Americans should brace themselves for at least another year of plunging house prices, two leading Wall Street economists said yesterday.
The slump, they argue, is, at best, only halfway through its cycle, with the inventory of unsold homes continuing to rise.
Carl Weinberg, at High Frequency Economics, said yesterday: “We are nowhere near the bottom at all.”
Mr Weinberg identified two factors that could keep property prices falling: first, the rising number of unsold homes; and secondly, the fact that the number of sub-prime mortgages, which will reset at a higher interest rate, will not peak until the end of the year. It is expected that many of those borrowers will not be able to absorb the rise in repayments.
Kevin Logan, senior market economist at Dresdner Kleinwort in New York, said that the American housing slump - the worst for 16 years – is halfway through its cycle, or not even that, and that demand for property would continue to recede.
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Showing posts with label house prices. Show all posts
Showing posts with label house prices. Show all posts
Tuesday, 11 September 2007
Tuesday, 28 August 2007
Overheating sees house price downturn in Europe
House prices on the overheated fringes of Europe have begun to turn down sharply, replicating the early phase of the sub-prime property slide in the United States.
Housing booms in Romania, Bulgaria, Croatia, and even Russia are all looking stretched to extremes.
Irish property has fallen for the past four months in a row as higher eurozone interest rates start to bite harder, while the speculative bubble in the Baltic states has burst.
House prices in the greater Riga region of Latvia fell 3.5pc in June, following a 1pc fall in May. Flats in the old city became more expensive than Berlin by early this year in a speculative frenzy, much of it with euro, Swiss franc, and yen mortgages that could prove disastrous if Latvia's currency is suddenly devalued - as may well happen, given the country's current account deficit has exploded to 26pc of GDP.
Similar booms in Romania, Bulgaria, Croatia, and even Russia are all looking stretched to extremes. Danske Bank has warned that much of Eastern Europe has been inflated by a "monster bubble" that recalls conditions in east Asia shortly before the crisis broke in 1997.
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Housing booms in Romania, Bulgaria, Croatia, and even Russia are all looking stretched to extremes.
Irish property has fallen for the past four months in a row as higher eurozone interest rates start to bite harder, while the speculative bubble in the Baltic states has burst.
House prices in the greater Riga region of Latvia fell 3.5pc in June, following a 1pc fall in May. Flats in the old city became more expensive than Berlin by early this year in a speculative frenzy, much of it with euro, Swiss franc, and yen mortgages that could prove disastrous if Latvia's currency is suddenly devalued - as may well happen, given the country's current account deficit has exploded to 26pc of GDP.
Similar booms in Romania, Bulgaria, Croatia, and even Russia are all looking stretched to extremes. Danske Bank has warned that much of Eastern Europe has been inflated by a "monster bubble" that recalls conditions in east Asia shortly before the crisis broke in 1997.
more ...
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Check out the rest of this blog here.
House prices hit a standstill
House prices slowed to a standstill during August, according to the latest survey from Hometrack, the property website.
The group recorded the lowest rate of monthly growth since November 2005, with average house prices "unchanged".
London, the real engine for house price growth over the last 18 months, was the only region to record a price increase over August. However, it was a rise of just 0.1pc. Three regions recorded price falls of 0.1pc, namely Yorkshire and Humberside, the North and South West.
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The group recorded the lowest rate of monthly growth since November 2005, with average house prices "unchanged".
London, the real engine for house price growth over the last 18 months, was the only region to record a price increase over August. However, it was a rise of just 0.1pc. Three regions recorded price falls of 0.1pc, namely Yorkshire and Humberside, the North and South West.
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Tuesday, 17 July 2007
Wednesday, 13 June 2007
ABN fears world housing crash
Soaring borrowing costs could spark a housing slump on a 'global scale', investment bank ABN Amro has warned.
Families have taken on 'unsustainably large' mortgages, leaving them vulnerable to the sharp increases in bond yields and official interest rates seen in recent weeks, wrote economist Dominic White.
Britain is one of the most exposed markets thanks to rampant speculation over the past decade, though it is by no means alone.
Claims that shortfalls in the supply of new homes will lead to an inexorable rise in UK property prices in coming decades have 'as much credibility as Britney Spears' latest comeback,' he wrote.
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Families have taken on 'unsustainably large' mortgages, leaving them vulnerable to the sharp increases in bond yields and official interest rates seen in recent weeks, wrote economist Dominic White.
Britain is one of the most exposed markets thanks to rampant speculation over the past decade, though it is by no means alone.
Claims that shortfalls in the supply of new homes will lead to an inexorable rise in UK property prices in coming decades have 'as much credibility as Britney Spears' latest comeback,' he wrote.
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Monday, 11 June 2007
UK property prices move upwards
UK house prices rose 1.2% in April, the Department for Communities and Local Government (DCLG) survey says.
The DCLG index showed the average home cost nearly £210,000 in April.
As in previous months, Northern Ireland and London saw strong gains, with both areas seeing price rises above the national average.
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The DCLG index showed the average home cost nearly £210,000 in April.
As in previous months, Northern Ireland and London saw strong gains, with both areas seeing price rises above the national average.
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Friday, 8 June 2007
It is the British dream to own the roof over one's head. But with the average home now costing £180,000, that that dream is bleeding millions dry
The yen to own one's own home may well be universal, but foreigners arriving in England are reliably taken aback by the extent to which this craving dominates both private and national conversation. At first it seems relatively harmless, an easy-to-caricature national trait, like saying sorry all the time, or making portentous observations on the weather, but gradually it becomes clear that discussions of house prices are always loaded with much, much more: where a person falls in the fine gradations of class, how their achievements compare with those around them, who they are, who they would like to be. All of which goes some way to explaining the anxiety caused when, as is increasingly the case, it becomes impossible to own a home (among the latest statistics afflicting first-time buyers, for instance, is the fact that the average property loan now stands at more than £150,000, up from £134,000 a year ago). Not having a foot on the housing ladder becomes evidence of some kind of moral failure; marvelling at how much wealth a home has accrued on paper both a 21st-century equivalent of being born with blue blood (ie, effortlessly, smugly lucky) and the socially acceptable face of avarice. "The home is our identity," says Kate Fox, author of the anthropological book Watching the English. "We define ourselves by our homes."
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Thursday, 7 June 2007
Britain faces 20-year house boom that will split nation, says report
The long housing boom is causing growing economic and social problems because it has made housing unaffordable for many people, particularly the young, according to a report from a new thinktank, launched today.
Strong demand and limited supply of housing means the problem of affordability is likely to get much worse over the next two decades, said the National Housing and Planning Advice Unit.
The report forecasts that by 2026 the cheapest 25% of houses will cost 10 times the average earnings of the poorest 25% of people. At the moment these houses cost seven times earnings; a decade ago they were only four times.
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Strong demand and limited supply of housing means the problem of affordability is likely to get much worse over the next two decades, said the National Housing and Planning Advice Unit.
The report forecasts that by 2026 the cheapest 25% of houses will cost 10 times the average earnings of the poorest 25% of people. At the moment these houses cost seven times earnings; a decade ago they were only four times.
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New body calls for urgent action over house prices
The next generation of homebuyers could face average house prices that are 10 times their salaries unless the number of homes being built increases, an independent housing body warned today.
Research from the newly-established National Housing and Planning Advice Unit (NHPAU) found that more than a third of non-homeowners think they will never be able to buy.
A further fifth believe it will take them at least five years before they are in a position to take their first steps on the property ladder.
Their pessimism comes as the typical price of a home in the UK continues to outstrip salary increases.
Government figures show that in 2000 the average cost of a home was four times annual earnings.
Steep house price hikes meant that by 2006 the typical homebuyer was looking at a home that was seven times his or her salary.
The NHPAU predicts that this is set to rise again unless supply increases.
By 2026 it estimates that house hunters will be faced with average prices 10 times their yearly earnings.
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Research from the newly-established National Housing and Planning Advice Unit (NHPAU) found that more than a third of non-homeowners think they will never be able to buy.
A further fifth believe it will take them at least five years before they are in a position to take their first steps on the property ladder.
Their pessimism comes as the typical price of a home in the UK continues to outstrip salary increases.
Government figures show that in 2000 the average cost of a home was four times annual earnings.
Steep house price hikes meant that by 2006 the typical homebuyer was looking at a home that was seven times his or her salary.
The NHPAU predicts that this is set to rise again unless supply increases.
By 2026 it estimates that house hunters will be faced with average prices 10 times their yearly earnings.
more ...
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Check out the rest of this blog here.
Wednesday, 6 June 2007
House prices 'still accelerating'
Brighton & Hove has joined Greater London as the place in England and Wales where house prices are rising fastest, says the Land Registry.
Property prices went up by 15.6% in both those areas in the year to April.
In England and Wales prices rose by 9.1% on average, faster than the property inflation rate of 8.3% recorded in March.
The average home in England and Wales now costs £179,935 - £15,003 more than a year ago.
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Property prices went up by 15.6% in both those areas in the year to April.
In England and Wales prices rose by 9.1% on average, faster than the property inflation rate of 8.3% recorded in March.
The average home in England and Wales now costs £179,935 - £15,003 more than a year ago.
more ...
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Check out the rest of this blog here.
Tuesday, 5 June 2007
Buy-to-let brigade could be the joker in the homes pack
In polite circles there is one C-word that remains taboo. Crash. We can whisper it or think it, but anyone saying it aloud faces ostracism from our property-obsessed culture.
We may have to overcome our objections. House price inflation is cooling in England and Wales – but still rising in Scotland and Northern Ireland, although for how long? – and the assumption that property prices can only ever move in one direction may need to be revised.
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We may have to overcome our objections. House price inflation is cooling in England and Wales – but still rising in Scotland and Northern Ireland, although for how long? – and the assumption that property prices can only ever move in one direction may need to be revised.
more ...
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Check out the rest of this blog here.
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