...


Nationwide: Mortgage market to fall by 80%

"It is already down to a third of last year's levels and heading lower"

'Wholesale market conditions remain fragile,' said Beale. 'We expect the challenging economic environment in the UK to persist well into 2009.'

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=456831&in_page_id=3&ct=5



Say enough and one thing will be right in the end...?

monkeymaster

!!!!!!? wrote: »

And if a VI like Nationwide that has consistently under-estimated the scale of the house market fall says that, you know they aren't overstating the case.

Only generalised inflation is going to pull house prices' fat out of the fire any time soon.

Otherwise they need to settle to an affordable level before rising again (hopefully) in a sustainable manner that bears some sensible relation to income. That's gonna be at least another year, maybe two or falls I would say. The quicker they fall, the sooner they can start to recover.

!!!!!!? what are your thoughts on the possibilty of some serious inflations bearing in mind any of our jobs can easily be outsourced to India for example?

Agree with you on Nationwide consistantly underestimating and at least 12 months before any sort of recovery.

WTF?_2

monkeymaster wrote: »

!!!!!!? what are your thoughts on the possibilty of some serious inflations bearing in mind any of our jobs can easily be outsourced to India for example?

Agree with you on Nationwide consistantly underestimating and at least 12 months before any sort of recovery.

All it takes is the government issuing uncovered bonds because no-one will buy the ever increasing amounts of debt they plan to take on and the resulting effect of the currency falling off a cliff pushing import prices up sharply (just about everything is imported right now).

Once they start printing money, the temptation will be to print some more to cover things like public sector pay demands and spending projects. So public sector workers will see generous rises and private companies working for the public sector on contract can expect more (freshly printed) revenue with which to pay their workers.

Companies exporting goods will earn vastly more pounds for their exports so can afford to pass on generous pay rises to their workers.

People making stuff in the UK to sell in the UK will want more money for it to keep up with rising prices too (and to stop them exporting it if it's possible for their product) - but the public sector workers and those who work for exporters can probably meet the prices with their new fat pay packets.

Which will leave people with savings seeing them decimated and people relying on them (like pensioners) severely impoverished. Anyone relying on selling imported goods (like most of the high street) will be hard hit too, so massive redundancies.

Since the price of goods will be rising (maybe even by the week), no-one will be saving as they'll be spending money as fast as they can get it - hence the banks capitalisation problems will be even worse. Never mind, fire up the printing presses again...... ad infinitum.

You get the idea.
.

ad9898_3

HammersFan wrote: »

Yep, I agree. Some really fantastically low mortgage rate deals coming over the next few months. That will be the time to buy on a long-term fix under 5% (perhaps quite a long way under that). Happy days

I don't understand, why is it happy days to get a low cost fix rate on something that is going to tank for another 12 months?

I would sooner get a good long term fix in the trough, which normally lasts about 4-6 years, however with economy sinking faster than Browns' jowels, it could be longer this time.

mewbie_2

Right you lot, time for some bear stuff. Even !!!!!! is talking about fall and then recover. I don't read it like that. I read it as fall, to sensible level. And stay there.

We are coming down from a huge bubble. An artifical bubble of nonsensical over priced housing stock. The fall has no reason to suddenly bounce back up into stupid mode. So the 'recover' element is a red herring.

House prices are recovering at present. They are recovering back to more normal levels, still a long way to go.

If you accept we have been in a bubble, as I think most people with half a brain cell do, then you need to understand that bubbles do not reinflate. They do not 'recover' their overpriced insanity.

Think tulips, South Sea, dot com, vintage cars, whisky barrels and ostriches. And please - don't bother with what goes down will eventually go back up. It will not necessarily be in your lifetimes.

ed: what happened to the M&W jokes Mewbie.. you're fired.

ad9898_3

Taken from HPC website, take your pick, is it 1,2 or 3 ?, some people on the forum, with a serious recession in our midst and banks who have just been badly burnt, think that its going to be 3. No matter how I look at it, I just can't see that.

Dan:_4

LOL - Those lonnies make us look sane!

If I was a gambling man, I would back graph 1

StevieJ

ad9898 wrote: »

Taken from HPC website, take your pick, is it 1,2 or 3 ?, some people on the forum, with a serious recession in our midst and banks who have just been badly burnt, think that its going to be 3. No matter how I look at it, I just can't see that.

How can you say that some people think it will be 3 when it has already dropped by more than that dip shown, BTW I wonder why the scale starts at 50k :rolleyes:.