Economists ditch price rise prediction
The economists behind the National Housing Federation’s house prices report, Home Truths, have ripped up their forecasts as the market spirals rapidly downwards.
The federation’s 2008 report, published on July 28, predicted that average house prices would rise by nearly 25 per cent from 2007 to 2013.
It cited a market forecast by Oxford Economics, which anticipated a 2.1 per cent drop in 2009, followed by rapid price rises from 2011 onwards.
But Oxford Economics’ senior economist Adam Slater this week said they now expected nominal prices to drop 17 per cent between 2007 and 2010 – a real terms fall of 23 per cent.
Prices would not return to their 2007 peak until 2017, he told the NHF’s annual conference.
He told Inside Housing: ‘Six months ago we were still looking at a relatively shallow downturn. We are now looking at a full-blown downturn over a long cycle, like the ones we had in the 70s and the 90s.’
He told the conference: ‘In respect of the role of government, there isn’t an awful lot that can be done – once the cycle is in place, it has to work itself out.’