Futures market puts house prices in cash terms down by a third by 2011

Futures market puts house prices in cash terms down by a third by 2011

Punters in the residential derivatives game are putting a very bleak gloss on the direction of house prices. The Tradition Future HPI, which measures future prices against the Halifax (HBOS) non-seasonally adjusted average, puts a value of £137,233 on an average house in June 2011. Given that prices peaked at £201,081 last August, that is a fall of about a third in nominal terms and considerably more in real terms. No wonder the figures tempt the Director of Tradition, Peter…

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Three years of construction recession forecast – is that possible?

Three years of construction recession forecast – is that possible?

My good friend Martin Hewes provided me with a sneak preview of his latest three-year forecast for construction output. It’s not a bedtime read for the faint hearted, that’s for sure. The Hewes & Associates numbers show a recession in construction stretching out for the three years of the forecast period, with a nasty 7.4% drop next year. This places it as the most bearish view yet among the industry forecasts. If this forecast is even near right the industry…

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House prices are falling twice as fast as in 1990 crash

House prices are falling twice as fast as in 1990 crash

I’ll be honest I wasn’t expecting the latest Halifax (HBOS) house price figures to be quite as dramatic as they were – showing a further 2% drop in June. Not that I am overly surprised, but on nothing more than a hunch I had expected the rate of fall in June to ease to between a half and one per cent, partly because falls in the previous months had been so large. But taking the data at face value we…

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Media plays down housing crisis – 160,000 house building jobs to go

Media plays down housing crisis – 160,000 house building jobs to go

Not a headline you might expect. And let’s hope the house building industry doesn’t shed 160,000 jobs, but it is looking ever more likely. First let’s get one thing out of the way. The media is blamed for hyping the crisis we now find ourselves in. To hold that view is to simultaneously seek to shoot the messenger while keeping your head firmly buried in the sand. The media may get it wrong sometimes. The media may misrepresent complex issues….

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Housing rescue plan? What housing rescue plan?

Housing rescue plan? What housing rescue plan?

Caroline Flint has just announced the much talked of rescue plan for the housing market – couched in terms of affordable housing, but in essence an attempt to bolster the crumbling house building sector. It has been welcomed by the National Housing Federation, so it must be good. And I am sure the Home Builders Federation will, through gritted teeth, also welcome the move. See what you think, but to my eyes it appears to be the equivalent of throwing…

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If this is recession – here’s what not to do

If this is recession – here’s what not to do

Given the slew of shocking data and the seemingly inevitable fate that awaits construction I thought it worthwhile casting my mind back to the horrors of the early 1990s and to try to recall the mistakes firms made in reacting to recession. So here is my: Top five mistakes in a recession Go for turnover at all cost – the classic mistake of the early 1990s. Turnover without profit and laden with risk is a burden you may not be…

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If this is not recession – what is?

If this is not recession – what is?

However much you may have been expecting it, the pace of bad news is overwhelming. Back to back, undiluted and dismal. The buyers body, CIPS, today reports on construction and unsurprisingly, given the current wave of shocking statistics, its Purchasing Managers Index for the industry plunged to unchartered depths – from an appalling 43.9 in May to a far worse 38.8 in June (50 represents equilibrium). And in line with other surveys its Employment Index has turned negative. Although this…

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Workload and job prospects crash, confidence plummets – RICS

Workload and job prospects crash, confidence plummets – RICS

A dramatic reversal of fortunes saw confidence in the future of construction workload plunge in the second quarter of this year to the lowest level ever recorded by the chartered surveyors body RICS. The figures suggest that more than 11 years of almost uninterrupted growth has come to a shuddering halt, with a third of firms polled saying that workload fell in the second quarter of this year, compared with just 14% saying workload increased. Recession for construction now looks…

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House prices down 8%, but where is the bottom of the market?

House prices down 8%, but where is the bottom of the market?

The Nationwide’s latest stats for June on house prices confirmed what everyone knew: house prices are still falling. The figures put the average house price down 0.9% on the month, 6.3% on the year and 8% down from the peak in October. If the current rate of fall continues for the rest of the year, Nationwide will be measuring a fall of between 10% and 11% for 2008.