House prices in the UK continue their slide – in gold terms still at 1986 prices

This week we got the Nationwide’s house price index. It confirms that the drift lower in house prices continues – down 0.6% in June and now down 1.5% for the year. From the report:

House prices declined by 0.6% in June, taking the annual pace of house price growth down to -1.5%, the lowest reading since August 2009. The slightly weaker trend we’ve observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near- term rebound.

[emphasis ours]

The report then confirms something we’ve been trying to point out for a couple of years – namely, that all government ‘stimulus’ ever does is bring forward demand. So when the stamp duty ‘holiday’ ended in March predictably demand fell:

Part of the weakness in house prices may also relate to the ending of the stamp duty holiday in March, which provided a temporary boost in early 2012, as buyers brought forward purchases that would otherwise have taken place later in the year.

[emphasis ours]

And the rest of the year:

The outlook for house prices remains highly uncertain. Economic conditions are expected to remain challenging over the next twelve months. However, policymakers’ efforts to bolster the supply of credit to the economy and to help lower the cost should provide support to demand. Moreover, the supply side of the market is still constrained, with construction failing to keep pace with the number of new households being formed.

It now means than since their peak in 2007 house prices have fallen some 11%.

(click for sharper image)

But in terms of gold the fall has been much more pronounced – now off some 76% from the highs back in 2005.

(click for sharper image)

Related posts:

1. As house prices fall in the UK for the year in terms of gold house prices are back at 1986 levels
2. House prices fall again making fresh lows – now back to 1986 prices
3. As UK house prices fall they’re now back to 1986 prices when priced in gold
4. UK houses fall yet again, now at 1986 prices as the gold:house price ratio collapses
5. UK house prices fall 2.3% for the year: Gold:House ratio now at 151:1

Link to this article: : http://www.goldmadesimplenews.com/gold/house-prices-uk-continue-slide-gold-terms-still-1986-prices-7199/

Posted by Jason Cozens on Jun 29 2012. Filed under Analysis, Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.