Yesterday, we had the Nationwide report that house prices fell by 2.5 percent. Of course, that is a nominal decline. In many respects, it is more interesting to look at the change in house prices adjusted for inflation.Since last summer, real house prices have fallen by almost 11 percent. Here the comparision with the US slump is revealing. The latest S&P/Case-Shiller national house-price index, published this week, showed a nominal price slump of 14.1 percent over the past year. In real terms, US property prices have fallen by a staggering 18 percent over the past year. By the middle of this year, the UK market could easily match that figure.
(data: RPI data for May is not yet available. I projected May inflation by assuming that prices would grow at the same rate as April.)
11 comments:
That chart is just shocking. The crash is faster and deeper than anyone could have anticipated.
I anticipated that it would be faster and harder in the UK. (Ooh-er...)
There's still time, I suppose.
it's hard to believe that the UK won't have a pretty good slowdown when house prices are falling that fast.
And what about writedowns. I would think institutions like Nationwide and HBOS will be asking for more money in rights issues.
Amen, sister!
Inflation-adjusted UK house prices have been falling at annualised rate of 16% since last October, workings here.
Will the very last estate agent to close please turn off the lights.
Thank you.
10 percent this year, 10 percent next year, and 10 nore after that.
It is amazing how quickly sentiment has changed. One year ago, everyone was expecting a booming housing market. Today, it is a distant memory.
In real terms, prices have just fallen off a cliff.
http://news.assetz.co.uk/articles/4204.html
I love this stuff....
Tried adjusting for NAEI?
And there may be a disconnect between mid-priced and top-priced houses, as the rich get richer.
Gomen kudasai.
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