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staringclown

Experts question price data to see where property market is moving

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Experts question price data to see where property market is moving

Wonders never cease...

On the other hand, Airey and Rismark's Christopher Joye are more pessimistic. In a recent blog post on Business Spectator, Joye says the market will remain extremely low due to poor consumer sentiment and a fall in spending.

"Over the long-run, house prices track purchasing power quite closely. Disposable household incomes were only projected to rise by about 5% in 2010."

"We've had 4.7% growth in dwelling values in the year-to-date. We do not, therefore, expect to see the market rise much further over the remaining year subject to labour market conditions and the course of monetary policy."

Higher interest rates and lower consumer spending also feeds into expectations – a recent NAB survey shows consumers have cut expectations of house price growth over the next 12 months to just 1.4% in June, compared to 5.2% in March.

Airey agrees.

"I can't see any growth over the rest of the year unless some extraordinary event occurs. I think prices will stay at about 5-6% growth, which is above inflation but will depend on sales figures and so on."

However, all these experts do agree on one thing – RP Data is on to something. In some areas, prices are beginning to fall.

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Experts question price data!

Not hard to see where the prices are as I am not seeing them drop, hopefully they will double and double again. If there is going to be a double dip, who's fault is it.

What does it mean if the so called Experts come to an opinion of sorts, what more media time? You know something there are too many experts and not enough Indians!

rolleyes.gif

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"Over the long-run, house prices track purchasing power quite closely."

Then he should expect a significant downward correction. The same logic* he applies to 2010 YTD prices to reach a flat forecast for the rest of 2010, when applied to 1998 prices provides a -30% to -40% forecast...

housingvshdi.gif

* Specifically "Disposable household incomes were only projected to rise by about 5% in 2010. We've had 4.7% growth in dwelling values in the year-to-date. We do not, therefore, expect to see the market rise much further.."

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Incidentally, if anybody wants to claim that changes in interest rates make the comparison invalid, the SVR at the beginning of the graph was 6.7% and at the end of the graph was 6.9%. In other words, if interest is included, purchasing power has risen less, and the gap becomes larger. ;)

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