I’m long past taking any notice of experts’ predictions for house prices each year. Because they are always wrong.
But one source in particular is the wrongest (sic).
In 2010, the ‘leading’ macro-economics research company Capital Economics stated that house prices would drop by 5% that year.
In 2011 and 2012 it stuck its neck out still further and foretold that the market would sink by 10% in each of those years.
And now, come 2013 it is soothsaying that the price of your house will drop 5%.
That’s a wheelbarrow of doom which totals 30%. A devastating house price crash that would see repossessions rocket and banks’ bad debt put the bankers out on the street together with tens of thousands of home owners.
Capital Economics cite unemployment, economic uncertainty, the Euro crisis and weak GDP growth in the UK as ‘reasons’ for their prophecy.
But these conditions have prevailed since 2008 and, quite obviously, if there were to be a meltdown in the housing market, it would have happened by now, given financial events since then.
Now, maybe CE are shorting property shares? That would figure.
But the truth is that since 2010, the average UK property has weakened in value not by 30%. Or even 20%. Or 10%.
But by 4.5% (Halifax). A drop, yes. But not a plummet.
In 2008 I was very critical of a media that sought to bring about a self fulfilling prophecy in wheeling out any obscure commentator that was suggesting ‘house price Armageddon’ etc.
The media have softened their negativity now in the face of common sense.
If only Capital Economics would have a coffee and do the same thing….
Russell Quirk is founder of eMoov.co.uk, now the largest online estate agent in the UK