Losses arising from America's housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world's leading economists has told The Times .
Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.
Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: “American real estate values have already lost around $1trn [£503bn]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars’ worth of losses.”
TWO OF THE UK's largest property funds, which have been hit by mass redemptions, are expected to revalue assets this week, giving a clearer indication of how the market has fared over Christmas, according to The Telegraph.
Norwich Union Property Trust, Britain's biggest property fund at £3.6bn, is expected to say its asset value has fallen less than 2%, while New Star is understood to have left its valuation unchanged. December figures are keenly anticipated as evidence of where the market will go in 2008.
Slower trading over Christmas will have helped prices stick at previous levels, but agents are hoping that the smaller falls in the funds' assets are a signal that the depressed property market has finally hit the bottom.
THE CREDIT CRUNCH and dire predictions of job losses and a new year economic slowdown seemed to have little effect on bargain hunters yesterday as shops across the country reported no let-up in the frenzied pace of sales, The Guardian reports.
The rush, which started on Christmas Day, when armchair shoppers spent £84m online, continued with thousands of people joining the singer Lily Allen for the opening of the Harrods sale in central London.
Earlier, the Lakeside shopping centre in Essex said the number of people through its doors was up 29% this year, with the House of Fraser tills ringing up £1,000 a minute in the first hour of trading.
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