sues_budgie Posted January 18, 2011 Share Posted January 18, 2011 According to todays newpaper, the house prices are expected to surge this year. Also according to the newspapers, Unemployment is also due to surge this year. Surely housing is a supply and demand thing. If people are to lose their jobs on mass over the next 12 months, then how can there be a surge in demand for new homes if people can't pay the mortgage/rent? Link to comment Share on other sites More sharing options...
Obelix Posted January 18, 2011 Share Posted January 18, 2011 Because even if you are unemployed you have to live somewhere. The supply pressure doesnt go away. Link to comment Share on other sites More sharing options...
Berberis Posted January 18, 2011 Share Posted January 18, 2011 Because even if you are unemployed you have to live somewhere. The supply pressure doesnt go away. House prices are inflated by demand and demand will be down if less people have jobs. Link to comment Share on other sites More sharing options...
L00b Posted January 18, 2011 Share Posted January 18, 2011 According to todays newpaper, the house prices are expected to surge this year.Out of interest, which newspaper and who was interviewed? I'd be extremely surprised if house prices were indeed going to 'surge' in 2011...If anything, I'd even be surprised if they stopped falling! Link to comment Share on other sites More sharing options...
lizmachin Posted January 18, 2011 Share Posted January 18, 2011 Out of interest, which newspaper and who was interviewed? I'd be extremely surprised if house prices were indeed going to 'surge' in 2011...If anything, I'd even be surprised if they stopped falling! I would imagine it was the Vancouver Sun or the Sydney Morning Herald. Link to comment Share on other sites More sharing options...
wednesday1 Posted January 18, 2011 Share Posted January 18, 2011 According to todays newpaper, the house prices are expected to surge this year. Also according to the newspapers, Unemployment is also due to surge this year. Surely housing is a supply and demand thing. If people are to lose their jobs on mass over the next 12 months, then how can there be a surge in demand for new homes if people can't pay the mortgage/rent? Which newspaper was that, any chance of a link? I heard some bloke on Rad 4 this morning saying not too covincingly imo, that house prices may rise this year due to a shortage of supply but no mention of a 'surge'. Hopefully house prices will stabilise as falling prices will dent confidence in the economy even further. I don't think anyone doubts that unemployment will rise as the ConDems consign hundreds of thousands of public servants to the dole queues. This is a reason why I can't imagine much of an upturn in house prices, as well as the fact that interest rates are likely to rise coupled with inflation which will reduce peoples appetites for getting a bigger mortgage. Then again I could be totally wrong like most were last year, in their predictions for 2010: http://awe.sm/5FV5N The Telegraph also predicted a 6% increase. Link to comment Share on other sites More sharing options...
Obelix Posted January 18, 2011 Share Posted January 18, 2011 House prices are inflated by demand and demand will be down if less people have jobs. But it wont that's the point. Demand for houses is very inelastic and so is supply due to the capital costs. People who become unemployed dont stop living in houses - although they may not pay for them housing benefit, social/council housing etc will so the demand for housing remains more or less the same. Link to comment Share on other sites More sharing options...
Berberis Posted January 18, 2011 Share Posted January 18, 2011 But it wont that's the point. Demand for houses is very inelastic and so is supply due to the capital costs. People who become unemployed dont stop living in houses - although they may not pay for them housing benefit, social/council housing etc will so the demand for housing remains more or less the same. People who become unemployed don't tend to move though, so supply drops. This is what happened and is still the case for the most recent recession and I cant see how anything will change. All other predictions I have seen have shown a price fall for 2011. Link to comment Share on other sites More sharing options...
vinyl Posted January 18, 2011 Share Posted January 18, 2011 Perhaps getting Gordon Brown out of no10 has restored a bit of confidence in the housing market just like it has done for the FTSE which seems to have risen by around 15% since May. Link to comment Share on other sites More sharing options...
wednesday1 Posted January 18, 2011 Share Posted January 18, 2011 Perhaps getting Gordon Brown out of no10 has restored a bit of confidence in the housing market just like it has done for the FTSE which seems to have risen by around 15% since May. Since the Cons got in house prices FELL in the last 6 months of the year. Just what are they good at! Link to comment Share on other sites More sharing options...
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