Debate House Prices


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BoE "comfortable with slowly deflating housing sector"

2

Comments

  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Graham_Devon wrote: »
    That got absolutely nothing to do with my post really. Jobs are still lost, even through natural wastage.

    The natural wastage argument is compltely flawed...we have new workers looking for jobs all the time...hence unemployment goes up, as new worker can no longer fill the position thats gone through natural wastage. (No secumbming to media spin here, sorry).

    My question was more where wage inflation will come from. This is now the fourth time I have asked you, you always state it will happen as fact. But never seem to keen to answer how.

    Well according to that silly programme the other night, the guy stated that for every public sector job created a private sector job is lost, using a bit of logic here, maybe the reverse is true.
    '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 Thatcher
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Blacklight wrote: »
    Alright Graham, you win, there won't be any pay rises ever again. Ever.

    I'm not arguing. I'm asking you to explain your statements. Once again, you have chosen not to. Wonder why?
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Graham_Devon wrote: »
    I'm not arguing. I'm asking you to explain your statements. Once again, you have chosen not to. Wonder why?

    Just done it for him/her, refer above :)
    '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 Thatcher
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    StevieJ wrote: »
    Just done it for him/her, refer above :)

    That explained where wage inflation is going to come from?

    Were not talking simply "any" wage inflation here, i.e. 0.01% rise counts as wage inflation. He uses it as a reason for house prices increasing....which means wage inflation above general inflation.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Graham_Devon wrote: »
    That explained where wage inflation is going to come from?

    Were not talking simply "any" wage inflation here, i.e. 0.01% rise counts as wage inflation. He uses it as a reason for house prices increasing....which means wage inflation above general inflation.

    I thought you were saying that public sector jobs were going AWOL, and so wage inflation would be forced down, I was simply responding to that, it may be that private sector job creation wil be a natural response.
    That got absolutely nothing to do with my post really. Jobs are still lost, even through natural wastage.

    The natural wastage argument is compltely flawed...we have new workers looking for jobs all the time...hence unemployment goes up, as new worker can no longer fill the position thats gone through natural wastage. (No secumbming to media spin here, sorry).
    '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 Thatcher
  • Wookster
    Wookster Posts: 3,795 Forumite
    Blacklight wrote: »
    I expect it refers to house prices falling slowly in real terms, which is the probable outcome. History also testifies to this.

    Wages will catch up, prices will not fall.

    :rotfl:

    490,000 public sector jobs to go, 2.5M unemployed and yet wages will rise?

    Can anyone spot the problem here?
  • worldtraveller
    worldtraveller Posts: 14,012 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Why do people think that the BOE are any better at forecasting what's actually going to happen in the UK economy than most of the pointless Ivory Towered economists today? :wall:
    There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    worldtraveller wrote: »
    Why do people think that the BOE are any better at forecasting what's actually going to happen in the UK economy than most of the pointless Ivory Towered economists today? :wall:

    Because they have a better record than most.
    '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 Thatcher
  • Procrastinator333
    Procrastinator333 Posts: 1,694 Forumite
    Blacklight wrote: »
    Wages will catch up, prices will not fall.

    Don't get me wrong, I think inflation is likely to eat away at the value of property more than nominal falls by the end of this. But to suggest there will be no nominal falls is simply wrong in light of what is already happening:


    3 month average:

    Nationwide -1.5%
    Halifax -1.2%
    Rightmove +0.3%
    LR +0.5%

    Net balance on RICS:
    June +9, July -8, Aug -32, Sep-36, Oct -49


    RICS (leading indicator of the lot) is moving firmly downwards. Hali and Nationwide follow RICS and are now showing reasonable quarterly falls. LR is almost certain to follow over the coming months.

    I just don't get how you can claim:
    Blacklight wrote: »
    prices will not fall.

    when they are falling already?

    Personally, the only thing I can see left to put the brakes on these falls is if sellers withdraw from the market. Yes the RICS report shows a -4% balance on the number of new vendors, but that is more than outpaced by the -12% on the number of new buyers.

    Maybe I'm missing something, but what is left to stop the falls? Little prospect of a recovery in employmnet figures, increased costs for those with jobs, continued restrictions on lending - possibly getting tighter once the FSA is done, no chance of interest rate falls, and at present, buyers still leaving the market faster than vendors. I always thought that vendors would withdraw, and maybe they still will once the negative YoY numbers start to hit the media in Dec/Jan, but there is no sign of it yet.

    If I'm missing something, please tell me, but what is there to stop the falls from carrying on?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Procrastinator333 wrote: »
    Personally, the only thing I can see left to put the brakes on these falls is if sellers withdraw from the market.

    There'll always be sellers that's one certainty in life.
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