Property disconnect

I keep reading in the consumer press that house prices are going up. Not as fast as they did, but still up. (The fact that predictions of 1-2% price growth are now way below inflation, so you would be better off hoarding baked beans than buying a house, seems to have escaped many commentators.)

But the stock market is telling me a different story. First off, Humberts - which has just had a profit warning. Not unexpected if you look at the continuous decline in the share price since May.

(A chat with a chum in the sector confirms that while April was a record month, May saw the beginning of decline, with Home Information Packs and interest rate hikes giving agents a negative double whammy.)

And the commercial property sector is down nearly 30% over the the past six months. I suspect that because it attracts a slightly more educated investor - put it this way, most people don't buy their own offices so they have no emotional attachment to the market - it may be reflecting the credit crunch rather more quickly than the residential sector.

I still think it will take two or three years for the residential market to fall off definitely. But if my reading is right, some time in 2010 I'll probably buy my first new repossession. And it will be either a north Norwich two-up two-down terrace (put it this way, I've done all right on the first one!) or one of the ritzy new flats and townhouses along the Wensum, probably from a buy-to-let investor gone wrong.