Two recent headlines, published within a day of one another.
• House prices to ‘plunge a third by 2010′ – This is Money.
• House prices ‘up by 25 per cent by 2013′ – The Guardian.
The first is based on a report from Roger Bootle of Capital Economics. The second is based on a report produced for the National Housing Federation by Oxford Economics.
Bootle has been predicting a house price crash for years and now, understandably, feels his moment has come (see his Ha!, I told you so piece in The Telegraph recently.)
I wasn’t wrong, is his line, I was just a bit early with my predictions … and the fact that the market boomed for longer than I thought will mean a bigger fall.
The National Housing Federation represents 1300 independent housing associations.
They think prices will pick up fairly quickly because rapid population growth and shortfalls in housing supply will keep the pressure on house prices (and force more people to turn to housing associations in search of an affordable solution).
Both, in other words, have their own line to push.
Which reminds me of a very old joke…
An interviewer asks a mathematician: “What does two plus two equal?”
“Four,” he replies. “Four, exactly?” asks the interviewer.
“Yes, four, exactly, and always,” says the incredulous mathematician.
The interviewer then asks an economist the same question.
The economist gets up, locks the door, pulls down the blinds, and whispers, with a nervy glance over his shoulder:
“What do you want it to equal?”
As a matter of interest, who do you think is closer to the truth? And if neither, what do you think will happen to house prices?