It may be decades before real house prices again rise strongly
While fiscal issues remain, we do not live in the dystopia described in too many articles
‘My hope, if not forecast, is that we have seen the peak in residential property prices. Perhaps for this generation, not just for the current cycle.’
The year began with a burst of economic optimism. That’s mostly because forecasters had got 2017 wrong: initial forecasts of subdued growth had been confounded by a robust US economy and surprisingly buoyant European activity. Emerging markets also looked solid at the turn of the year and the long-awaited China crisis once again failed to materialise.
Stock markets had reflected this benign economic background: healthy double-digit percentage increases were the norm, particularly in emerging markets. While Brexit and Trump dominated the main headlines, there hadn’t been much read across to business or financial markets. Inevitably, most crystal-ball gazers assumed that much or all of this would continue. Equally inevitably, it did not.