7.30 am suits me.
Do you see a low in UK housing coming soon?
Next week Friday....: 7:30 am, London time, or
Next week Saturday: 9:30 am, London time,
I am hoping for a much larger participation, especially if we move it to Saturday.
Do I expect a low? Answer: I am expecting a decent bounce in UK Property, which will fool many people
into thinking that they are seeing the low. But I have several reasons for thinking that it would be a dangerous
"dead cat bounce", that could be very dangerous for one's wealth. Many will get sucked in, I fear.
=== CHARTS =====
C# 1 : UK House prices ran ahead of trend... again
C# 2 : Housing is a Cyclical market
C# 3 : 18 year Cycles go back a long way
Peaks in Property
1973 -16 (1948 +18= 1966, stretched by WW2)
1946 (2 years before the UK)
C# 4 : The Pattern show the 18 year Cycle peak is in place
C# 5 : The peak was preceeded by a top in Builder stocks 9 months earlier ... Spline's website
Most representative share price = Barratt Development (BDEV.L) ... update
C# 6 :
In an parallel attempt to decipher the cyclical influences I have put the Nationwide Quarterly data
on a Logarithmic scale, so it is easier to see dips in a long term context.
Raw Data source: http://www.nationwide.co.uk/HPI/downloads/..._since_1952.xls
Over this period (1952 to 2008) Prices rose from Pds.1,891 to a Pds.184,131 peak in Q3.2007.
The latest price for Nationwide "All Houses (UK)" was Pds.174,514 for Q2.2008
L#1: Qx.1957 (- n/a -): 3.268 : Pds. 1,853
L#2: Q4.1968 (+56 q): 3.650 : Pds. 4,089
L#3: Q4.1981 (+52 q): 4.377 : Pds 31,557
L#4: Q4.1995 (+56 q): 4.707 : Pds 50,930
L#5: Q4.2008 (+52 q): 5.10E: Pds.126,000 (a fall of 31.6% from 184,131 high in Q3.2007)
L#6: Qx.2022 (+56 q):
Interestingly, this provides a different cycle (of 13-14 years between lows) and different future low points than Harrison's work.The projected Low of Pds.126,000 in Q4.2008 is only a guess based on trendlines.
The timing assumes 13 years (52 quarters) from the prior low of Q4.1995.
The important long term trendline is near Pds.170,000 in Q3.2008. That is less than a 10% fall from the Quarterly high, and has been broken already, I believe, if we used July prices.
It is possible that we may see an "early" low in 2010-11, a brief "inflationary bounce" as Catflap has described and then the 7-year mini-recession may come along with the 13-14 year cycle low that I have described here.
We will have to watch carefully what measures the government takes to prop up a rapidly deflating property bubble.IMPORTANCE OF THE BUY-TO-LET BRIGADE
C# 7 : Winners Curse prices rises were driven by the BTL brigade, pushing yields below 4%
Different Ratios, based on different statistics?
C# 8 : Wise-up BTL-ers, it's over now
You boys (and girls) are losing cred every day
= = = = =
C# ? : YOU GOT IT WRONG, if you bet on a 16 year Cycle in the UK
C # ? : But later, using the Builder Bellwether Index, I nailed the top in July 2007
"Affordability is extremely stretched. Traditionally, it was FTBers who kept the property game alive. In the past, they would account for 25-30% of property purchases. But as prices rose out of sight, with an approximate 10% rise in the past 12 months, after almost tripling in the decade before, most potential FTBers can simply not afford the prices anymore. Their share of property purchases has now fallen below 10% of property sales. Meantime, investors and the super-rich have stepped in and bought with enthusiasm. And high-end properties favored by the super-rich have risen much more than middle tier and cheaper properties. Some observers estimate that top properties in areas like Kensington and Chelsea are up over 30% in a year.
Incomes have not kept pace...
Hometrack announced in the past few days that the number of properties on offer in London has suddenly jumped by 10.9 percent in June, as compared with May. That is the biggest single month rise since January 2005, when the big jump in supply triggered a pause of more than six months in the property market. Another indicator that I particularly like is the price of traded Builder shares. Normally, this will lead the market by perhaps six months. In the USA, the builders gave a great early warning (almost a year ahead) that the US property market was peaking. They may be doing something similar now in the UK. The average builder stock peaked around the turn of the year, and is now down about 25-30%.
A similar drop was a good warning in the US. This suggests that UK prices may be peaking out this summer, even in London, where the market had been so hot through the spring."