House prices seen as overvalued

mystic_trev

LONDON (Reuters) - House prices will ascend gradually this year and next but the market looks increasingly overvalued against shaky fundamentals, according to the latest quarterly Reuters property poll of analysts.

The survey of 29 economists showed house prices rising 2.0 percent this year and 1.9 percent in 2011, a much flatter outlook than January's poll which saw growth of 1.6 percent this year quickening to 2.5 percent in 2011.

http://uk.reuters.com/article/idUKLNE63C03N20100413?rpc=401&feedType=RSS&feedName=propertyNews&rpc=401

kriss_boy

I cant see them rising at all over the next 2/3 years.

Fundamentally the cost of living can only increase and with wage inflation likely to be non-existant over the next 2/3 years what chance do house prices have of increasing.

I believe theres lots of couples like myself and my girlfriend who could afford to upsize, but wouldnt dream of it until we see evidence to support which way house prices are going. That will take another year or so at least.

IveSeenTheLight

Surely this is good, house prices rising roughly in line with inflation.
Nominally they are still expected to rise though.

A 2% increase this year may only mean roughly an average rise of £3,200, but what does that mean compounded over an average 25 year mortgage.

This is still saying for me that it is better to buy sooner rather than later.

Blacklight

Fundamentally the point is no 30-50% crash.

IveSeenTheLight

Blacklight wrote: »

Fundamentally the point is no 30-50% crash.

Prices already corrected approx 20%.
Seems that may have been enough.

brit1234

IveSeenTheLight wrote: »

Prices already corrected approx 20%.
Seems that may have been enough.

Hardly, if it wasn't for interest rates they would be a lot lower. People are starting to max out again what they borrow when interest rates are .5%, highly dangerous. Lots of room for falls.

nembot

If prices had dropped 40% to bring them inline with what they should be historically and they rose 2-3% per year, that would be quite acceptable. What we have now is people clinging onto the last decade of exuberance, in total denial of the cyclic housing market and above/below the line prices.

Looking at the big picture, I think there is still room for further falls... it's 1992 all over again.

I believe Hamish has articles from the 90's

Read what the papers said last time.

Graham_Devon

IveSeenTheLight wrote: »

Surely this is good, house prices rising roughly in line with inflation.

Would have been good if prices had done that since 2000.

Would have made the average price approx £130,000 now, and solved many of the problems we have today.

May not have een had such a bad crash and such a bad defecit due to it.

chucky

it's only the people that can't afford to buy that think that houses are unaffordable

those that can afford it fully appreciate and know they're expensive

the others are just the afflicted

Graham_Devon

chucky wrote: »

it's only the people that can't afford to buy that think that houses are unaffordable

those that can afford it fully appreciate and know they're expensive

the others are just the afflicted

And here we are again. Back to the downright obvious. Houses are unaffordable to those who cannot afford them.

Chucky, did you collect your Nobel prize?

chucky

Graham_Devon wrote: »

And here we are again. Back to the downright obvious. Houses are unaffordable to those who cannot afford them.

Chucky, did you collect your Nobel prize?

you're obviously one of the 'others'