House prices will FALL by up to 10% in 2010, top economists warn

Mr.Brown_4

julieq wrote: »

Mewbie had it right this time last year, a prophet crying in the wilderness. And to think we thought it was irony

http://forums.moneysavingexpert.com/showpost.html?p=16931313&postcount=26

What an excellent prediction. I didn't read any irony in it, reading his back catalogue (I have to say that..) he did seem to make occasional genuine posts. Admittedly, it's sometimes difficult to tell.

I wonder if he put his money where his large mouth was and bet on a stock market increase? Let's hope so, it will make up (slightly) for being cut off in his prime.

Emy1501

HAMISH_MCTAVISH wrote: »

You are making lots of things up, like what I said, for starters.



It is always all about supply and demand. There is nothing else.

We know the supply side is short. But you fail to see that other things, such as the availability of finance, unemployment, etc, can impact demand.

The house building versus population growth and household formation stats establish the clear NEED for additional housing to be built.

The mentality of British people to own their own house, the levels of employment, or job security, etc, establish the DESIRE of people to buy.

And the levels of mortgage availability and cost of borrowing, enable that NEED and DESIRE to be translated into effective DEMAND.




Actually, I repeatedly say that prices may well fluctuate in the very short term. WHilst I think prices will rise overall next year, based on supply shortages and need for more housing, I do not rule out small falls as being inconceivable, as it is possible further financial shocks may impact demand. It's just unlikely.

IF, and it's a big IF, we see mortgage lending reduce over the next year, which would limit demand, then prices could well fall. But they will not fall for any other reason.

Over the mid term to long term, very significant price rises are inevitable however, unless we build a lot more houses than we do today.

Suppy and demand is determined by the ability to get credit and service debt in my opinion. We saw that in 2008 and would have seen the same in 2009 if the government had not plugged the hole with QE and the various schemes ie SMI, banks not being allowed to repossess etc. Therefore your example about if 1 house only was for sale does not make sense unless you believe that the government has another 250b in its back pocket if the economy fails again or you believe that the economy as no bearing on forced sellers etc.

The fact that RICS use an economist for its yearly forecast must surely tell you something? The surveyors get the supply and demand figures from EA's anyway. These figures are great for determining where the market is going over the next couple of months but not for the next year thats why RICS monthly reports tend to only give opinions for the following 3 months.