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Jamie Delargy: Tuesday, 09 March 2010

House price conumdrum

Business

Are house prices continuing to fall? Maybe...

I wouldn't necessarily draw a firm conclusion about that from the latest results issued by the Royal Institution of Chartered Surveyors.

Most estate agents surveyed said prices had remained the same over the past three months. A third reported they had fallen with only one in twenty saying the cost of a home had risen.

Averaged out that looks like a further drop but the results look too contradictory to me to indicate the broad market is headed in any particular direction.

It would be unwise to treat this regular sampling of the market like the University of Ulster quarterly survey which measures house price movements against an index. It's not intended or designed to be as precise as the UU report.

What you can definitely say is that prices are showing no clear sign of turning up.

I'd be tempted to go with the line adopted by the RICS itself.

With the economy only recovering in a slow and uneven manner, the organisation warns the housing market will not be able to revive rapidly.

The number of transactions will continue to rise slowly, the RICS predicts.

Spokesman Tom McClelland says house prices will be broadly flat over the next couple of years.

The Ulster Bank echoes the point saying anyone expecting strong growth in the near future will be disappointed.

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At 08:41 on 14 March 2010, Robert David Wright wrote:

I would like to add some thoughts to Mr. Liam Wards remarks. A salesman who works in a suit and tie has no idea as to where the brick layer is going to put his brick down if he already built all the houses. A young generation of construction workers are "under or unemployed" and they have to adapt and realign their skills. I hope that Enterprise would see and addresses this and the generation see that if they are enterprising they can use their skills to repair also. Governments can't be left alone. Promotion of optimism is the key.

At 14:27 on 13 March 2010, MC wrote:

This is not a question of optimism returning so that it can be business as usual. It's a question of the whole economy realigning after a period of reckless lending and borrowing by banks and consumers. Talk about 'optimism' is naive. For the housing market to return, 'optimism' needs to be backed by the kind of lending practices that went on prior to 2008, and there just isn't the capacity in the system for it. We're all, as individuals and as a nation, in hock up to our oxters. With respect to Jamie, who's contributions I have often admired on this matter, the article above is meaningless. So the head of RICS thinks prices will remain flat. I'm sorry, but McClelland's views have no worth. They are not backed by anything other than his activities as a seller of houses. He brings no economic or statistical information to bear on the statements that he makes. It is merely his opinion, and not an impartial one at that.

At 13:00 on 13 March 2010, Norman wrote:

The normal need for an incremental growth in housing stock is undisputed. The issue is the stock of financial savings and capital invested in the housing market, which distorted our thinking and steadily moved the allocation of resouces and capital from the productive sectors of the economy into the non-productive. Wirness the many villages where the remaining factory was closed to be replaced by a housing development Now there are no jobs for the occupants.

At 20:29 on 12 March 2010, Liam Ward wrote:

Decent homes for those who need them are a mark of civilised societies. There has been longstanding need to build an additional 1.5 to 2% of established housing stock anually. Enonomies and societies rely on this supply, and it's benefits. Those who gloat over falling activity in this sector ignore the very many reports by eminent economists drafted before during and after recessions which tell us how vital housebuilding is. No sensible observer can surely be gladdened by the 100,000 or so people in NI who are under or un-employed because cynics talk down any signs of optimism

At 15:31 on 09 March 2010, Norman wrote:

This obsession with house prices is entirely wrong, and illustrates the poverty of our economy. In due course, we will pay for our failure to focus on production and productiivity. These are in fact the ONLY long term determinant in sustaining economic growth. The cost of a house does not detemine economc growth, it follows it.

At 15:26 on 09 March 2010, ooh aah wrote:

House prices dropping? Surely not. I'm sure UTV news will be wheeling out estate agents to tell us the decline has halted and prices will be rising soon. The same wrong story UTV has been plugging every month since November. Has UTV moved into the estate agent business? or do they have a few houses there losing money on?

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