tag:blogger.com,1999:blog-2948538160252327076.post1190446278344600064..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: DIY house price projectionsAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-2948538160252327076.post-34480303304437261082008-11-15T12:25:00.000+00:002008-11-15T12:25:00.000+00:00All th bubbles looke largely symmetrical on the gr...All th bubbles looke largely symmetrical on the graph, like it's a pattern. Bad stuff. :( Sheni.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-74013578662517295922008-11-13T12:07:00.000+00:002008-11-13T12:07:00.000+00:00Nick,What's yours?I drink Fourier.B. in C.Nick,<BR/><BR/>What's yours?<BR/><BR/>I drink Fourier.<BR/><BR/>B. in C.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-27213674451473260002008-11-13T00:57:00.000+00:002008-11-13T00:57:00.000+00:00We demand our standard of living for no other reas...We demand our standard of living for no other reason than we're British.<BR/><BR/>Smell the coffee.Electro-Kevinhttps://www.blogger.com/profile/18073103431166273080noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-4253260656023849222008-11-13T00:55:00.000+00:002008-11-13T00:55:00.000+00:00"For the last century, increasing population with ..."For the last century, increasing population with a Fixed geographical area."<BR/><BR/>Yeah. And everyone demanding their own bedroom and a shower every day.<BR/><BR/>That's not how it is in the big bad world.<BR/><BR/>Why should it be any different in Britain ?<BR/><BR/>Racism.Electro-Kevinhttps://www.blogger.com/profile/18073103431166273080noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-71411260052650356462008-11-12T15:19:00.000+00:002008-11-12T15:19:00.000+00:00Mark,As usual I enjoy your bare bones approach to ...Mark,<BR/><BR/>As usual I enjoy your bare bones approach to back-of-the-beermat calculations.Nick von Miseshttps://www.blogger.com/profile/03985951853422897135noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-22876142883092562322008-11-12T14:57:00.000+00:002008-11-12T14:57:00.000+00:00All this adjusting for inflation is pointless. Lon...All this adjusting for inflation is pointless. Long run, prices have to be plotted against earnings growth - that's why the Nationwide chart shows the 2.8% rising long term trend - that's the excess of earnings growth over inflation.<BR/><BR/>So all you need for a comparative is absolute house prices at bottom of last trough in 1995 and a <A HREF="http://www.measuringworth.com/ukcompare/" REL="nofollow">handy indexation calculator</A> that indexes things up for earnings growth.<BR/><BR/>Ah ... £60,000 (avg price 1995) in 1995 = £98,000 in 2007, or about half what avg prices actually were.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-23425856881237849812008-11-12T11:25:00.000+00:002008-11-12T11:25:00.000+00:00Just watch. Stay out of the market.Don't get caugh...Just watch. <BR/><BR/>Stay out of the market.<BR/><BR/>Don't get caught in the Spring bull trap.<BR/><BR/>B. in C.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-22432073059333373212008-11-12T11:02:00.000+00:002008-11-12T11:02:00.000+00:00Could you produce the same type of chart, inflatio...Could you produce the same type of chart, inflation adjusted?<BR/><BR/>I did the same exercise...you can see it in the site: http://housingfinland.blogspot.com/<BR/><BR/>which show, price but adjusted to inflation...<BR/><BR/>HousingFinlandAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-17520314244562603282008-11-12T10:39:00.000+00:002008-11-12T10:39:00.000+00:00London Estate Agent is continuing the tradition wi...London Estate Agent is continuing the tradition with the "Free Beer Tomorrow"predictions of previous slumps.<BR/> The son of a friend of mine is a partner in a big name national firm of top end estate agents.I believe they have a rotation of who calls bottom to save embarassment but anyway his prediction in Feb 2008 for this year was 3% growth in prices.<BR/> Their problem lies in the fact that the written word fails to project the authority of received pronounciation which,from an early age,is drummed into such folk so that their rantings are believed by lesser people such as us.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-90478830919937664452008-11-12T03:10:00.000+00:002008-11-12T03:10:00.000+00:00Before the Asian crisis, we never expect propertie...Before the Asian crisis, we never expect properties CAN fall. We only knew it would go up and up. <BR/><BR/>Also look at Japan. Japanese and HK people are the very people on earth experienced deflation and can tell you how painful it is. <BR/><BR/>Mind you, we Fareast people used to save money. When we have economic downturn, we still have some cushions. <BR/><BR/>One more thing I would like to mention is: Depression was common, and suicide rate surged sharply. Middle class were largely wiped off. Roubini joked that we should buy stocks from company which manufacture anti-depression drugs. After all Roubini did not experience deflation himself. I see worse because people either denied they have depression or they can't afford to buy medicines. Neither can chemists escape from deflation.<BR/><BR/>Cross my fingers, hope this will never happen in UK. <BR/><BR/>mLAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-2627568311525942262008-11-12T02:23:00.000+00:002008-11-12T02:23:00.000+00:00Good heavens mL, that's really scary.The problem i...Good heavens mL, that's really scary.<BR/><BR/>The problem in the west is we're used to seeing cyclical peaks and troughs. Slumps are new in recent times and nobody really knows what its going to look like... or indeed if we'll even have a slump. Personally, I think we will. The current economic climate just feels all wrong this time around and especially so in the UK.John Pickworthhttps://www.blogger.com/profile/02166443099429490782noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-34409552491005106232008-11-12T00:52:00.000+00:002008-11-12T00:52:00.000+00:00I am from Hong Kong. We experienced serious deflat...I am from Hong Kong. We experienced serious deflation during 1997-2003. <BR/><BR/>How much the house price will be dropped in UK and US? I think our experience may give some cues.<BR/><BR/>The average house/apartment price index (6th July, 1997 as 100) dropped to 31.77 on 24th August, 2003. <BR/><BR/>Since then, the index was never higher 75 (73.98 on 2nd March, 2008)<BR/><BR/>If same happened to UK/US, houses prices will drop at least 60% from peak to tough.<BR/><BR/><BR/>mL <BR/><BR/><BR/>data can be found from:<BR/>http://www.centanet.com/icms/ICMServlet/download/174-1451-12998/CCI&L.xlsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-29601461928127778842008-11-11T22:11:00.000+00:002008-11-11T22:11:00.000+00:00That trend line steepens far too much from 1990. W...That trend line steepens far too much from 1990. What's it based on?<BR/><BR/>Long term, housing trends with incomes (which haven't grown in real terms since early 1970s) less maintenance. The trend line ought to be more or less flat from the mid 1970s in real terms comparing like for like. Hard to do, of course, because new builds can't be properly compared and the UK doesn't have a Case-Schiller style existing homes index that I'm aware of.<BR/><BR/>Oh well, this is far from my area of expertise. It's enough to know peak-to-trough 50% real decline is the middle of the range of likely drops.Nick von Miseshttps://www.blogger.com/profile/03985951853422897135noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-30383841945408458872008-11-11T21:39:00.000+00:002008-11-11T21:39:00.000+00:00I think the fall is a bit too steep and the timing...I think the fall is a bit too steep and the timing is a year late. Have a look at graphs on the top of page 3 at: http://www.nationwide.co.uk/HPI/historical/Oct_2008.pdf<BR/><BR/>Right hand graph:<BR/>Judging by the last two dips, the worst of the damage was over in about 3-4 years after peak so extrapolating past 2007 leads me to say the worst will be past this time in between 2010 to 2011.<BR/><BR/>Left hand graph:<BR/>Very useful for people savings up a deposit. Currently, house prices are falling in nominal terms i.e. even without compensating for inflation. When future editions of the Nationwide report show the left hand graph take off again then that is a warning to savers - your savings may be eroding in value faster than inflation.<BR/><BR/>Don't bother trying to work out precisely where the bottom is - you'll only know for sure when it's past.<BR/><BR/>@london estate agent<BR/><BR/>2009? Your pulling our leg right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-33274666482852518832008-11-11T21:13:00.000+00:002008-11-11T21:13:00.000+00:00Ok my turn....house prices continue to fall until ...Ok my turn....house prices continue to fall until the general economy picks up and people really feel it;not just government "green shoots" rubbish.This could take at a min 4 years.<BR/>People have been truly frightened by the speed of this crash.Mitchhttps://www.blogger.com/profile/01024073152949016734noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-88564139029863371932008-11-11T20:38:00.000+00:002008-11-11T20:38:00.000+00:00London estate agent: way too optimistic but I am g...London estate agent: way too optimistic but I am getting used to estate agents' comments about the property market...<BR/>Before sharing with us your enlighted prediction of increase for 2009, could you please let us know if you had actually (correctly) predicted the current crash and advised your first time buyer clients to wait xmas 2009 for the market to bottom... How many FTB have you successfully convinced to postpone their purchase?Anonymoushttps://www.blogger.com/profile/13102505525161328082noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-29377481434054635862008-11-11T20:31:00.000+00:002008-11-11T20:31:00.000+00:00E-K: ".. and racism"Yea, those damn racists."What'...E-K: ".. and racism"<BR/><BR/>Yea, those damn racists.<BR/><BR/>"What's so special about the British that their houses should continue to be so desirable"<BR/><BR/>For the last century, increasing population with a Fixed geographical area.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-77423089116394757582008-11-11T20:02:00.000+00:002008-11-11T20:02:00.000+00:00Fag packet stuff...I predict a 45% fall from peak ...Fag packet stuff...<BR/><BR/>I predict a 45% fall from peak (low point December 2009) and then stabilising around the 40% until late in 2010. Prices will creep up a little through 2011 before seeing a London led mini-boom driven by the forthcoming 2012 Olympics.<BR/><BR/>Then the tax bills arrive for all that borrowed Brown bucks.<BR/><BR/>Smart money currently going into buying the Presidency of a small cocaine producing republic ;-)John Pickworthhttps://www.blogger.com/profile/02166443099429490782noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-73188231226439573542008-11-11T19:45:00.000+00:002008-11-11T19:45:00.000+00:00That fall looks a little steep to me.I predict tha...That fall looks a little steep to me.<BR/><BR/>I predict that property prices will stabilise by the middle of next year, with some increases towards xmas 2009 and a solid 5-7 percent growth in 2010. The gains will be a little stronger in London.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-79570479936895145832008-11-11T19:14:00.000+00:002008-11-11T19:14:00.000+00:00Good one Markbaldy. :) I think the recession will ...Good one Markbaldy. :) I think the recession will hit a bottom just like the boom hit a peak. And trade will go on and things will become scarce again and prices will go up. I am positive about the future! The housing market is like a big ship at sea. It takes time to turn.Colin Brazendalehttps://www.blogger.com/profile/06125192812295890840noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-8775790774248740552008-11-11T19:01:00.000+00:002008-11-11T19:01:00.000+00:00I think that the prices will be determined by affo...I think that the prices will be determined by affordablity and not by what magical mortgage products the banks conjure up... as they did till last year.<BR/>Couple that with rising fuel bills, taxes to pay for government overspending, rising inflation (due to a weak £ - thanks to Gordon/BOE), massive unemployment, and a shift from seeing a house as an ATM... and I think prices will go back to 2001 levels (compared to earnings) - maybe lower?<BR/>But, you have to ask yourself WHAT will bring the UK out of recession ?<BR/>I mean we have no manufacturing, confidence in banking is frayed - so how will this recovery come about ?... borrowing money is a quick fix - not sustainable and has to be repaid WITH INTEREST.<BR/>Sometimes I think Gordon Brown needs basic lessons in maths... perhaps I'll send him a calculator for Christmas... and yes I'd better make sure the instructions are with it so he knows how to switch it on !Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-66455873247561886862008-11-11T18:04:00.000+00:002008-11-11T18:04:00.000+00:00The scale is too short.It starts in 1952. OK - I'...The scale is too short.<BR/><BR/>It starts in 1952. OK - I'll accept that we could project back to the 1920s.<BR/><BR/>People are basing their arguments around the housing market over a cycle of a mere 70 years of human history.<BR/><BR/>There is no stated precedent which determines that the underlying curve should go upwards ad infinitum. The whole presumption that British real estate will increase in value is false and based on assumptions which are founded in arrogance and racism.<BR/><BR/>What's so special about the British that their houses should continue to be so desirable ?Electro-Kevinhttps://www.blogger.com/profile/18073103431166273080noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-85183930127542130202008-11-11T17:45:00.000+00:002008-11-11T17:45:00.000+00:00Colin,The trend line was my original forecast. I u...Colin,<BR/><BR/>The trend line was my original forecast. I used it to project a fall of about 25 percent in real terms.<BR/><BR/>Brian's point (one that I recall he made at the time), is that prices overshoot on a downswing.<BR/><BR/>Anyway, Brian produced his projection which suggests a fall of 60 percent.<BR/><BR/>That is the beauty about forecasting. Anything could happen. You might be right (previous lows are not a trend). I might yet be right (a 25 percent fall by 2012).<BR/><BR/>Why don't you give it a shot. Where do you think prices will be?<BR/><BR/>Thanks for the comment.<BR/><BR/>AliceAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-38022364301040733492008-11-11T17:36:00.000+00:002008-11-11T17:36:00.000+00:00I don't understand why the house prices must go th...I don't understand why the house prices must go the previous lows. The previous lows are not the trend to me. The trend is the line going through the middle on your chart. Please help if I am missing something.Colin Brazendalehttps://www.blogger.com/profile/06125192812295890840noreply@blogger.com