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View Full Version : oh dear: House price to earnings ratio points to a 19pc fall



AtW
8th January 2015, 17:24
" How over-valued is property?

Halifax's latest house price survey, published today, shows a 0.9pc rise in prices in December but that more broadly, the market has stalled with only a 0.3pc for the quarter, from October to December. This was the slowest rate of growth in two years.

The reasons are covered in this report.

One crucial measure of fair value is included within the data on Halifax's website.

Each month it publishes a price-to-earnings ratio going back to 1983. This p/e relationship, based on a comparison of house prices and average wages should be closely watched; history shows a high p/e ratio often heralds price falls (although the credit boom sustained a p/e above 5 between 2003 and 2007). "

Chart of the day: House price to earnings ratio lurches above five - Telegraph (http://www.telegraph.co.uk/finance/personalfinance/houseprices/11332963/Chart-of-the-day-House-price-to-earnings-ratio-lurches-above-five.html)

AtW's ekonomic komment: Oh FFS, 5? FIVE??!?! Should be 3 (THREE), so the drop should be 50%+ (70% in London), that would get property prices to sanity.

PurpleGorilla
8th January 2015, 21:10
Property is cheap, full your boots.