House prices - "five years to recover"

Arch-Angel

A slightly old link (and I couldn't find a previous link to this on MSE), but interesting nonetheless:

http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=494666&in_page_id=57

House prices will fall by up to 10% next year and won't return to their peak of two years ago until 2014, according to a wide round-up of economists' views.

A backdrop of rising unemployment and home loan rationing by the banks is behind the gloomy forecast from a survey of 14 major economists and estate agent groups. The average estimate suggests it will take five years for the market to recover. One group, Capital Economics, claimed it could take until 2019, while others said it would be any time between 2012 and 2016.

There's a range of estimates in here - some of those surveyed believe that a 4-10% rise will happen. It would also be nice to find the original report (my initial Google search just found other sites reporting on the same story).


The message seems to be "house prices will recover, but it's not business as usual just yet" - my opinion counts for little, but this does feel like the best indicator of where prices are going.

Mr.Brown_4

I think, but can't be bothered to check, that in the 90's crash they took longer than five years to recover. Given we are in a worse economic mess, with a larger house price bubble maybe five years is a tad optimistic.

2010

Most,if not all,of these predictions are merely guesses.

I can remember when the stock market peaked ten years ago at 7000,there were various "predictions" about when it would recover to that level.
Well,it ain`t happened yet.

Can`t see why house prices should ever "recover" to the peak of August 2007 either.
Prices were inflated by every tom,!!!!!! and harry with their sticky fingers in the property pie,thus creating a bubble which finally burst.
So why should they go back to unattainable, bubble levels.

stueyhants

Longer term the price of houses will go up and surpase the 2007 level. There is plenty of historical evidence to support this. What is not clear is what 'long term' means. My own view is that prices will fall slighlty or stagnate for the next 5+ years, but there will be another boom following that. The population has a short memory and we will engineer another unstainable boom somehow !

budgetflyer

Edinburgh showed an **17.9%** increase from NOV 08 to NOV 09

http://www.espc.co.uk/ESPC+News+20091204.html

HammerSmashedFace

TBH I think they will have recovered long before then on the back of money printing and low IR's, I also believe they will be on their way to crashing again long before then as well, as we start to pay for the current short-sightedness.

90,000+ approvals per month, at inflation adjusted 2007 prices will not be seen again.

michaels

My street, new build, 295 Apr 2007, 330 Nov 2009...

Mr.Brown_4

michaels wrote: »

My street, new build, 295 Apr 2007, 330 Nov 2009...

With stamp duty, agents fees in and out they should be about breakeven if they sell at that price. Not bad going.

Of course not all areas will be this 'good'.

chucky

Mr.Brown wrote: »

With stamp duty, agents fees in and out they should be about breakeven if they sell at that price. Not bad going.

Of course not all areas will be this 'good'.

very true - but people tend not to buy and sell their house every 18 months. why do they want to sell? do you know them?

but back in the real world most places will have gone up in value... :rolleyes:

2010

If you bought a house in 1988 at £95,000 and since then there`s been two slumps,taking into inflation,what would it be worth now.

When I bought a house I always thought of it as somewhere to live and not to speculate on.
Maybe I`m wrong but I look on my house as a home and not an asset (although it turned out that way).
Prices can go up,down or sideways,doesn`t matter to me wether "I`ve made money" or not.
I NEED somewhere to live.

nollag2006

Hmmm.. given that much of the article is dated, and given over to the jokers at Capital Economics I don't think it is entirely credible

Some great news for FTBs (and the rest of the market) here though:
http://news.bbc.co.uk/1/hi/uk/8438179.stm