Telegraph.co.uk
By Helia Ebrahimi
Property prices will not recover for another decade and should be viewed as "risky assets", according to PricewaterhouseCooper's Economic Outlook report.
The PwC research, published on Tuesday, not only puts British growth lower than the official Office of Budget Responsibility's (OBR) forecast but also paints a grim picture for home ownership in the UK for the next 10 years.
After 30 years of almost uninterrupted house price rises, Britons have piled in £3,500bn into bricks and mortar. Only pension contributions equal the 39pc of total net private wealth that is invested in the property market.
But according to PwC: "Housing is a risky asset that is not guaranteed to generate positive real returns in the future even though this has been the pattern in the past."
In fact, PwC says, there is a strong possibility that house prices continue to fall for the next five years and could drop further even beyond 2020. According to the report, this would significantly drag back the speed of economic recovery – which PwC claims faces a risk of a double-dip recession.
The "real terms" forecast by PwC includes consumer pricing adjustments that take into account the goods and services you can buy in 2020 compared with 2007. There is a 70pc chance of prices falling further in real terms by 2015 and a 50pc chance of a continued downward trend by 2020.
"The assumption that property is a 100pc safe asset you can continually borrow against is over," said John Hawksworth, head of macroeconomics at PwC.
http://www.telegraph.co.uk/finance/economics/houseprices/7886145/UK-house-prices-not-set-to-recover-for-another-ten-years-says-PWC.html