Some facts for a change, instead of speculation......

silvercar

Godwin's Law.

http://en.wikipedia.org/wiki/Godwin's_law

lemonjelly

HAMISH_MCTAVISH wrote: »

Some rather interesting facts.....

The Supply of new properties was down 18% on the same month last year and at 105,000 is well down on the six year average of 168,000. This undersupply is what is propping up prices. New instructions are coming onto the market at 3,505 a day.

I think this is the most telling part. You're saying here that prices are being propped up, rather than being at their real value. If supply were to return to the market, or demand fell, by the above comment I assume you'd agree that prices would fall?

Back to my original point though, I find it interesting that you agree prices are being propped up.

ruggedtoast

Hamish has achieved one thing that is useful. I have realised that I really dont care enough about forecasting house prices to argue with him.

I can imagine him sitting in his bunker: "House prices are going up - yes they are - Nationwide say so, and Halifax, its all about demand - there is no recession - The Red Army are still miles awaaaaaay!"

HAMISH_MCTAVISH

lemonjelly wrote: »

IIf supply were to return to the market, or demand fell, by the above comment I assume you'd agree that prices would fall?

The fundamental market issue in setting prices is supply and demand.

I would obviously agree that if the supply of new homes increased significantly and demand reduced then prices would fall.

I've been saying this for a long time.... If you want cheaper houses, build more of them.

Back to my original point though, I find it interesting that you agree prices are being propped up.

Well obviously low interest rates and government mortgage interest payments for the unemployed reduce the number of forced sellers, which reduces the number of properties coming to market. Banks have clearly also learned the lesson from previous recessions that mass reposessions are self defeating for their purposes, leading to further price falls, deeper recession, and more reposessions. Those factors could certainly be interpreted as "propping up" prices.

However the wider issues around population growth, household formation growth, the 40% decline in houses available for sale even from normal times, mostly due IMO to people being on better mortgage deals than can be had in the foreseeable future if they move, combined with a long term shortage of house building compared to the levels needed to meet household formation..... Those are structural issues within the market that pretty much guarantee HPI over the medium to long term regardless of short term "propping up".

Graham_Devon

Supply and demand must be the new buzz word.

In the last 2 months, it seems thats all that's talked about as if it's the be all and end all.

It's as if we suddenly have had 5 million people enter the country in the last year all needing a house.

yet when you ask "if it's all about supply and demand, why did house prices decline in the last year", you never get an answer. Apart from maybe a "America's fault".

The fact is, just because less people are selling, that does NOT increase demand. Demand is made up of people looking to buy, and also people looking to buy because they have sold. As less people sell, demand falls.

Hamish, serious question. Would you really like to have a thread where we can discuss this supply and demand as its own entity, rather than just stating it everywhere and saying that because there are less sellers, demand goes up?

skap7309

HAMISH_MCTAVISH wrote: »

Some rather interesting facts....

I agree with you - i doubt anyone doesn't.

The fact is Hamish, once people decide they want to move on and sell after putting it off during the recession, then supply will be huge as a glut of properties enter the market - it is already slowly beginning to happen.

Think of it as a massive two year stock pile about to be put up for sale.

Really2

Graham_Devon wrote: »

Supply and demand must be the new buzz word.

In the last 2 months, it seems thats all that's talked about as if it's the be all and end all.


Yet when you ask "if it's all about supply and demand, why did house prices decline in the last year", you never get an answer. Apart from maybe a "America's fault".

To be fair I talked about it last year (and many others did) that the amount of houses for sale (supply) was outstripping buyers (demand)

I expected for supply to increase this year and it did not.

Every market is controlled/priced buy supply and demand. Why do you think houses are any different?
If gold was not in demand do you think it would have gone up in price recently?

2nd point
Has for why they fell since 07 Graham. People saw prices fall on a predicted crash and got greedy and all tried to cash out at the same time.
This lead to an excess of property's in a market still expected to decline. Add to that constricted lending to those who still wanted to buy where else was the market going to go.

Supply out striped demand in late 07 - 08
Too quote yourself...
Simples.

HAMISH_MCTAVISH

Graham_Devon wrote: »

yet when you ask "if it's all about supply and demand, why did house prices decline in the last year", you never get an answer. Apart from maybe a "America's fault".
?

No Graham, you've had the answer on numerous occasions.

If you suddenly and artificially withdraw almost all the mortgage funding from a market because the lending sysem freezes up, then price falls are inevitable.

Now that lending is recovering, prices are rising.

It is no coincidence that prices have risen in tandem with the availability of lending for new purchase all year.

maveli

The Supply of new properties was down 18% on the same month last year and at 105,000 is well down on the six year average of 168,000. This undersupply is what is propping up prices. New instructions are coming onto the market at 3,505 a day.

The number of homes selling however is up a third at 2,700 a day up on last year. In September 2006 there were 5,000 selling every day.

supply is low and sales are going up. how is that possible

where are all these guys selling their home going ? Emmigrating or sleeping rough ?

Graham_Devon

HAMISH_MCTAVISH wrote: »

No Graham, you've had the answer on numerous occasions.

If you suddenly and artificially withdraw almost all the mortgage funding from a market because the lending sysem freezes up, then price falls are inevitable.

Now that lending is recovering, prices are rising.

It is no coincidence that prices have risen in tandem with the availability of lending for new purchase all year.

I appriciate how you edited all the supply and demand stuff out.

As you know, your pedalling "facts" that are fundamentally wrong.