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Debate House Prices
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House prices could fall for several years
carolt
Posts: 8,531 Forumite
I was busy this week so apologies if I missed this being posted already:
http://www.guardian.co.uk/money/2010/mar/09/analysis-house-prices-fall-years
"Ed Stansfield of the consultancy Capital Economics thinks February's price fall is a precursor of worse to come: "The correction we saw in 2008 and the beginning of 2009 is probably not over yet," he said. "We've seen a recovery [in house prices] and the number of sales has improved, but if you look at the extent of that recovery against the recessionary backdrop – salaries, rental yields and unemployment figures – they all give you a very similar picture: that house prices haven't finished their correction yet.
"He suspects that prices will start dropping in earnest after the election, once whichever party is in control begins to implement public spending cuts, and when the Bank of England base rate starts to rise again. "House prices will end the year lower than they started it," he said.
Danny Gabay, a former Bank of England economist and director of consultancy Fathom, was even more bearish at the weekend, saying that British homeowners would at best be facing a decade of "flat to slightly falling prices". He went on to predict a 5% fall this year and a 10% decline in 2011."
http://www.guardian.co.uk/money/2010/mar/09/analysis-house-prices-fall-years
"Ed Stansfield of the consultancy Capital Economics thinks February's price fall is a precursor of worse to come: "The correction we saw in 2008 and the beginning of 2009 is probably not over yet," he said. "We've seen a recovery [in house prices] and the number of sales has improved, but if you look at the extent of that recovery against the recessionary backdrop – salaries, rental yields and unemployment figures – they all give you a very similar picture: that house prices haven't finished their correction yet.
"He suspects that prices will start dropping in earnest after the election, once whichever party is in control begins to implement public spending cuts, and when the Bank of England base rate starts to rise again. "House prices will end the year lower than they started it," he said.
Danny Gabay, a former Bank of England economist and director of consultancy Fathom, was even more bearish at the weekend, saying that British homeowners would at best be facing a decade of "flat to slightly falling prices". He went on to predict a 5% fall this year and a 10% decline in 2011."
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Comments
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Capital Economics - Where is Hamish
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I'm sure he'll be along in a minute.
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Bumping specially for Hamish.0
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I suspect that no-one is really predicting big rises or falls this year. My guess is prices will be broadly flat, but plus or minus 10% are possible.0
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Capital Economics have been persistently wrong for some years now. Almost as bad as MoneyWeek in claiming massive falls are just around the corner.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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Prices could fall... or they could rise... or they could stay the same.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Spot on Turnbull. Why any self-respecting national paper bothers to quote them is beyond me - they would be better off making stories pointing in the opposite direction based on previous CE predictions...
http://www.marketoracle.co.uk/Article16183.html
Admittedly, Mr Walayat is not exactly spot on if you follow his own predictions but they are much closer to the mark than CE...0 -
Turnbull2000 wrote: »Capital Economics have been persistently wrong for some years now. Almost as bad as MoneyWeek in claiming massive falls are just around the corner.
So when did you buy, Turnbull?
You appear to have changed your tune rather dramatically, shall we say...
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A good time to STR?
As I have already posted I think housing is an expectations driven market hence momentum often plays a strong role. Off this board Martin has a poll with a lot more participants than we get and the consensus is for a small rise this year - however I can see if the spring bounce doesn't as buyers get nervous ahead of the election and sellers try to cash in on recent rises and then prices start to fall expectations could move very quickly as the govt cuts back and announces that things are a lot worse than the previous bunch claimed. Once expectations are negative the incentive to buy disappears as with all deflations why buy today what you can buy for less next year?I think....0 -
So when did you buy, Turnbull?
You appear to have changed your tune rather dramatically, shall we say...
I haven't bought! Just being realistic. Which is enough to get you a banned on HPC apparently!Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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