Property market on the verge of panic

macaque_2

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.

Are you saying:

1. A 60% fall in bulls is not a crash in confidence?
2. The 1,000 people polled have suddenly started lying?
3. The 0.1% rise in house prices (Pete's number) has panicked the market?
4. All information that points to house price rises is true and everything else is lies?

Cleaver, help me out here. If we are going to debate this one, I need to know where you are coming from.

Graham_Devon

firstinflight wrote: »

Surely prices won't collapse, because most homeowners would probably take their house off the market rather than sell at a huge loss?

Take a look at Ireland. What you have suggested didn't save them.

julieq

Somebody please explain oversupply to Graham again

macaque_2

chucknorris wrote: »

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

Hmmmmm! Another case of bulls pulling conclusions out of a vacuum. If the evidence doesn't fit the aspiration, just put logic, evidence and rational analysis into a bin bag and declare: "I can see property rising". Another common variant on this theme starts with "in my view".

Cleaver

Graham_Devon wrote: »

Take a look at Ireland. What you have suggested didn't save them.

Ireland's property market, economic situation, social situation and their property crash in general looked very different to the situation in England. My evidence for this is the fact that they've had a much bigger crash in prices over the same time period as us.

LisbonLaura

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.
.

Next week the same good folk will be answering a question about 'counter-party risk'.

chucknorris

would_be_FTB wrote: »

I thought you were a bull, 2015 isn't very bullish.

Well I think property will do well from 2015 onwards.

firstinflight

Graham_Devon wrote: »

Take a look at Ireland. What you have suggested didn't save them.

My understanding is that the severity of the irish crash was driven by:

a) Much higher levels of housebuilding than the UK, leading to many more empty newbuilds that developers had to cut prices on to offload. (Developers are much more keen to sell than homeowners due to costs of holding onto empty developments)

b) Much harder crash both in banking and the economy in general compared to UK, leading to higher number of distressed sales.

c) Much higher % of people employed in the construction sector pre-crash, causing an ongoing feedback loop as job losses hurt property market, which then causes further job losses in the sector.

bendix

Don't you guys get bored of arguing the same old toss everyday?

Cleaver

macaque wrote: »

Are you saying:

1. 60% fall in bulls is not a crash in confidence?

I think we're arguing over words here macaque, so it's probably best just to leave it. All I'm saying is that not I'm not really convinced by these types of survey, no matter what the result. Picture the scene:

Man in the town centre area of Swindon with a clipboard approaches a husband and wife clutching Primark and Argos bags. Husband has a shaved head, a pleasant yet vacant smile, is wearing a Chelsea shirt and is munching on a Greggs sausage roll. Wife is wittering on to him about their trip to Susan and Wayne's next weekend and how she might make a meringue, a bit like the one she made for Georgina's thirtieth last year.

Clipboard Man: "Excuse me, can I ask you some questions about the housing market?"
Husband: "Eh?"
Clipboard Man: "Can I ask you some questions about the housing market?"
Husband: "Err, yeah, I guess so."
Clipboard Man: "Do you think house prices will rise, fall or stay the same over the next year?"
Husband: "Err, I dunno."
Wife: "Oh come on love, yes you do. Have a think."
Husband: "Err, I really dunno. Houses always go up don't they?"
Clipboard Man: "Well, do you think they'll go up over the next 12 months?"
Husband: "Errr, I dunno. Haven't they gone down or something lately?"
Wife: "I was reading in the Mail that they are going up."
Husband: "You and that f*cking paper, you were telling me that carrots give you cancer last week. What do they know?"
Wife: "Don't you dare talk to me like that."
Husband: "Sorry love. You know I'm joking. Err, what was the question again?"
Clipboard Man: "Do you think house prices will rise, fall or stay the same over the next year?"
Husband: "Maybe."
Clipboard Man: "Errr, I don't have an option for maybe. Although I'm not really sure what I'm doing, I'm studying for a PhD in Astronomy and I'm just working for this market research company during uni holidays. The options I have on my sheet are rise, fall or stay the same. So you need to pick one of them."
Husband: "Oh, okay. Erm. Well, let's just go for stay the same, I dunno really."
Clipboard Man: "Great, I'll stick you down for that. You madam?"
Wife: "What's your PhD in? Star signs?"
Clipboard Man: "No, Astronomy. Stars, planets, galaxies, that type of thing."
Wife: "So why you asking me about house prices?"
Husband: <mouth stuffed with sausage roll> "He's told you that you daft mare."
Wife: "Oh, yeah, holiday job. Lovely. You need the cash don't you, you students?"
Clipboard Man: "Er, yeah. So what's your answer?"
Wife: "To what?"
Clipboard Man: "The house price question."
Wife: "Oh, I don't know love. Stick me down for any one of them. I don't know about this stuff, never have."
Clipboard Man: "I've been told I can't do that."
Wife: "What did you go for again? Stay the same?"
Husband: "Yeah."
Wife: "Oh, stick me down for that, I dunno. Think I said rise last year."
Clipboard Man: "Cracking, thanks."

<Clipboard Man moves on to next couple>

All I'm saying is that it doesn't really mean anything, does it? I'm not saying that there isn't a change in sentiment, because there obviously is. I'm just not convinved a random survey of 1,000 members of the public will give you anything other than a reguritation of whatever is in the media at the present time.

I'm not questioning the figures. It seems a fact a this time last year 16% saw falls (after ten months of rises and two months of falls, so that makes sense) and now 42% see falls (after five months of rises and six months of falls, which also makes sense). That all seems logical to me - the public tell you what they've seen happen and think that this is what will happen in the future.

macaque wrote: »

4. All information that points to house price rises is true and everything else is lies?.

C'mon macaque, I'm not Sibley. I've already said on this thread I think house prices will stay the same over the forseeable future (and if you pushed me to say whether they will rise or fall over the next 12 months I'd go for fall). So I'm not exactly bullish, am I?