- December proved to be the worst month for the UK housing market since the aftermath of the UK’s 1990-1992 recession, according to a survey by RICs, released today. - HBJ Comment: It seems in last 10-15 years, we are getting into worse phase of economy, it is better to get alert and hold your cash tight.
- The number of chartered surveyors and estate agents reporting falling prices rose to its highest level in fifteen years, with just one per cent reporting a rise compared to 61% reporting falls. - HBJ Comment: Look at the rise of 1% compare to 60% fall in real estate agents views.
- However, it’s not just weaker demand – prompted by mortgage banks’ reluctance to lend, higher interest rates and the effect that plenty of negative economic news has had on buyer confidence. Rising supply is also having an impact. New sales instructions were at their highest level since May 2007 last month, and the average number of unsold properties on estate agents’ books had risen by 30%. - HBJ Comments: It is the sentiments of investors which leads to fall in the market, there are many bad news spreading around on daily basis which will finally break the confidence of Investors.
- In fact, even rate cuts are no longer enough to save the housing market. As Capital Economics point out today, market conditions are ‘the loosest they’ve been since August 2005’. So how much will prices fall? Regular MoneyWeek contributor James Ferguson suggested in a recent cover story that it could be as much as 40%.- HBJ Comments: Rate cut will not save economy, rate cut were done during last 6months but look, where we are, still asking for the same, because we want to fix the problem not solve permanently, reason is we don’t have a solution, so let worse get over, time is the only solution and we will have to wait till things gets settle down.
HBJ Capital’s Conclusion: It seems world economy is already going thru recession phase, it started with subprime, housing, credit so and so…most imp fear is we don’t know what next???