Property market on the verge of panic

macaque_2

This article reports a near catastrophic collapse in sentiment. A year ago, 16% of people believed that house prices would fall. Since then, prices have been drifting downwards with almost every passing month. Today, 42% of people expect house prices to fall. Given that we have more or less the same information as last year and house prices are cheaper, logic suggests that sentiment should have been the same or better. The herd only seems to learn from harsh reality.

http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=531598

Cleaver

The percentage expecting prices to fall has risen to 42% from 16% a year ago.

Just 11% of the 1,000 people surveyed on a monthly basis now believe house prices will rise in the months ahead.

That leaves 47% sitting on the fence, neither believing prices will fall or rise, reflecting the stagnant nature of the property market.

News shocker: prices stagnate and half of people think they'll continue to stagnate.

It's not really a "catastrophic collapse in sentiment" is it?

Pete111

macaque wrote: »

This article reports a near catastrophic collapse in sentiment. A year ago, 16% of people believed that house prices would fall. Since then, prices have been drifting downwards with almost every passing month. Today, 42% of people expect house prices to fall. Given that we have more or less the same information as last year and house prices are cheaper, logic suggests that sentiment should have been the same or better. The herd only seems to learn from harsh reality.

http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=531598

Lol - this from Nationwide:

House prices increase by 0.5% in March

• House prices increased by 0.5% in March
• On the three month on three month measure, prices rose by 0.6%
• Prices 0.1% higher than one year ago

Hope you've got the sunscreen out Monkey - must be pretty warm up there on hope mountain given the recent weather?

macaque_2

Pete111 wrote: »

Lol - this from Nationwide:


House prices increased by 0.5% in March

• On the three month on three month measure, prices rose by 0.6%
• Prices 0.1% higher than one year ago

Hope you've got the sunscreen out Monkey - must be pretty warm up there on hope mountain given the recent weather?

Thank you Pete111. Here's another quote:

House prices have fallen by 2.4% in the last 12 months, shaving more than £4,000 off the average price of a property.

http://moneyfacts.co.uk/news/mortgages/house-prices-down-24-year-on-year-4-2-11/

Cleaver
42 - 16 = 26
26/42 x 100 = 62%

62% fall = catastrophic collapse in sentiment

P.S. I am baffled that anyone could see this as anything less than a collapse in sentiment.

Pete111

macaque wrote: »

Thank you Pete111. Here's another quote:

House prices have fallen by 2.4% in the last 12 months, shaving more than £4,000 off the average price of a property.

http://moneyfacts.co.uk/news/mortgag...n-year-4-2-11/



Well if you must include houses in the North.....

Fortunately, most of the people that matter don't live (or own houses) there.

Cleaver

macaque wrote: »

Cleaver
42 - 16 = 26
26/42 x 100 = 62%

62% fall = catastrophic collapse in sentiment

P.S. I am baffled that anyone could see this as anything less than a collapse in sentiment.

Macaque, from what I can see from the article they went out on to the street and asked 1,000 people whether they thought property prices are going to fall, rise or stay the same.

This time a year ago when they asked this question just 16% of people thought they would fall. I'm presuming it was asked in April 2010, when we had seen ten consecutive monthly house price rises (source: Nationwide). Ten months! So no wonder when 1,000 of Joe Public were asked whether they thought house prices were going to fall did only 16% go, "errrrr, yeah."

Fast forward a year and we have a picture where 11% see rises, 42% see falls and 47% see stagnation. Well, doesn't this reflect the past 12 months, just like last year's survey? Since the last survey we've seen monthly prices rise five times, fall six times and stay flat once (source: Nationwide). And prices are roughly the same as they were this time last year (or down a bit, depending on which month you use).

So, could we just conclude that these 1,000 people basically just churn out an opinion that reflects what they are seeing in the media? And isn't that just what we all do?

It isn't really a 'collapse in confidence', it's just people saying what they're seeing. Last year everyone thought house prices would rise because they'd been rising. This year we have a mixed picture of the market and more of a mixed response.

I'm not trying to paint some rosey picture by the way, I don't think house prices will rise this year, next year or for many more years.

Graham_Devon

Cleaver wrote: »

Macaque, from what I can see from the article they went out on to the street and asked 1,000 people whether they thought property prices are going to fall, rise or stay the same.

This time a year ago when they asked this question just 16% of people thought they would fall. I'm presuming it was asked in April 2010, when we had seen ten consecutive monthly house price rises (source: Nationwide). Ten months! So no wonder when 1,000 of Joe Public were asked whether they thought house prices were going to fall did only 16% go, "errrrr, yeah."

Fast forward a year and we have a picture where 11% see rises, 42% see falls and 47% see stagnation. Well, doesn't this reflect the past 12 months, just like last year's survey? Since the last survey we've seen monthly prices rise five times, fall six times and stay flat once (source: Nationwide). And prices are roughly the same as they were this time last year (or down a bit, depending on which month you use).

So, could we just conclude that these 1,000 people basically just churn out an opinion that reflects what they are seeing in the media? And isn't that just what we all do?

It isn't really a 'collapse in confidence', it's just people saying what they're seeing. Last year everyone thought house prices would rise because they'd been rising. This year we have a mixed picture of the market and more of a mixed response.

I'm not trying to paint some rosey picture by the way, I don't think house prices will rise this year, next year or for many more years.

To be fair, a big thing was made last year over the same survey. Afterall, it was more positive.

None of what you are now stating was stated on that thread. It was taken for what it was.

chucknorris

Cleaver wrote: »

I'm not trying to paint some rosey picture by the way, I don't think house prices will rise this year, next year or for many more years.

I agree with the next few years but I can see property rising as early as 2015

firstinflight

Surely prices won't collapse, because most homeowners would probably take their house off the market rather than sell at a huge loss? Even if there was a massive collapse in confidence, the housing market isn't like the stock market. There wouldn't be a wave of selling and associated price crash because ultimately, people still need a place to live. The only threat is if there was a sharp rise in distressed sales, but with rates so low, unemployment not catastrophic and BTL rents doing ok, that seems unlikely in the short to medium term.

Stagnation seems far more likely as buyers wait for prices to fall and sellers wait for them to rise.

kabayiri

Pete111 wrote: »

.......
Well if you must include houses in the North.....

Fortunately, most of the people that matter don't live (or own houses) there.

Yeah, I'd go further even.

Why include places like Bracknell? Horrid new builds.

Or Milton Keynes...roundabout city.

The only nice place as we all know is 'round my way'.

Except, the North is a pit, we don't want any Southern peeps thinking it worth buying up here.

Cleaver

Graham_Devon wrote: »

To be fair, a big thing was made last year over the same survey. Afterall, it was more positive.

None of what you are now stating was stated on that thread. It was taken for what it was.

Fair enough. I can't really change what was said in a thread a year ago though.

Dunno if I commented on that thread, but I would have said then what I've said now. If you ask 1,000 members of the general public which way they think the housing market is going then, aside from a few armchair economists, most will just give you their verdict based on what's been in the media over the past few months.

Isn't last year a case in point? Only 16% of people thought house prices would fall, probably because they'd been rising continually over the previous ten months.