Blanchflower: House price rises reflect unreliable property data

bernard_shaw

http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=377455&Page=1

Last year’s house price rises are unbelievable and point to the fact that property data is unreliable, according to Danny Blanchflower, former member of the Bank of England’s monetary policy committee (MPC).

Blanchflower, an arch critic of Bank governor Mervyn King since leaving the MPC last year, warned there was more pain to come for the housing market.
He said: ‘House prices have risen by about 6%, thanks to the weak pound which has made house prices attractive for euro holders.

‘But the markets are thinly-traded, and that’s pushed up prices, so I don’t believe the data and I think prices will fall a lot.’

tomterm8

bernard_shaw wrote: »

http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=377455&Page=1

With respect to Mr Blanchflower, it seems his view is that the data doesn't match his opinions, and so it is wrong. If the data is wrong because volume is low, then surely during the main portion of the crash it must have been even more incorrect?

Really2

tomterm8 wrote: »

With respect to Mr Blanchflower, it seems his view is that the data doesn't match his opinions, and so it is wrong. If the data is wrong because volume is low, then surely during the main portion of the crash it must have been even more incorrect?

I agree, I really can't see people from europe being the main driver of house prices for the last year.
Or is he saying people who just hold euros?

To much analysis for a reason, the main reason is likely not enough quality houses on the market to suit the number of buyers IMHO.

HammerSmashedFace

I think it's commom knowledge that the data is unreliable, I only have to look on PB at a variety of areas to see that large swathes of the country have seen no rises whatsoever, only in the eyes of the VI is current price trend, reliable, believable or normal. In reality it's none of them.

HAMISH_MCTAVISH

I've yet to see a bear explain why the data was fine on even thinner volumes when prices were falling.

Bear Logic 2008/2009 Volume is collapsing, prices are falling, crash cruise speed.

Bear Logic 2009/2010 Volume is rising, prices are rising, pffft, data must be wrong.

:rolleyes:

HAMISH_MCTAVISH

HammerSmashedFace wrote: »

I think it's commom knowledge that the data is unreliable, .

So was the data also unreliable when it showed prices falling?

Did prices never fall as much as the bears claimed, because it was "on low volumes"?

Volume is double what it was when you were all doing little happy dances at the indices falling, so you can't really question the data now based on low volumes and come across as remotely credible.

HAMISH_MCTAVISH

Really2 wrote: »

I agree, I really can't see people from europe being the main driver of house prices for the last year.
.

There are now 2 indices of actual sold prices claiming Aberdeen is within 4% of peak. (RoS monthly, ASPC quarterly) Latest RoS weekly flash puts it at closer to 1%.

Pretty sure we haven't been invaded by Italians waving big wads of Euro's up here....... I think I'd have noticed the food getting better if we had.

HammerSmashedFace

HAMISH_MCTAVISH wrote: »

I've yet to see a bear explain why the data was fine on even thinner volumes when prices were falling.

Bear Logic 2008/2009 Volume is collapsing, prices are falling, crash cruise speed.

Bear Logic 2009/2010 Volume is rising, prices are rising, pffft, data must be wrong.

:rolleyes:

I agree, volume was halted from rising in the crash due to the policies stopping the normal progression of a crash i.e. repo's etc.

However when prices are supposed to be rising these very policies are there to ramp up activity. So to sum up, the same policy skews the crash negatively and skews the rises positively.

Sir_Humphrey

Since we have just had a thread explaining (correctly) why inflation data is statistically problematic, it is a bit rich to argue that other sets of statistical data, derived in a similar (but far less robust) manner are 100% accurate and reliable.

HAMISH_MCTAVISH

HammerSmashedFace wrote: »

I agree, volume was halted from rising in the crash due to the policies stopping the normal progression of a crash i.e. repo's etc.

However when prices are supposed to be rising these very policies are there to ramp up activity. So to sum up, the same policy skews the crash negatively and skews the rises positively.

Which, although it explains why you think prices behaved as they did, doesn't answer my question.

Why were the indices more accurate on lower volumes when prices were falling, but less accurate on higher volumes when prices are rising?

tommy75

Prices still falling throughout the North West & Cheshire according to property bee in the 100k to 200k area. I'm really not sure where prices are infact rising? Maybe its the million pound homes pushing up prices?