Based on Nationwide's inflation-adjusted time series, here are the quarterly changes in the average house price, starting with Q1 1989 (red) and Q1 2007 (blue), click to enlarge.
NB, the February 2010 figure is already about one per cent lower than the December 2009 figure (so those who missed the end of the SDLT 'holiday' have missed nothing), so I'm assuming that the next bar in the blue series will be negative again.
PS, that chart just shows the first four years of the post-1989 crash, prices drifted downwards another couple of per cent over the following two-and-a-half years before finally bottoming out.
Local Council Efficiency
3 hours ago
10 comments:
Where are we on the 18 year cycle, then?
B, the 'Fred Harrison' peak was late 2007, so we've at least another two or three years of prices drifting downwards.
So those bars are cumulative?
B, no, they are quarter-on-quarter changes. The figures for this time round are flattered by the fact that this government has done 'everything it takes' to prop up the bubble, by slowing down repossessions, cutting the base rate, reinstating mortgage subsidies for the unemployed etc etc.
What the figure do not take into account is that this bubble (relative to earnings) was twice as big and lasted twice as long as the previous one.
I can't say I particularly enjoyed the late eighties, early nineties paying 15% on a large mortgage, on the other hand the property rose in value, swings and roundabouts if you didn't sell.
Is the present rise in values a factor of brilliant economic policy or massive quantative easing shortly to end? We shall see but I'd be surprised if we aren't back in megative growth at the end of the 1st quarter.
SB, me neither, I'm in no hurry to buy.
I'm still not clear what the bars represent,e.g.does the Q1 bar represent a 1% rise in prices from the start to the end of that quarter and then the Q2 bar represent a 2% rise on the prices at end of Q1 and the Q3 bar a 1% rise on the prices at end of Q2 and so on,
(that's what I meant by cumulative), or does each bar represent a rise from the baseline established at Q0 (which would mean that the "rise" in Q3 was actually a fall?
B, the blue Q1 bar means that prices at end Q1 1989 were 1% higher than Q4 1988; in the next quarter prices went up 2%, in Q3 1989 they went up another 1%, in Q4 1989 they were flat, and from there on in it was quarterly price falls all the way.
So what we are "enjoying" at the moment looks like "the dead cat bounce"?
B, I would assume it is a dead cat bounce - and remember, as I said above... "the figures for this time round are flattered by the fact that this government has done 'everything it takes' to prop up the bubble, by slowing down repossessions, cutting the base rate, reinstating mortgage subsidies for the unemployed etc etc."
So there are going to have to be 3% or 4% quarter-on-quarter falls for the next year or two just to catch up with where they would have been had our government not adopted openly Home-Owner-Ist policies.
But I might be wrong...
Post a Comment