Traders predict house prices will fall by 50% in four years

[Dow Jones]

Key Indicator = Mortgage approvals

(From BBC website)
8% fewer than in March and nearly half the level of lending that was approved a year ago.
Mortgage lending is expected to slump this year because of the credit crunch and a shortage of finance to lend.
Both the number of loans approved, and the amount of money offered to borrowers, has now fallen for 12 months in a row.
Both the Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors have warned that property sales this year would fall by between 35% and 40%.
(end)
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I think one should look at mortgage approvals as one of the main indicators long-term. As with everything, supply and demand is key to pricing.
If it stays the same, then we could be looking at the above figure - if worse.
OK, there are always 'cash buyers' but what percentage do they represent today, 5-10% ? If so, deduct accordingly.

[HairyArsedBloke]

Yep. Make money on the way up and short the market on the way down. As long as prices change, there is money to be made.

Works for me

[BlasterBates]

50%

Definitely a boomed posting.

[Cheshire Cat]

Should give me enough time to save up and buy a second home with cash

Result!

[sasguru]

Should give me enough time to save up and buy a second home with cash

Result!

Classic schoolboy error. You're assuming you'll have a job.

[BrilloPad]

Unless there is a property construction boom or LOADS of immigrants leave then I just cannot see 50% drops. I reckon 25% will be the bottom line.

Presumably Gordon Brown will put any housebuilding plans on hold now?

[BrilloPad]

Classic schoolboy error. You're assuming you'll have a job.

I will have a job!

Big Issue anyone?

[HairyArsedBloke]

Unless there is a property construction boom or LOADS of immigrants leave then I just cannot see 50% drops. I reckon 25% will be the bottom line.

or the supply/price of loans to wannabe house buyers dries up

[hgllgh]

Uh, doesn't this class as one of them "self-fulfilling prophesy" things?

If "traders" pump in endless negative comments about the housing market then people will be unwilling to buy at current prices and sellers will have to drop their prices if they want to ever move house.

It's simply the reverse of what's been happening over the last few years with "traders" saying that property is a rock solid investment, so the market value goes right up along with the confidence.

It's all a bit surreal.

These "traders" are having the same kind of impact on food and fuel prices now as well. They should all be dragged out and shot.

but traders are just reacting to the market. yes, once they see it going in one direction or the other they may try to influence it, but at the end of day it was the short term profit, fear, and greed within banks that led to the credit binge that caused the price rises ... nothing to do with traders... it's the upper level bank management teams that created these policies within the banks that need to be dragged out and shot That knob jockey running NR should be fined ... it's the only language these people understand

[Bagpuss]

It's the job of any sensible government to control the boom through interest rates. This one didn't, they actively encouranged it. It's ultimately going to drag us into recession.