Thursday, 29 November 2007

U.K. Home Prices Drop Most Since 1995

The cost of a home fell 0.8 percent from October, the biggest monthly decline since June 1995, to 184,099 pounds ($381,000), Britain's fourth-largest mortgage lender said today. Annual house-price increases slowed to 6.9 percent from 9.7 percent in the previous month, the report showed. So we have reached a peak this summer as did the US last summer, most probably Finland has currently peaked this autumn too...

"Growth does now seem to be slowing,'' central bank policy maker Rachel Lomax said Nov. 23. "There are clearer signs that the slowdown in the housing market is gathering pace.''

Hometrack Ltd., Rightmove Plc, HBOS Plc and the Royal Institution of Chartered Surveyors have all said house prices fell in November. Sellers shouldn't hesitate to lower the asking price because a more protracted slowdown is on the way, Rightmove, the U.K.'s most-used property Web site, said Nov. 19.

I'm pretty sure in about one quarter or two, this article will be valid just by replacing the UK word by Finland. Probabilities are high and the assumption realistic based on data coming from construction builders, statistics Finland, current credit crisis and inflationary environments. Now all point to a gentle correction. Of course, it all depend on the job situation, if the economy deteriorate more than forecasted and the job market reverses trend then the correction could prove more painful.

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