Market will hit the bottom by 2010 but will take time to recover
It could take up to a decade for house prices to return to their peak levels, an economist will tell the National Housing Federation conference on Thursday.
Adam Slater, senior economist at Oxford Economics, said house prices were likely to bottom out toward the end of 2009 or early 2010.
He said: “This is now clearly a housing correction along the line of the one in early 90s in terms of drop in prices.
“The mortgage market has been severely disrupted and is unlikely to recover very quickly. I will emphasise that on the basis of historic events in housing market and affordability ratios that there could be some further house price falls to come. I will note that the average length of house prices cycles is quite long, something like 10 years.
“Even once prices have bottomed out, which we think will happen in 2009 or early 2010, there won’t be very rapid recovery. It will take quite a few years, possibly a decade, before real house prices get back to their peak levels.”
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