Thursday, 31 July 2008

No surprises here

The UK housing crash continues. According to the Nationwide index, prices fell 1.7 percent last month. Prices are down 9 percent from the peak last October. Furthermore, the crash has wiped out about two years of price appreciation. In fact, prices are now back to their August 2006 level.

How low can it go? Well, if the unprecedented and unsustainable upswing is any guide, then prices still have a long way to go before this crash has done its work. Will they fall 20 percent? Definitely. Could they fall 30 percent? Probably. Might they fall 40 percent? It is a possibility. What about 50 percent? It can't be ruled out.

4 comments:

aSteve said...

Fionnuala Earley says 25% - which makes me think that this is rather an under-estimation... given her vested interest credentials.

CWS said...

Is she saying -25 percent? Lordy.

Anonymous said...

Thanks for these Alice - let's see those wonderful graphs you did (June 15) again sometimes! If the shape of this bust one matches the last, my guess is a real drop in the end of 55%-60%, the nominal drop depending on what inflation does.

But of course last time there wasn't a credit crunch, so maybe that does take the market into "uncharted territory"...

I have a taped comment from someone who grew up in the US in the thirties: "Back then my grandfather had a lot of property in the town - but in the thirties, if you owned property, you were just 'property-poor."

B. in C.

Anonymous said...

Ms Early says 25%, christ, 75% anyone??