"The Recession" is Still On Track - House prices to fall

Radiantsoul

Really2 wrote: »

Not here either the recovery will actually be stagnation/ marginal growth for two years, enough to get us out of recession but no real growth.

Rates will remain low but that is because of the slow growth.

TBH I can't remember anyone saying we are going to come out with strong growth.

So you can knock me off that list also .:)

You beat me to it !

Emy1501

Really2 wrote: »

Not here either the recovery will actually be stagnation/ marginal growth for two years, enough to get us out of recession but no real growth.

Rates will remain low but that is because of the slow growth.

TBH I can't remember anyone saying we are going to come out with strong growth.

So you can knock me off that list also .:)

As far as I'm aware Labour are predicting growth of about 3.5% for 2011. I'm sure a few on here will be with them on that

Really2

Emy1501 wrote: »

As far as I'm aware Labour are predicting growth of about 3.5% for 2011. I'm sure a few on here will be with them on that

It is easy to do way off predictions when you wont be in power by then.

Sir_Humphrey

Really2 wrote: »

Not here either the recovery will actually be stagnation/ marginal growth for two years, enough to get us out of recession but no real growth.

Rates will remain low but that is because of the slow growth.

TBH I can't remember anyone saying we are going to come out with strong growth.

So you can knock me off that list also .:)

If growth remains low, then the demand for houses will not increase much.

Bulls have to demonstrate how prices will be maintained once the number of properties on the market increases to normal levels, and demand remains low. How long do people think that current low level of houses for sale will continue? If demand were to increase with the permanently lower funding availability, what would happen to mortgage spreads?

And prices are flat as a pancake where I am looking.

chucky

Emy1501 wrote: »

I'm sure a few on here will be with them on that

who are they then?

Radiantsoul

Emy1501 wrote: »

As far as I'm aware Labour are predicting growth of about 3.5% for 2011. I'm sure a few on here will be with them on that

That is not far above the long term average(around 3%), and it sounds reasonable. That will not make much of dent in an output gap that I estimate above is about 10% of GDP and is likely to be 12% by the end of 2010.

nembot

chucky wrote: »

very true - but you forgot to say that many bears do exactly the same.
just because it fits your viewpoint and you'd like it to happen, it doesn't mean that it will happen or is even realistic.


i'm not saying you're wrong but that isn't for me.

if the falls of banks, the world stock markets and all the other economic devastation that happened only took 15%-20% off house prices - it's going to need something of a much larger magnitude to take your 15% of Feb or April 2009 lows.

Yes and at this point the catalyst for further drops is nothing more than time alone

Sir_Humphrey

chucky wrote: »

if the falls of banks, the world stock markets and all the other economic devastation that happened only took 15%-20% off house prices - it's going to need something of a much larger magnitude to take your 15% of Feb or April 2009 lows.

The flip side is that the loosest monetary policy in the history of the UK has only kept the housing market on life support in most of the country.

EDIT: If growth ended up being 3.5% in 2010, there is no doubt at all that IRs will be raised by several points.

Radiantsoul

Sir_Humphrey wrote: »

If growth remains low, then the demand for houses will not increase much.

Bulls have to demonstrate how prices will be maintained once the number of properties on the market increases to normal levels, and demand remains low. How long do people think that current low level of houses for sale will continue? If demand were to increase with the permanently lower funding availability, what would happen to mortgage spreads?

I am guessing that most people who sell their house will look to buy one, so an increase in supply will increase demand. I am sure a lot of "missing" first time buyers have been saving pretty hard. Anecdotally that seems to be the case.

chucky

Sir_Humphrey wrote: »

The flip side is that the loosest monetary policy in the history of the UK has only kept the housing market on life support in most of the country.

you'd have to be naive to think that QE was put into place just to support the house market - it implemented to avoid a depression type scenario in the economy.