Comments on: Housing market recovery not until 2023?

By: Mark

Mark — Fri, 31 Oct 2008 07:54:26 +0000

Looking back over the last 40 years or so, periods of real house price growth (relative to RPI) have been followed by equally long (or short) periods of real negative growth. This time round, we’ve had about 12 years of real growth, so we could now get 12 years of negative real growth.

This talk of prices bottoming out in a year or two takes no account of what’s happened in past slumps - in the 90’s it took about 7 years peak to trough, so why do people think it’ll be only three years this time round? Short memories.

By: Dylan Summers

Dylan Summers — Thu, 30 Oct 2008 15:26:12 +0000

TheTruthIs: “No one can possibly predict such a skewed resolution and it is folly to try to pretend that we know more than the markets do.”

Unfortunately, if you read the article again you’ll see that Mr Clare draws his conclusion FROM the markets: The level at which traders are buying and selling futures contracts based on the Halifax house price index.

So if you think the situation isn’t as bad as this, you’d better be hoping that the markets are wrong!

By: mammachou

mammachou — Sun, 26 Oct 2008 14:10:45 +0000

Property will never again be the investment vehicle it has been and we will have to accept it.
The government can’t keep supporting mortgages through tax payers, in particular those on low and modest incomes much further why…?
money will start to flow out and away, already elderly people unload their cash to avoid paying care costs, there is always a reaction when you lean on a section of society in this way.
They will have to look at building new council houses(call them affordable or starter homes with part ownership if you like)
why…?
Because unless they accept the changes to the housing market and and that all can’t afford to buy even at reduced prices they will be voted out and this seems very likely anyway. There are many people now on low and modest incomes who will react at the next vote and this does not seem to have been really been considered.
outcome - less pressure on the housing market to overheat.
The jobs market will be in trouble too, with an economy based on service we might become the sick man of Europe again.
answer… no more easy credit no matter what the economy is asking
decent interest rates for savers, secure (gaurenteed) properly risk factored and above inflation.
The FSA restructered so it is what it says on the tin. No more sloppy operations, what has happened in not new, thousands of pensioners lost their savings 2002/3 and watched while fat cats had huge salary incresaes and golden handshakes…wasn’t that a sign of things to come?
winners…
landlords and rent but not with the capital property gains they have enjoyed so far, more like the 1960’s or the continent.

By: Eugene

Eugene — Fri, 24 Oct 2008 16:30:26 +0000

Cycles seems to be sharper and faster. Although the economic prospect is looking pretty dire - whitch justify why prices are expected to fall 40% peak to through - I think that the current pessimism for long term house prices is exacerbated by the recent events. The banks might well suffer a while, but when credit is unlocked again - although credit will not be as available as before - price should catch up. If the credit situation improve soon enough - and recent government measures could contribute to it - prices might not fell 40% as currently predicted. I also think that price might peak up slowly after they bottomed out, but they will accelerate faster and sooner than anyone is expecting right now, particularly because of interest rate level. So forget what you’ve lost already, there is nothing to do about it. Instead, work on being ready when new opportunities will come, as this might be sooner than expected.

By: Leo

Leo — Fri, 17 Oct 2008 18:42:29 +0000

Hmmmm…. not sure if people are keeping an eye on what is happening in America at the moment but they are pretty well spent, which is going to affect us all in a way we cannot imagine. There is no use comparing this with previous recessions as this is going to be far bigger than anything we have ever seen. Credit default swaps will just be the start.

By: Matthew

Matthew — Wed, 15 Oct 2008 23:39:41 +0000

House prices will bottom out in about 2010/2011 at about 25% below current levels. I think there may be a bit of an upward blip for the London Olympics. The utter naivete of world leaders in not recognising (or if they do recognise it, not saying) that the whole credit crisis is caused by people of the Western world living on borrowed money they cannot afford to repay, does not augur well for the future. Be that as it may, the “real” economy will continue to give them all (and unfortunately the rest of us) a good hiding for quite a few years to come.

By: Andy

Andy — Wed, 15 Oct 2008 15:30:30 +0000

Interesting comments.

“…the Mr Brown strategy was adopted and played out..”

Indeed it was. And now we all have to face the consequences while HE plans how he’ll spend the pension that WE will pay for.

By: TheTruthIs...

TheTruthIs... — Wed, 15 Oct 2008 15:14:46 +0000

Mr Clare is way off the mark here. No way is he right, unless his crystal ball is made of mud! No disrespect intented here.

I predict a kind of normality to return within two years. Things happen quickly these days - everything including models and markets have changed totally - and no one can underestimate this factor..

No one can possibly predict such a skewed resolution and it is folly to try to pretend that we know more than the markets do.

Despite the turmoil we must remember one salient and paramount fact: the Mr Brown strategy was adopted and played out and this will, without doubt, make this financial catastrophe short-lived.

The world is a different place from the 1920’s: measures that are inherently stabilising and effective have been taken and are already starting to kick-in with notable effects.

It is not at all appropriate to add two and two together to make five, especially when we need to strengthen the person in the street in their financial hopes and beliefs.

By: Maggie

Maggie — Wed, 15 Oct 2008 15:09:18 +0000

Things will not recover until people feel secure in their ability to pay the mortgage. No matter how cheap the loan or house stability in employment is essential. We need to bring back agriculture and manufacturing and give ordinary working people the means and independance to enjoy a life style and achieve a mobility now lost.

By: David

David — Wed, 15 Oct 2008 13:24:42 +0000

If it was just the lack of mortgages then I think we could have a quick recovery but now we are heading into a global slowdown we are going to see much lower prices for a lot longer. The only positive side is that there is strong demand for housing and increasing rental returns.
This is assuming there is someone with a job who can pay the rent.