House prices are still rising

House prices are rising on an annual basis for the first time in nearly two years.

The annual growth rate is two per cent, the first increase since March 2008. Martin Gahbauer, chief economist, said that confidence is the reason why the property market is showing signs of cooling. The 0.4 per cent increase is the slowest since May. He also mentioned that the market needs a boost. The very strong monthly increases during the summer were unlikely to be sustainable over long term.

The prices are nearly 5 per cent higher than at the start of the year 2009 when almost every City real estate office was predicting a plunge. The experts are stunned to see the record low interest rates. They are still 13 per cent below the levels seen in October 2007.

There were sings that more people were putting their home on the market nationwide which could depress house price growth. Peter Bolton King, chief executive of the National Association of Estate Agents said: “As sellers come on to the market we may see a leveling out of house prices, but we will also see a far firmer foundation for a real market recovery”.

I think that the real estate prices are way to high. At least here where I live, at the coast, the prices are mountainous. It’s very difficult to buy a house or even rent a house at an acceptable price. The prices are just unthinkable. Now the prices are slowly decreasing, which is absolutely necessary. The increases during the summer were indeed unlikely to be sustainable over long term. We have seen the situation in America. People could buy a house for a low acceptable price and they took a loan for that. When they had financial troubles to pay off the loan, they put a mortgage on their house. They could also have a second mortgage on the same house. And then began the troubles, we all have seen the result of that I may say.

http://www.thesun.co.uk/sol/homepage/news/money/2706585/House-prices-up-year-on-year.html