Next week sees the start of the annual round of property analysts’ forecasts: many big name agents and consultancies will give predictions for 2011 by mid-November.
Their views promise to be the most interesting for several years, although you will have to look behind the headlines to see the really compelling material.
Most stories will ‘only’ be about analysts’ uniform gloom about the national housing market in 2011 (most will say prices will dip a little) and uniform optimism about London and the upper end of the market (where prices are expected to remain roughly stable). But the real interest will lie in analysts’ longer term views.
Look out for these trends – their delivery by agents’ research departments may be rather hidden, as they will be reluctant to be the bearers of bad news:
• Some will hint that we are now in a world of low or no capital appreciation for the indefinite future;
• There will also be hints that forecasting models now assume lending will be no easier in the long term as in the past two;
• Many will suggest that transactions may not ever return to anything more than 60% or 65% of the levels seen in 2006 and 2007;
• There may be new ways of looking at, and measuring changes in, the housing market in future – much more segmented, regional and local.
In other words, although they may be wary of being so forthright, the pundits will really be saying what we have seen since 2007 is not a temporary blip at all but the ‘new norm’.
The property have-lots will continue to have a little more, as they will use their equity to leverage mortgage lending; the property have-littles will probably have slightly less. The property have-nots will stay that way.
So the really, really good times are not only over for now - but over for good. Watch for that message, although you may have to look between the lines to see it.
Propertynewshound will carry the pundits forecasts as they appear.
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