Tangentially related to the recurring long-term prediction markets discussion, I noticed at
Economic Housing Derivatives that TFS London has launched a “-Future House Price Index”- extending to 2030.
A Reuters article says New indexes see UK house prices doubling by 2030:
The aim of the TFS FHP series of indexes, calculated using over-the-counter swaps based on the Halifax house price index (HPI) and traded by banks, was to raise the profile of British house price derivatives by expressing market expectations in more easily understandable terms.
I’-m not at all certain whether banks are trading securities that expire in 2030 or this index is pure extrapolation. And despite the sensational “-doubling”- headline, the numbers (see the
Economic Housing Derivatives post) seem to indicate a 2.7% annual increase, presumably not much above expected inflation.
CME housing futures go out no further than one year.
Something interesting, or move along?
Correction: The blog cited is called Housing Derivatives, not Economic Derivatives.