25
Nov
2009
Taking stock of house prices
Real house prices bounced on cue after falling back to the post-1957 trend but the reality is not that neat.
read more Commentary by Stuart FowlerPosts tagged as house prices
29
Nov
2008
My dire warning for FT readers in 2004
In January 2004 I wrote the FT’s Personal Money front page in the days it was a broadsheet section of the weekend paper. The headline was ‘Time to put a ceiling on our money illusions’. The angle was that the rise in real house prices was something to worry about, not boast about. My analogy for the eventual correction was Japan. Here’s what I wrote:
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23
Nov
2008
Update on real house prices
Readers familiar with our measure of real house prices relative to trend will know that this peaked at a level very similar to two previous house price cycles but then remained there for much longer than in the past, propped up by easy money, as neither policymakers nor bankers saw the danger signals. After 12 months of falling real prices (through September) the ratio is down from 132 to 112. This is not much consolation as real prices are likely to fall well below trend before recovering. Read more to see the latest graph.
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10
Sep
2008
Another bit of housing nonsense bites the dust
The US Government’s de facto nationalisation of Fannie Mae and Freddie Mac ought to be the coup de grace for the UK Government’s misplaced ideas about mortgage finance and the housing market. As Chancellor, Gordon Brown liked to blame the historical cyclicality of the UK economy in part on the housing cycle and in 2003 commissioned reports from David Miles (on the supply of long-term fixed-rate financing) and Kate Barker (on the supply of new housing stock). Both reports were predicated on Brown’s belief that a market failure existed because of supply problems and he got the answers he was looking for.
read more Commentary by Stuart Fowler
05
Jun
2008
Updating real house prices
The Nationwide house price index through June shows a decline of about 7% from the peak last autumn. This is being reported as a significant correction but viewed from the perspective of the long history of house prices relative to general inflation, it is only another small step in the market’s four-year defiance of gravity since deflated house prices first peaked relative to their long term trend. Without the oxygen of credit, prices have held up remarkably well but market psychology has changed far more than prices yet indicate. The bear market is about to begin in earnest.
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