Meanwhile, ITEM Club says recent house price rise is a false dawn
Today the Item Club released a special report on house prices that suggests a further fall in the first half of next year.
It sees the recent rise as a false dawn and says it will be another five years before prices get close to the peak they reached in 2007.
Like many others the ITEM Club suggests that the current buoyancy is down to a shortage of stock on the market and that unemployment rising will put downward pressure on the market.
“A small number of cash-rich buyers have supported prices, but the supply of these funds is limited, which means prices are likely to dip again in the first half of next year,” says Hetal Mehta, Senior Economic Advisor to the Ernst & Young ITEM Club.
One thought on “Meanwhile, ITEM Club says recent house price rise is a false dawn”
Brian,
interesting to hear what the Item Club have to say but I think the movements in house prices appear to have caught a lot of people out so far. RICS were predicting a 10-12% fall this year and then revised it to a slight positive, quite a revision.
Unemployment rising to the 3 million mark into next year would be expected to lead to a sharp fall in house prices but the apparent lack of supply of housing in the Greater London/South East regions combined with increasing credit availability (although still at relatively low levels) could offset this at least partially and we could see house price falls limited.
If unemployment rises above the 3 million mark, that could act as a trigger point for a crisis in confidence, a fall in spending, fall in house prices and the dreaded double-dip.
Noble
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