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Walls come tumbling down!!!

Walls come tumbling down!!!

Old Feb 26th 2004, 5:06 am
  #16  
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Originally posted by Britfrombristol
Merlot,

Could you share the website address where this article came from. I'm returning from the US to the UK and seeking inspiration re the property market!

Thanks v much
Unfortunately there is a great deal of conflicting information regarding the housing market. Hot on the heels of Merlot's post comes a report published today from the Nationwide saying that house prices have risen by 3% during February; the highest rise for two years. The average house now costs £138,730.

In addition, a European Housing Review published by the Royal Institution of Chartered Surveyors concluded that UK house prices would not fall, but would experience a gradual deceleration in increases, due to shortages of property and high levels of income which would prevent an early 90s-style crash occurring.

If the experts can't agree, it's very difficult for anyone else to comprehend what's going on.

Keith
 
Old Feb 26th 2004, 7:33 am
  #17  
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Originally posted by Keith & Val
Unfortunately there is a great deal of conflicting information regarding the housing market. Hot on the heels of Merlot's post comes a report published today from the Nationwide saying that house prices have risen by 3% during February; the highest rise for two years. The average house now costs £138,730.

In addition, a European Housing Review published by the Royal Institution of Chartered Surveyors concluded that UK house prices would not fall, but would experience a gradual deceleration in increases, due to shortages of property and high levels of income which would prevent an early 90s-style crash occurring.

If the experts can't agree, it's very difficult for anyone else to comprehend what's going on.

Keith
And experts potentially have their own vested interests

"The Economist" has also been looking at this issue. Although it says UK house prices are at risk [of falling], it seems to see Oz prices as a much greater risk - because most of the demand has been driven by people buying invesment properties (ie 2nd, 3rd 'homes'). And the real demand in many places is not there. As an ominous sign, I recently found out that the flat I rented in Sydney 15 years ago is on the market for the same rent as I paid back then - so in 'real' terms, it is a lot lower
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Old Feb 26th 2004, 8:47 am
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Originally posted by MikeStanton
And experts potentially have their own vested interests

.....
Yes, it is very difficult to interpret all of the conflicting reports. You have to take into account the source of information, and whether they are "objective" (what building society in its right mind will say the bottom is falling out of the market?). Also, it's often not clear exactly what statistic they are using. For example, take the imaginary headline: "House price rise slows down" - you could take that to mean that although things are slowing down, prices are still rising, but at a slower rate. But what if the data are a 12-month change (i.e., a rolling 12-month average)? So, December 2003's data are the change between Dec 2002 and Dec 2003, etc.

Now let's say that a house bought in Dec 2002 for 100k increased in value/price by 2% a month from Jan to Aug (i.e., from 100k to 116k), but then DROPPED 1% a month from Sept to Dec (i.e., from 116k to 112k). The rolling 12-month change in prices is therefore +12% (from 100k to 112k), BUT in fact, prices are actually DROPPING - so the headline "price rise slows down" is misleading (but very convenient for mortgage brokers and estate agents).

With all the shenanigans being unveiled in the business world over the past 3 years, it would not surprise me in the least if most of these building socs, etc., are either faking/fudging the data or "lying"/concealing with statistics in the way I just described.
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Old Feb 26th 2004, 9:31 am
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Originally posted by MikeStanton
And experts potentially have their own vested interests

"The Economist" has also been looking at this issue. Although it says UK house prices are at risk [of falling], it seems to see Oz prices as a much greater risk - because most of the demand has been driven by people buying invesment properties (ie 2nd, 3rd 'homes'). And the real demand in many places is not there. As an ominous sign, I recently found out that the flat I rented in Sydney 15 years ago is on the market for the same rent as I paid back then - so in 'real' terms, it is a lot lower
That is my experience as well in the Eastern Suburbs rental market. Rent is the same as 1997 and there are more and better quality units available. A few more rate rises and it could turn very ugly.

Everyone is hoping for capital growth but when they all sell up to fund their retirements who is going to pay the money. There is a demand from 1st time buyers but they are priced right out of the market.
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Old Feb 26th 2004, 10:07 am
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Originally posted by bondipom
That is my experience as well in the Eastern Suburbs rental market. Rent is the same as 1997 and there are more and better quality units available. A few more rate rises and it could turn very ugly.

Everyone is hoping for capital growth but when they all sell up to fund their retirements who is going to pay the money. There is a demand from 1st time buyers but they are priced right out of the market.
And it may get even scarier. Over the past 2 years, Oz has had one of the highest GDP growth rates in the world. But most of that was driven by housing investment. When the interest rates go up (which they will, to control inflation), the potential collapse in prices, which BondiPom mentioned - could cause a big contraction in general spending - and a possible local recession. I think the next 2 years are going to be interesting times for the Oz economy
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