IMF forecasts long housing slump

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Interesting article in The Gaurdian, the IMF thinks there is a long way to go. Our housing bubble was bigger than America's and their prices have been falling since 2006 and are continuing to do so. I still find it amazing that property VI's in the media are still pedaling that we have reached the 'floor' in prices at this point in the recession, with unemployment and GDP rising and falling respectively, at their fastest rates in history.

Britain's homeowners must brace themselves for a prolonged slump in the housing market, according to the International Monetary Fund, which delivered a grim assessment of the UK economy this weekend, in stark contrast to Alistair Darling's prognosis.
While the chancellor insisted in last week's budget that he expected to see green shoots before the year is out, the Washington-based lender believes the housing crash is far from over, with property still over-valued.

House prices have already fallen by around 20% in the UK; but despite the rising optimism of Britain's estate agents, the IMF said the housing downturn in the UK, and equally damaging crashes in Ireland and Spain, probably have "a considerable distance left to run".
Its experts pointed out that the boom in the UK was bigger than the bubble in America. House prices in the US have been falling since 2006, but the pace of decline is still increasing.

With the catastrophic loss of wealth from falling house prices weighing on people's confidence, the IMF expects recession in the UK to continue well into 2010. Britain is also dogged by higher inflation than in any other major economy, at 1.5% this year.

http://www.guardian.co.uk/business/2009/apr/26/housing-slump-imf

StevieJ

IMF = Font of all knowledge

Britain is also dogged by higher inflation than in any other major economy, at 1.5% this year.:rotfl:

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StevieJ wrote: »

IMF = Font of all knowledge

I was waiting for that comment:D, however no one else's forecasting is any better, so in my opinion, the IMF are no worse. At least they try to make forecasts based on facts, where as the VI media, know they are lying, but can just about twist the truth enough for them to sound plausible.

StevieJ

You say IMF has no VI, I am starting to wonder about that.

torontoboy45

StevieJ wrote: »

IMF = Font of all knowledge

Britain is also dogged by higher inflation than in any other major economy, at 1.5% this year.:rotfl:[/QUOTE
so who do we believe?
the imf may well be a font of misery but it declared the UK's housing market as 40% overvalued at the beginning of 07.
or maybe we shoud hang on to the coat-tails of broon/darling/d.mail/VI desperados.

Generali

StevieJ wrote: »

You say IMF has no VI, I am starting to wonder about that.

Where's the vested interest do you think? They're in an interesting position right now IMO as a year or so ago they were looking pretty much irrelevant. IIRC there was an article in The Economist to that effect.

Pobby

Sounds about right to me. After so much HPI, it stands to reason that we will experience a prolonged period of drops/ stagnation. In the 90`s, house prices took a while to bottom out and then it was a number of years before they started to increase. Imho, this last period of house price growth far exceeds the 80s/ 90s experience.

StevieJ

Generali wrote: »

Where's the vested interest do you think? They're in an interesting position right now IMO as a year or so ago they were looking pretty much irrelevant. IIRC there was an article in The Economist to that effect.

I don't know, maybe it is simply a case of them trying to raise their profile and return to former glories, this may in itself encourage them to be contoversial.

But Johnson worries that the budget and staff cuts imposed on the IMF last year, which have not been restored, may hamper its ability to quickly implement programs to fight the crisis.

Generali

StevieJ wrote: »

I don't know, maybe it is simply a case of them trying to raise their profile and return to former glories, this may in itself encourage them to be contoversial.

But Johnson worries that the budget and staff cuts imposed on the IMF last year, which have not been restored, may hamper its ability to quickly implement programs to fight the crisis.

Perfectly true. Lots of bureaucracies seem to exist to perpetuate themselves and serve the interests of the bureaucrats as much as anything else. I've seen that a lot in banks for example.

Graham_Devon

StevieJ wrote: »

IMF = Font of all knowledge

Britain is also dogged by higher inflation than in any other major economy, at 1.5% this year.:rotfl:

The IMF's predictions have so far, been wrong. Predicting a worse outlook to the economy in general than some other establishments.

They have been wrong because they have not predicted bad enough, on the reports that I have seen. So there may be reports where they have predicted something and it hasn't ended up as bad since the start of all this, I have just simply not seen it.

For instance, growth predictions were wrong, but more stark than other establishments and it still went further.

So, I'm going to look at this report as a general concensus of the direction we are looking at, but not using it as an actual prediction tool.

Like I say, so far, they have been right just haven't gone far enough. So I shall take that outlook on this forecast. What others do, is up to them, but just saying it's worthless like some will, is....worthless!

The only thing the IMF cannot forecast is an erratic government and what they may do next.

luvpump

StevieJ wrote: »

IMF = Font of all knowledge

Britain is also dogged by higher inflation than in any other major economy, at 1.5% this year.:rotfl:

The IMF have been consistently more accurate in there Analysis of the u.k situation than most other commentators, & quite obviously better than Darling or Crash Gordon...the bottom line is the u.k Economy is Shafted & so is your Housing Market