Tradefair & Financials
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19 Aug 09
07:52
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14 Aug 09
20-30% 2 years.
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Reasons please ?
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unemployment. bingo
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Look at the long run affordability, the fact we are in a BANKING CRISIS (Banking crisis takes 3-4 years to sort out historically min), which means credit cannot expand (house price inflation relies on credit expansion) and houses prices cannot rise and will more than likely fall untill the banking sector is back in full health. Unemployment to hit 3.5-4 million cannot be good news for house prices, no normal average first buyer with an average wage who can afford an average home, the market relies on someone with a higher the average wage buying a cheaper than average home=affordability still stinks.
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real prices
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All sounds so intelligent and logical.
Almost predictable in fact. So how come markets are uiually unforecastable ?. Have you chappies found some magical absolute forecasting formula that has eluded the world of economists and investors so far in history ?. I'm not saying you are necessarily wrong but just that you are not necessarily right. It's an unknown. Such is life. All I know is that is as totally wrong to be 100% uninvested in property as it is to be to the contrary. |
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it might be a 40% drop, it could be a 10%, I certaintly don't see any real rises for a good few years to come. Property has been (UK+US) in a bull market for the last ten years (look at the average high st and the number of EA's) a correction has to come, and that correction is likely to be at least as brutal as what's happened in the past since the real rises have been so much more dramatic. Investing/Developing property is completely different, if I am involved in this I don't think about what's going to happen to prices in 2-4 years, i think how much can I add value, whats a good price to buy and what are the costs of the work.
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Unemployment willnot have that big an affect on the housing market. Absolute fact. Unemployment by itself will not cause those drops. Interest rates and Unemployment in tandem? maybe.. But that is unlikelym given rates are likely to stay at current levels for at least a year.
This is all about supply and demand. Few properties on the market and enough people confident enough to buy. QE shoud eventually help create jobs , increase assett prices before BOE eventually withdraws the billions it has pumped in bty selling the assetts it purchased. Before contemplating how much prices will fall, peopel need to consider the amount of governemnt intervention in the housing market , banking a nd financial sectors. My view is that house prices will be about the same in 2 years as they are now. Obviously some areas will suffer more than others |
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Unemployment will not have that big an affect on the housing market.
QE shoud eventually help create jobs Saved for posterity. |
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30-45% drop by this time next year.
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the sht storm is about to hit. imo banks are in a much worse position that you think. the bailouts were a total waste of money
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30% drop realistic by 2011 end.
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I think it possible for house prices to stabilise and even tick up a bit before the election.
Shortly after the election though the climate changes with a vengeance. Assuming an incoming Tory administration finds the complete financial picture is considerably worse than NuLab have let on, and not forgetting that the rating agencies are threatening to downgrade UK debt unless borrowing levels are addressed effectively, Osborne is likely to introduce a savage emergency budget. It makes senses for the Tories to do this as it allows them to try and blame Brown for the mess, stops the rating agencies downgrading UK debt, and gives them the chance of seeing the benefits of appropriate action before the next election. The emergency budget must address the excessive borrowing and this implies lower public sector spending and higher taxes. It will be in the Tories' interests to paint the bleakest picture possible to justify severe cuts. This must hit consumer confidence and consumer spending. Remember, NuLab are throwing the kitchen sink at the problem to try and get votes at the 2010 election, the Tories will be much more concerned about the likely picture in 2014-2015. |
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i think we will see
higher taxes higher unemployment higher inflation higher interest rates as will be unavoidable all are a disaster for housing, and in fact the country as a whole. i think more banks will default too (further pressure on housing) and would not have a penny in that sector as this unwinds |
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Absolutely hilarious. I guess none of you predicting 25-30% drops actually own a property?
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so we're comedians now?
no property here. the difference between us chisel, is that you think the talking heads know what they're talking about, and that the government is looking out for the population's interest. you are in for a rude awakening. |
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and u call me hilarious yet you come out with statements like
Unemployment willnot have that big an affect on the housing market. Absolute fact. lol. care to elaborate? how the fk is it absolute fact looool |
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Don
I feel that people that have not bought a home seem to want to see prices drop by more, because they think (incorrectly and incoherently) that they will one day be able to say "I told you so"!! This is simply not a good enough argument..Sorry |
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lmao. that's no different to you wanting to go up in value because it suits your business - its called vested interest.
im sure there are some that want prices to go down for that reason like you say. it's nothing to do with "i told you so". and nothing to do with what i want - it's about what is happening. i assume by the absence of any comment that you cannot back up your assertion that it is a fact that unemployment increases will have little effect on house prices. you sir, live in cloud cuckoo land. regrettably so does most of the population however, because they listen to clowns like you. |
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Put a sock in it will you Don old boy.
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another well rounded argument from the ignorant
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Stop talking about yourself Don.
It's not good manners. |
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lol very school boy. will you be insulting my mother next? :)
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That's a bit strange, even for you Don.
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Contact the friendly people at Frank Knight and they will let you mnake the eqqivelent of a spread bet that assume prices will fall just over 2.0% by December 2010
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lol ...don.
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I think we are going to see a bigger crash next time
Reasons: A gov't that is inflation hungry (to pay off debt) - will lead to higher interest rates. this for me will be the litmus test of our economy and I think we will fall. Lack of Gov't housing tax incentives once election is done. over supply of poor properties that still havent been cleared off balance sheets.Once demand and credit improves we could see a flood of theseproperties on the market which will only bring prices down. Unemployment - dont really need to explain this Higher Taxes- to cut the UK debt Its also worth bearing in mind that average house prices (£156k) are still over 6 times the average salary (£25k) Not sure of the figures but have a feeling we could see a big problem in the UK. We have seen that our housing market is credit and sentiment driven. It could happen quite easily again as the sharks take profits in 2 yrs tims on their cash heavy investments and leave the poor holding the baby! |
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whats a poor property......
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God only knows crediter..
These are desperate ramblings from people being proven wrong on a daily basis. They have stuck their heads in the sand, and are basing their arguments on how things were a year ago!! Based on today, prices would rise, if you presume rates will stay at 0.5% forever. This is not going to happen, so the job is to predict when Interest rates will rise and what they will rise by... My view is that we are safe for 12 months, then who knows ! |
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desperate ramblings
we are currently living in a false economy we are not sure of the effects of the QE program yet but there ARE bug risks of high inflation With high inflation folliws high interest rates (although the next Gov't may delay this as much as possible) Are you saying that as a country we can afford interest rates in excess of 5% and possibly higher? Poor properties obviously refers to the New Build and buy to let sector which are all still sitting on balance books with no real value |
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at the moment there seems to be a stabilisation, which in my opinion is purely down the a higher demand than supply. Property values have already decreased and people are sittingon their houses as they are innegative equity. There may come a point through higher unemployment or raises in interest rates, that the people will be forced to sell, and at that point the prices will tumble
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Or a third wave of financial crisis involving banks and sterling. The sort of thing that everyone sort of understands so becomes front page news on BBC sun etc, and then the market loses confidence in Banks/Brown/Economy etc. suddenly more sellers than buyers. won't belong now.
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Jimbo
It will happen , but it is not happening any time soon. Interest rates are expected to stay at current levels until at least summer 2010, and expectations arte that they wikl not rise above 3% for at least 3 years. This will coincide with the withdrawal of QE and lower interest rates again in the future This country could see low interest rates fior a very VERY long time. |
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Interest rates hold the key to housing, stay as they are and return to around the 2% target and we may get away with small losses in house values, interest rate rises over 2% and maybe up to 5% will have householders running for cover, repossessions will soar and the double dip recession will be upon us, unemployment a huge factor too.
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rubbish
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Crediter
I do not think that is rubbish to be honest! I know of many people that could have lost their homes or at least been forced to sell them if rates had stayed high. That flood of properties to the market would and could see prices struggle to hold up. On the flip side crediter, you are right. People will buy a home if teh finance is available. They will pay higher rates, and teh temptation for banks will be to increase risk to get greater rewards. You and I also know Creiter , that a return to BOE rates at 4% does not necessarily mean that Fixed rates being offered will be any hiogher than they are today. My only surprise is that the fall in LIBOR to 0.54% has not been publicised recently. Banks that were citing reasons for Variable rate cuts not being possible because LIBOR was 150 point over BOE rate have been very quiet of late. SWAP rates are also falling, 1 year money well under 1% and 2, 3, 5 etcv also falling recently. No sign of great mortgage rates, although rates are falling slightly |
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we are first call on a mortgage...
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weren't the interest rates close to 9% in the middle of a recession in 1990/1991 when the tories were in power?
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The tories don't give a sh1t about people losing their houses. They care about keeping the money in the country and the small percentage of people that fund them that benefit from high interest rates
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Magic
At one point during the ERM business they got up to something like 15%. |