House Prices Heading up not down

Rinoa

http://www.dailymail.co.uk/news/article-1299358/House-prices-heading-say-experts.html

Doom-mongers who are predicting a 'double dip' in house prices have got it wrong, experts said today.


The Centre For Economics And Business Research (CEBR) said prices will increase 4 per cent this year and continue rising until 2014, mainly due to a shortage of homes in the UK and low interest rates.

Last week, there were concerns among homeowners after a report by the Nationwide Building Society revealed that property prices fell by 0.5 per cent in July - the first decline since February.

And the National Institute of Economic and Social Research forecast that the market would fall 8 per cent in real terms over the next five years.


The CEBR said: 'It is unfortunate, but hardly surprising, that many commentators are purporting that the minor correction in house prices over recent months is a prelude to an even steeper decline that will engulf the housing market over the coming years.

'Those forecasters projecting a double dip have got it wrong.'

The CEBR expects moderate rises from now until the end of 2011, but believes that prices will increase by 5 per cent in 2012, 5.4per cent in 2013 and 3.9per cent in 2014.

Basically, shortage of homes + low interest rates = no crash.

:beer:

Emy1501

Rinoa wrote: »

http://www.dailymail.co.uk/news/article-1299358/House-prices-heading-say-experts.html



Basically, shortage of homes + low interest rates = no crash.

:beer:

But we have a shortage of homes and low interest rates and prices are falling in the summer months when they normally rise.

I can't see where the confidence is coming to come from in the coming months for prices to rise. Even EA's showing me properties at the moment are talking of a double dip and speaking negatively about the market at the moment.

DaddyBear

You might want to take a look at the main HPI indexes, rather than the musings of some grey suits.

chucky

Rinoa wrote: »

http://www.dailymail.co.uk/news/article-1299358/House-prices-heading-say-experts.html



Basically, shortage of homes + low interest rates = no crash.

but they'll still drop in real terms...

Rinoa

Emy1501 wrote: »

But we have a shortage of homes and low interest rates and prices are falling in the summer months when they normally rise.

I can't see where the confidence is coming to come from in the coming months for prices to rise. Even EA's showing me properties at the moment are talking of a double dip and speaking negatively about the market at the moment.

It's natural for people to be apprehensive about the new austerity measures, but the vast majority will not be affected. The economy is already recovering and people will just get on with their lives as has happened after every other recession we've had.

DaddyBear wrote: »

You might want to take a look at the main HPI indexes, rather than the musings of some grey suits.

The post HPIS surge in properties hasn't helped. But all the kite flyers have already put their property on the market and July supply was lower than June.

HAMISH_MCTAVISH

chucky wrote: »

but they'll still drop in real terms...

Who cares?

Adjusting price indices for inflation against a basket of bananas, TV's and chocolate bars is irrelevant to the actual price you pay.

You don't pay for houses in bananas, (well, except for Macaque) so measuring house prices in them is pointless.

All a real terms drop means is houses got more expensive, AND so did everything else.

Unless wages increase in line with inflation, and that looks unlikely, potential buyers are worse off even with real terms falls. Whereas existing owners benefit with even small wage rises as the price they paid is locked in.

Rinoa

chucky wrote: »

but they'll still drop in real terms...

Oh, indubitably. [FONT=&quot];)[/FONT]

Rinoa

HAMISH_MCTAVISH wrote: »

Who cares?

Adjusting price indices for inflation against a basket of bananas, TV's and chocolate bars is irrelevant to the actual price you pay.

You don't pay for houses in bananas, (well, except for Macaque) so measuring house prices in them is pointless.

All a real terms drop means is houses got more expensive, AND so did everything else.

Unless wages increase in line with inflation, and that looks unlikely, potential buyers are worse off even with real terms falls. Whereas existing owners benefit with even small wage rises as the price they paid is locked in.

And of course, mortgage payments will drop in real terms too. :j

HAMISH_MCTAVISH

Rinoa wrote: »

Oh, indubitably. [FONT=&quot];)[/FONT]

Which is a bit of a Pyrrhic Victory for the bears.....

HAMISH_MCTAVISH

Rinoa wrote: »

And of course, mortgage payments will drop in real terms too. :j

:beer:

Indeed.....

Emy1501

Rinoa wrote: »

It's natural for people to be apprehensive about the new austerity measures, but the vast majority will not be affected. The economy is already recovering and people will just get on with their lives as has happened after every other recession we've had.



The post HPIS surge in properties hasn't helped. But all the kite flyers have already put their property on the market and July supply was lower than June.

So why are houses not selling then? Why are EA's saying things are not great at the moment?

Yes the vast majority are alright but its not the vast majority who are selling houses at the moment. In my experience its mainly divorced couples, Probate properties etc which will need to sell in the near future.

Things may change in the future but the CBR cannot speak for what the general public will be doing in a year or 3 years time so their thoughts are a pointless as anything CE tells us.