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ecoface

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Everything posted by ecoface

  1. Thanks for this link. For other's benefit (who I might add in the last 24 hours have not really digested the difference between nominal and real falls: Since February 2010 asking prices for homes in England and Wales have increased 0.9%, which is in line with seasonal fluctuations. Nominal market house prices continue to be stable, although they are still falling in real terms, when corrected for monetary inflation. Comparing ONS’ June figures and the YoY change in asking price figures for the same month shows that asking prices were trailing by 5.5% relative to the RPI (ex. housing) and ca. 2.0% below the AEI (April figure from ONS excluding bonuses). The HAPI for England and Wales now stands at 97.9 [May04 = 100]. How about that? For the last few years each quarterly figure, INFLATION adjusted, has been -5% to -10%. If you are looking for falls, then look at the INFLATION adjusted figures. QE will keep nominal falls from bombing out. In November the Home.co.uk report states: Asking prices are still falling in real terms. When corrected for monetary inflation, property remains a poor store of capital value as compared to commodities or gold. Comparing ONS September figures and the YoY change in asking prices for the same month shows that asking prices were still falling in real terms, by 4.9%, relative to the RPI (ex. housing) and ca. 2.2% below the AEI (August figure from ONS excluding bonuses). The HAPI for England and Wales now stands at 97.6 [May04 = 100].
  2. I'm not a bull, but... Look at previous Autumns (pre 2007) before we get too excited. I would also like to add something to this thread in that I am absolutely staggered no one seems to have mentioned. Small house price falls and increases are pretty meaningless IN REAL TERMS adjusted for inflation. I keep having this beef with associates and friends who look at me blank in the face, I think, because they are so used to CPI and RPI at less than 2% for the last 10-15 years, so they don't understand the impact of 5-6% inflation will have on house prices. I personally think that QE will keep NOMINAL falls from snowballing. But in REAL terms those falls will look very bad. Do any of you have any indices that show house prices in real terms?
  3. Not necessarily. Notwithstanding the housing recession, for about 5 years there has been a gradual shift towards building to rent, with commerical property developers coming onto the turf of the housebuilders, and doing JVs with large pension funds and institutional investors, to own more rented stock. The level of rented stock in the UK is much lower than in Germany for example, and there is an undercurrent and structural shift to move towards the latter's model. Why not have more rented stock? It can take decades to create such a change. The seeds of this were planted well before 2007. Institutions and pension funds will not buy or develop UK resi property unless the portfolios are very large, for obvious transactional reasons. Having housebuilders build them, with their finance, is entirely logical, if your investment horizons are say 20-40 years, as they are not looking at 1-5 or 5-10 year cycles.
  4. Barratts, Taylor Wimpey, Persimmon etc. all up sharply yesterday. Why?
  5. I wouldn't compare them, just be pleased with 3.2% increase, like you shouldn't compare gold with silver; they are different products. I think we can be relatively sure that we are in for a volatile month or so.
  6. Can you update us on Monday after we know the results of this meeting?
  7. Cheated. I took a spread bet on it so didn't buy the product itself. Asian markets are look troubled this morning and with Option expiry today too, it bodes well for volatility. All we need now is for a dollar rally and this will kick off mess everywhere. Evilspeculator sees VIX as being a SELL trigger now too. VIX chart
  8. Well, I took a small position on VXN this morning! All the volatility indicators are at the bottom of their channel and we should get a fairly aggressive/ strong move up or down IMO. Currently, it's gapped up so looking good.
  9. Yes, very marginally better; it went from 15.5 to 48.9, whereas VIX from 15.2 to 48.2.
  10. RH, Have you traded VXN, or have any views on this and its disadvantages relative to VIX? Cheers.
  11. Right... here's today's speech from Grant Shapps, on this issue of affordabililty. From a housebuilder's perspective, there is nothing new in what he says and frankly making Building Regs more fluent, will have hardly any impact on the main issue which is the pathetic planning system. HousingMinister12thOctober10 Grant Shapps urges house price stability to help wannabe homeowners Published 12 October 2010 Housing Minister Grant Shapps has today made the case for a period of house price stability to prevent generations of potential homebuyers being priced out of the market. In a speech to the Housing Market Intelligence conference in London, Mr Shapps argued that buying a property should not be seen only as an investment, but as a home to live in. He said: "With a house now liable to cost perhaps seven times someone's earnings, it is no surprise that the average unsupported first time buyer is 37 years old. This country is in danger of letting down the aspirations of a generation of homes do not become more affordable in the long term. "So what is required now is a period of house price stability. A home should first and foremost be thought of as a place to live and bring up a family." The Minister also pledged Coalition Government support for housebuilders, by cutting through the 'alphabet soup' of standards and red tape that blight efforts to get developments started. He called on industry leaders to work with Government in a new drive to simplify the system. This work will complement the ongoing review of building regulations launched by Communities Minister Andrew Stunell earlier this year, and is in addition to the groundbreaking new 'One In, One Out' system where ministers seeking to introduce new regulations that will impose costs on business have to first identify current regulations of equivalent value that can be removed. Grant Shapps said: "Last year, housebuilding hit its lowest level for any peacetime years since 1924 as developers have been hampered by regional targets that put them in direct conflict with local communities and an alphabet soup of regulations and red tape they have to navigate. "Today I have a clear message to housebuilders large and small - we are on your side. I am determined to make it easier to build the homes this country needs. Appropriate building standards, applied sensibly, help developers and communities alike, but they can only be effective if they are easier to understand. That's why I want to simplify the process for housebuilders to meet the standards communities demand. "But I also want to make it easier for these companies to complete new developments where they are wanted. That's why we will introduce powerful new incentives so those communities that give the green light to developments see the benefits of the new homes in their area." and this is his speech on cutting red tape for housebuilders LessRedTape??!!
  12. Wow; that's bullish, whichever way you look at it, and even from the lows.
  13. I watched this last night too. Jon Snow the C4 presented grilled Grant Shapps, the Govt housing minister, after the report. The latter recognised the crowding out by BTLers, for sure. Jon Snow asked him what the Govt was going to do about it.... The response was pathetic. All Shapps really said, as Gordon Brown did in 1997, that we can not let house prices get out of control and return to the boom bust scenario etc. This will be music to the ears of Fred Harrison followers - oh how the cycle repeats! So it sounds as though no measures will be put in place to curb BTLing. There are some very siginificant policies coming through in the next few months that will affect housing in general. Firstly, on 20th October, and then with the Localism Bill in November (although won't get Royal Assent until next summer). These will underpin the investment in new build and regeneration and social housing, and indicate how much power will be given to locals in planning.
  14. Nice. My spread bet put on the Halfax Index is looking very healthy.
  15. Me too, and I hate to admit it, but so did RealistBear. I would even go as far as saying your posts in 06 and me reading Fred Harrison's book, saved our business millions.
  16. Can we get a bit of perspective in this thread and compare real house prices with nominal prices? CC touches on this and compares HP to gold, but this is a bit intangible for most (who don't buy food, energy, and are paid in gold). How about comparing HP to the real cost of living. Personally I am similar to CC in that we will see falls, but not a crash. The steepest downward curve will be in real house prices, and nominal will be, just that "nominal". And yes, sentiment is turning. As you may know I am a housebuilder and Chartered Surveyor and without going in too much detail we have just launched a site for sale (lower risk - detached houses in suburbs in Home county). There is absolutely no doubt about it that activity is DOWN in the last 2-3 weeks. I recently have spoken to 4 agents from solid respectable firms who I have known for many years and are not bullsh**ers. Their take-ons, phone calls, viewings have dried up. Last weekend was dead. To quote one "it's like the tap has just been turned off". Offer's being made have the cushion in them of around 5%+ plus below marketing price. I asked (as I am sceptical of most agents) if this was just their gold-fish bowl comparison to record levels in June-August as some agents around here have had. With the answer being not at all, and that it is most like the early days in Winter 07/08. The agents think that their cash flow until Spring will be extremely tight; and this is what they are planning for. So, coal-face or not, the view is whether or not we are dipping into a early seasonal market, or if this is more sinister. I remember the Autumn-Winter of 2005-2006 very well when we all got very nervous about a similar drop off of activity, and then BoE tinkered with rates and dropped them, which facilitated the winners-curse in the market. This time round will we get another round of winter QE to inject more contradictory asset inflation? I do think that QE2, or is it 3 (?), will keep the market sufficiently above water for nominals to not go anywhere south too much in the next year - again though, keep an eye on real prices.
  17. ecoface

    UK House prices: News & Views

    Good poetry - do you mind if I use that line?
  18. ecoface

    UK House prices: News & Views

    Phase 2 of the HPC in US is gathering momentum. This is shocking TBH: Re Sets on Mortgages Concluded with: Adding all of these together, we come up with a total of roughly 6.97 million residences that are almost certainly going to be thrown onto the resale market as distressed properties at some point in the not-too-distant future. This massive number of homes will put enormous downward pressure on sale prices. To believe that prices are firming now is to completely ignore this shadow inventory. Ignore it at your own risk.
  19. ecoface

    UK House prices: News & Views

    I think sooner or later people will be thinking in terms of real (not nominal) falls. In real terms with cpi at 5% and rpi at 3%, a nominal 0% is x? (in the UK of course).
  20. ecoface

    UK House prices: News & Views

    Lol A few young arsonists from the neighbouringvcouncil estate have been arrested for setting a timber frame block on fire. That's all. I like you're thinking because I too initially thought that, so researched more. I know a lot of the housebuilders in the area and was intrigued and unfortunately there's nothing suspicious here - just a sad example of twat youths with nowt to do and v sadly preventing much needed council houses being occupied for local people.
  21. ecoface

    UK House prices: News & Views

    Wrong, sorry!!! This site is a social housing site, not private. Best not to spread rumours eh.
  22. RH, I think these two charts are good for the 70s. We've seen them before. The inflation adjusted is better for comps of the bull market. MonthlyGold 1970s to Aug2010
  23. ecoface

    UK House prices: News & Views

    Sort of agree - historically 2.5% is half the 300 year average of 5%... ...but 2.5% on massive amount of debt, is a lot worse than 5% on less debt. I used to have a similar debate with property bulls in the boom years when they said rates "are so low", and they couldn't see my view that it is not solely about the rates per se, but the rate in relation to the size of the loan or debt. The cost to maintain the debt will be grotesque at 2.5%, because the debt is obscene. Similarly, a rise from 0.25% to 2.5% is 900%. 0.25%/ 250 basis points to 5% / 500 basis points is only 100%. I think it works this way? Basically the point I'm making is that a rise from a low level should theoretically have more of a disproportionate impact than the same rise from a higher foundation.
  24. ecoface

    UK House prices: News & Views

    I could understand Persimmon or Berkeley, or even Barratts, but T-W??
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