Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Gerald Celente: Why You Still Need Guns, Gold, and a Getaway Plan... - 23rd Jun 18
Cheap Gold Stocks Bottom Basing - 23rd Jun 18
A Trade War Won’t Be Good for the US Dollar - 23rd Jun 18
SPX/Gold, Long-term Yields & Yield Curve 3 Amigos Update - 22nd Jun 18
Gold - How Long Can This Last? - 22nd Jun 18
Dow Has Fallen 8 days in a Row. Medium-long Term Bullish for Stocks - 22nd Jun 18
Trouble Spotting Market Trends? This Can Help - 22nd Jun 18
Financial Markets Analysis and Trend Forecasts 2018 - A Message from Nadeem Walayat - 21st Jun 18
SPX Bouncing Above Support - 21st Jun 18
Things You Need To Know If You Want To Invest In Bitcoin Now - 21st Jun 18
The NASDAQ’s Outperformance vs. the Dow is Very Bullish - 21st Jun 18
Warning All Investors: Global Stock Market Are Shifting Away From US Price Correlation - 20th Jun 18
Gold GLD ETF Update… Breakdown ? - 20th Jun 18
Short-term Turnaround in Bitcoin Might Not Be What You Think - 19th Jun 18
Stock Market’s Short Term Downside Will be Limited - 19th Jun 18
Natural Gas Setup for 32% Move in UGAZ Fund - 19th Jun 18
Magnus Collective To Empower Automation And Artificial Intelligence - 19th Jun 18
Trump A Bull in a China Shop - 19th Jun 18
Minor Car Accident! What Happens After You Report Your Accident to Your Insurer - 19th Jun 18
US Majors Flush Out A Major Pivot Low and What’s Next - 18th Jun 18
Cocoa Commodities Trading Analysis - 18th Jun 18
Stock Market Consolidating in an Uptrend - 18th Jun 18
Russell Has Gone Up 7 Weeks in a Row. EXTREMELY Bullish for Stocks - 18th Jun 18
What Happens Next to Stocks when Tech Massively Outperforms Utilities and Consumer Staples - 18th Jun 18
The Trillion Dollar Market You’ve Never Heard Of - 18th Jun 18
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

UK House Price Trends for 2010 According to the Halifax and Nationwide

Housing-Market / UK Housing Jun 08, 2010 - 01:38 AM GMT

By: Nadeem_Walayat

Housing-Market

Best Financial Markets Analysis ArticleLabours debt fuelled economic election bounce is over. The new coalition government is gearing up for deep cuts in an attempt to bridge the huge £156 billion gap between government revenues and spending with already a down payment of £6.2 billion recently announced and at least another £24 billion to come on top of tax rises including raising VAT from 17.5% to 20% to raise at least another £25 billion in new taxes.


UK house prices are stalling after their 10% rally from the depths of the March bear market low as the Nationwide and Halifax start reporting diverging house price data, though both continuing with a bullish twinge.

The Nationwide reports :

The average UK house price rose 0.5% in May to £169,162, to stand 9.5% below the 2007 peak.

Martin Gahbauer, chief economist at Nationwide said “Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months. The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”

Britians largest Mortgage provider The Halifax reports :

The Halifax house price index fell by 0.4% for May 2010, up rose 6.9% on an annual basis.

Martin Ellis, Halifax housing market economist: "The mixed pattern of monthly price rises and falls so far this year is consistent with a slowing market and is in line with our view that house prices will be flat during 2010 as a whole."

These are the same financial institutions that were coming out with soft landing mantra during 2007 and 2008 that only succeeded in sleep walking home owners into the worst housing bear market of at least the past 30 years. Readers should always keep in their minds that the mortgage banks have a vested interest in stable to rising house prices as we witnessed with the Halifax which was forced into a shotgun wedding with Lloyds TSB to prevent bankruptcy and nationalisation. Though then the halifax bad debts cancer soon sought to eat Lloyds TSB's balance sheet alive which resulted in a series of tax payer bailouts and loan guarantees to prevent bankruptcy and nationalisation. Therefore house prices trend projections from the Nationwide, Halifax or any other mortgage bank have no real value.

As things stand the UK housing market has entered into the twilight zone of being tugged in two directions, one as a consequence of ZERO interest rates and Bank of England Quantitative Easing aka Money printing so as to INFLATE asset prices such as UK house prices, against which we have severe deficit reduction programme's soon to be implemented that at the very least look set to impact hard those regions of the UK that have very large public sector economies i.e. huge tracts of the North of England, Scotland, Wales and Northern Ireland, with tax hikes to hit house prices nationally, especially as the Buy to Let Sector looks likely to take a hit as a consequence of the doubling of capital gains tax.

Therefore this series of NEW analysis over the next 6-8 weeks (June/July 2010) will seek to conclude towards a UK house price trend forecast for the next 2-3 years, that will seek to more than replicate the original 2 year bear market forecast of August 2007 made right at the very peak of the UK housing market (22 Aug 2007 - UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth ), and which builds up on the 100 page Inflation Mega-Trend Ebook of Jan 2010 (Free Download Now), which contained the following UK housing market analysis (graph updated):

UK Housing Bear Market Election Bounce

The UK housing market peaked in August 2007 and entered into a 2 year bear market exactly as forecast at the time (22 Aug 2007 - UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth ), analysis which projected towards a fall in UK house prices from August 2007 to August 2009 of between 15% and 25% that has subsequently came to pass as UK house prices bottomed in March 2009 after having fallen by 23% from the 2007 peak.

The UK housing bear market has experienced a strong bounce off of the March 2009 lows and now stands up approx 10% off of the low as a consequence of unprecedented measures as mentioned in this ebook, the Labour government has succeeded in temporarily bringing UK house price falls to a halt and triggering an Election Bounce.

The impact of the inflation mega-trend on the UK housing market will be for UK house price to be supported in nominal terms, however this it does NOT ignite the feel good factor that triggers housing market booms which only follow when house prices begin to significantly rise in REAL terms i.e. after inflation.

Whilst the current corrective bounce looks set continue into the middle of 2010 (allowing for a potential one month blip as a consequence of the bad January weather), this rally is still seen as a correction within a housing bear market that is expected to remain in a depression for many years, before house prices succumb to the effect of the inflation mega-trend and start to rise.

Ensure you are subscribed to my always free newsletter to receive weekly and in depth analysis in your email in box (only requirement a valid email address).

Source: http://www.marketoracle.co.uk/Article20120.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

jonnySingapore
09 Jun 10, 15:51
forecasts & the stock market

Hi Nadeem. great writing. in regards to your stock forecast, so many indicators are pointing downwards now, is the later year rally you believe will come in danger?

My judgement on available material is indeed to sell and go away for now until moving averages start rising again.

thx

JS.


Nadeem_Walayat
09 Jun 10, 17:23
Stocks & forecasts

Stocks are cheap so I bought some on Tuesday.

I know the market looks ugly but it 'should' rally from here.

We remain in a large corrective trading range, as illustrated in the last indepth analysis of 14th May.


jonnySingapore
10 Jun 10, 10:11
forecasting techniques - monthly averages

yes, that's certainly in line with your forecasts Nadeem.

Would you comment on using 9 or 10 month averages as a safe indicator of where prices are at any point in time? i.e. current prices above an average is bullish, and below the average is bearish for an index?

Or do you have other indicators that you prefer.

Many thanks.

JS


Ajay
10 Jun 10, 13:13
30-yr bond yield

Hi Nadeem,

Wanted to draw your attention to something I observed today. Here is a link to the 30 yr treasury bond.

http://stockcharts.com/h-sc/ui

Would appreciate your comment as I see some similarity with 2008 here (perhaps greater).

Thanks,

Ajay


Nadeem_Walayat
10 Jun 10, 15:32
Technical Indicators

I always keep in the back of my mind that a coin toss is better than any single technical indicator, chart or market theory.

In my opinion the only way to analyse markets accurately is as a whole towards a final conclusion, therefore I rely on the conclusions more than any indicator such as MA's

Always remain skeptical of TA as it contains many singular red herrings.

P.S. the chart link does not resolve to us treasuries.


Ajay
10 Jun 10, 17:04
Technical Indicators

My bad. Don't know how to save this. Perhaps this will work now.

http://stockcharts.com/h-sc/ui

Not knowing much of TA, I can't comment on MAs. As you suggested, I am trying to look at the complete picture and I see this as a warning signal for equities. Would request you to review it again, if you get a chance.

If the link doesn't work again, the symbol is $USB.

Thanks,

Ajay


jake shoe
19 Jul 10, 16:47
selling italy buying UK

we are selling our two houses in italy, and want to go back to uk, but i think i should wait for the 50% decrease in price in the Uk, when will this be??

jake


Nadeem_Walayat
19 Jul 10, 18:08
uk house prices

50% decrease ?

When ?

Never.

and its worse, euro will probably continue to fall against sterling.


Phil
20 Jul 10, 18:27
selling italy buying UK

I wish you all the best during your VERY long wait for a 50% retracement in UK house prices.

Local and foreign Investors pick up the bargains each time we see a pullback because they know that property is always going to be a failrly solid long term play.

A decent rental property can be paid off in 25 years by the tennant and then returns a pension sized dividend each month for the remainder of the life of the investor. For that very reason only a small percent will ever sell off, even when the market does experience downward pressure. We may see 5-10% pullback for the remainder of 2010 but then we'll be back into Jan 2011 and the more fevered buying starts all over again.

Loses for some are buying op's for others in all markets.

Good luck.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules