The property market was unexpectedly resilient in 2009, probably because of low turnover and rock-bottom interest rates. But what does next year hold? We asked the experts for their predictions.

Richard Evans, The Telegraph – 15 Dec 2009

Ed Stansfield of Capital Economics

We expect house prices to fall back by about 10pc next year.

The logic is that we are suspicious that this year’s price rises are meaningful. The rebound we have seen seems odd given the economic background, while the level of transactions has been very low.

The market has been driven by a few cash-rich buyers, including first-timers with access to the ‘bank of mum and dad’ and overseas buyers who have been taking advantage of the weakness of sterling to snap up properties, especially in London.

We believe that any shock to sentiment could wipe out this year’s gains.

One factor supporting the housing market has been the relatively mild rise in unemployment. If employers continue to avoid laying people off, our forecast of a 10pc fall in house price could turn out to be pessimistic.

But if the economy fails to recover, companies may feel they can no longer keep people on. Our hunch is that considerable job losses are in the pipeline.

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