Will we have any HPI from 2007-2017 ?

ad9898_3

Interested to get people's views on this, in the last crash in my area we had approx 7% HPI from Aug 88 to Oct 98. Now last time all the economic factors from '92 onwards were getting better, this time they are projected to get much worse (IR's, debt, unemployment, taxes etc..)

So what are peoples views ?

wolvoman

ad9898 wrote: »

Interested to get people's views on this, in the last crash in my area we had approx 7% HPI from Aug 88 to Oct 98. Now last time all the economic factors from '92 onwards were getting better, this time they are projected to get much worse (IR's, debt, unemployment, taxes etc..)

So what are peoples views ?

If you're comparing 1988-1998 with 2007-2017 then when you refer to '92 you are really talking about 2011 in the current scenario.

I suspect that come 2011, interest rates will have reached the top of their curve, unemployment will have peaked or be peaking. Taxes though, may well still be rising (hopefully on VAT and not on income tax though).

Anyhow back to your question, I think nominal prices will trough in early-2010 about 5% below current. Then they'll be flat for a year or so. From mid-2011 I see them rising at about 6-7% and passing the 2007 peak in 2015.

I don't think IRs will get much above 4% in the next few years.

kennyboy66_2

ad9898 wrote: »

Interested to get people's views on this, in the last crash in my area we had approx 7% HPI from Aug 88 to Oct 98. Now last time all the economic factors from '92 onwards were getting better, this time they are projected to get much worse (IR's, debt, unemployment, taxes etc..)

So what are peoples views ?

This housing crash will be pretty similar to the last house price crash in real terms.
Perhaps a little worse.

In nominal terms this crash will be worse.

HPI will start again somewhere between 2016 & 2018.


Plus ça change, plus c'est la même chose

ad9898_3

wolvoman wrote: »

If you're comparing 1988-1998 with 2007-2017 then when you refer to '92 you are really talking about 2011 in the current scenario.

I suspect that come 2011, interest rates will have reached the top of their curve, unemployment will have peaked or be peaking. Taxes though, may well still be rising (hopefully on VAT and not on income tax though).

Anyhow back to your question, I think nominal prices will trough in early-2010 about 5% below current. Then they'll be flat for a year or so. From mid-2011 I see them rising at about 6-7% and passing the 2007 peak in 2015.

I don't think IRs will get much above 4% in the next few years.

I wasn't particularly comparing what happened within the decade of '88-'98, with now, just the beginning and the end. So you think we will get 6-7% per year from 2011, wow I'm shocked, but of course your entitled to your opinion.

Just to edit, I'm interested where you think the money will come from, from 2011 onwards, I was under the impression that the RMBS market help fuel the HPI, also what about wages, how can 6-7% per year be sustained.

kennyboy66_2

wolvoman wrote: »

From mid-2011 I see them rising at about 6-7% and passing the 2007 peak in 2015.

I don't think IRs will get much above 4% in the next few years.

These appear to be mutually exclusive statements.

Thrugelmir

wolvoman wrote: »

I don't think IRs will get much above 4% in the next few years.

Over 5 year fixed rate term mortgages are already above 7%.

So the market is pricing itself without BOE intervention.....

purch

Will we have any HPI from 2007-2017 ?

Unlikely.

Not in real terms anyway.

Graham_Devon

ad9898 wrote: »

Interested to get people's views on this, in the last crash in my area we had approx 7% HPI from Aug 88 to Oct 98. Now last time all the economic factors from '92 onwards were getting better, this time they are projected to get much worse (IR's, debt, unemployment, taxes etc..)

So what are peoples views ?

My view is it's far too hard to call.

I never knew about politics back then. But politics now, from what I hear, compared to the decade you mention has got extremely competative internally. I.e. not for the good of the people / country, but for the good of the party.

I feel politics will have a much bigger impact on this crash than the one you refer to, and for that reason, it's far to hard to call.

As a guesstimate, in 2017 I feel we may be close to 2004-5 prices again.

This is only based on the fact that the current, and I believe the next government will do pretty much anything to gain parliament points. And the fact we don't have enough houses for the amount of people. With more people turning to benefits to pay for their roof, I feel those left paying for the roof over their heads will have to pay a higher price due to those not paying.

This has happened in other areas, such as bus fares going up for those paying, to cater for those not paying. Council tax increase to pay for the bus services, for those not paying etc. I don't see why it won't apply to housing when more and more turn to the government to home them and the supply of private property dwindles. The more who fall off the cart, the more who fall onto the benefits cart, where interest rates dont matter. A lot of the current stock of houses like mine, will be used to house benefit claimants, pushing those paying into "better" properties, but paying the price of that.

Bit bullish for me, but I do believe we will make all the same mistakes again, simply because of government intervention.

Thrugelmir

Graham_Devon wrote: »

My view is it's far too hard to call.

I never knew about politics back then. But politics now, from what I hear, compared to the decade you mention has got extremely competative internally. I.e. not for the good of the people / country, but for the good of the party.

I feel politics will have a much bigger impact on this crash than the one you refer to, and for that reason, it's far to hard to call.

As a guesstimate, in 2017 I feel we may be close to 2004-5 prices again.

This is only based on the fact that the current, and I believe the next government will do pretty much anything to gain parliament points. And the fact we don't have enough houses for the amount of people. With more people turning to benefits to pay for their roof, I feel those left paying for the roof over their heads will have to pay a higher price due to those not paying.

This has happened in other areas, such as bus fares going up for those paying, to cater for those not paying. Council tax increase to pay for the bus services, for those not paying etc. I don't see why it won't apply to housing when more and more turn to the government to home them and the supply of private property dwindles. The more who fall off the cart, the more who fall onto the benefits cart, where interest rates dont matter. A lot of the current stock of houses like mine, will be used to house benefit claimants, pushing those paying into "better" properties, but paying the price of that.

Bit bullish for me, but I do believe we will make all the same mistakes again, simply because of government intervention.

We are currently at 2004 levels so do you expect prices to be around the same level.

chucknorris

I am expecting something like this:

1. Spring 2010 prices bottom out about 10% lower than now.
2. Stagnation until about spring 2013.
3. HPI back in 2013 but only at around 5%
4. Prices get back to 2007 levels (that's not in real terms ie not incl. inflation) by about 2017

But obviously a year might slip or be gained somewhere in the above.

In real terms (incl. inflation) I think it's quite likely that we might never reach 2007 levels again, at least not for a very long time anyway.

Graham_Devon

Thrugelmir wrote: »

We are currently at 2004 levels so do you expect prices to be around the same level.

Same level in 2017 yes.

But fall a lot between now and then.

Just a guesstimate though, who knows!