Friday, 3 April 2009

Halifax or Nationwide - who do you believe?

We have a slight difference of opinion; the Nationwide say that UK house prices rose in March; the Halifax say prices fell.

From their peak, the Halifax estimates that prices have fallen 22 percent; while the Nationwide put the decline at 19 percent.

(just to clarify, both series in the above chart use non-seasonally adjusted data).


Anonymous said...

No downturn is a relentless line of negative MoM numbers.

I believe they're both reasonably accurate within their samples - they simply rely on different samples with regional bias.

I suppose you could graft them together on a pro rata basis to create a NW/HBOS index which should be mirrored by Land Registry stats with a 3-4 month lag.

But basically, if every index (barring asking prices like Rightmove) have posted a clear downward trend for 16+ months it's pretty clear that the trend is down.

1. There are lots of + months even in bad bear markets;
2. Indices have varying sample profiles and are regional;
3. They all say the trend is down;
4. Eventually they'll all start to get more volatile as the bottom starts coming in.

Cheer, Haggis

Mark Wadsworth said...

What Haggis says.

It's "whom" actually.

Anonymous said...

My guess is that the Halifax's index, always about 15% higher that Nationwide's, is based on a more upmarket mortgage book. First time buyers show more in Nationwide's index; it looks to me as if they are rushing in prematurely.

B. in C.

Anonymous said...
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dearieme said...

To measurement accuracy those charts are identical.

klara said...

Once Gordon Brown has pumped CPI up to around 15% nominal prices will stabilise.

We have been told in so many words that there is no longer any inflation target. The goal now is a 1990s style crash where nominal falls are quickly replaced by less obvious real losses.

Savers and fixed income pensioners are expendable casualties according to Brown. The rationale being HPI = consumer spending = jobs = votes

QG said...

Quote from a recent independent article by Jeremy Warner:

"The housing market is so illiquid right now that a relatively small number of transactions can easily distort the monthly figures one way or the other."

I think that's all you need to know. The house price trend is still downwards and will probably stay that way for a few years.

Boy on a bike said...

The Dr. Housing Bubble Blog had an explanation the other day about how a similar thing has been seen in US indicies. Their take was that all the really low priced houses had been mopped up, and the market was now moving on to higher priced repossessions (or something like that).

The absence of the really low priced trash from sales was bumping up the mediam sales price, but the homes on sale were still 40-50% down from their peak.

I think you will have to read the original post - I am too hazy at 5am to make sense.