not much time left for oxford think tanks prediction
News Posted On: 17 November 2009
At the beginning of August the think tank Oxford Economics (OE) predicted t hat residential property prices in the UK would fall by 12.2%. Their prediction was for the real estate market not to stabilise until 2011. In a report prepared for the National Housing Federation (NHF) it forecast a further fall in prices of 4.6% in 2010, an increase of 1.1% in 2011, and that price growth thereafter would produce a 20% rise by 2014.
The NHF said the OE research showed that some homeowners could be stuck in negative equity for at least another five years as the property market struggled to bounce back. It believed the OE was presenting a realistic outlook.
'The research shows that while house prices are falling in the short term, they will inevitably increase in the long term because of a fundamental under-supply of housing,' David Orr, chief executive of the NF said at the time.
Fast forward three months and the Halifax had reported UK house prices rose by 1.2 percent in October.
More relevant to the Oxford Research prediction was the fact that the year on year price decline had dropped to 1.5 percent, and Halifax was actually predicting annual price increases to show up in the coming months, due to constricting supply and increasing demand.
Meanwhile the Nationwide had already posted six consecutive months of rises to October.
Obviously we await with baited breath the house prices numbers for the last two months of the year from both lenders, as we enter the traditionally slack winter season.
However, with only five house buying weeks remaining until Christmas one has to wonder how likely it is the market can now supply the greater than ten percent fall necessary to prove the boffins at Oxford correct.
Of course Oxford Research are not the only group apparently caught out by the rallies in the stock markets, commodities and real estate following the crash of 2008. Many were erroneously seeing deflationary pressures in 2009 despite the blatant rampant increase in money supply due to 'quantitative easing'.
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