Thursday, Jan 15, 2009
2008, land values on the rise…WHAT A JOKE!!!!
Vantage land property letter: Land: a year in review
According to these jokers 'The RICS Rural Land Market Survey, published in July, reported a 24% growth in land prices for the first half of 2008 – the fastest pace in the survey’s history, with a 47% increase year-on-year' ......Optimism for land in 2009…
As 2008 drew to a close and the property market continued its decline, farmland proved remarkably resilient by recording a 21.5% increase in value.there is little evidence to suggest an influx of sales during 2009. Conversely, demand for land continues to rise and there are no indications that it will weaken.
Posted by sold in 2007 and trying to stay patient @ 05:45 PM (1183 views) Add Comment
11 Comments
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1. voiceofreason said...
I can believe this, I have been looking at land investing and as IRs fall through the floor, land and gold and property are doing nicely thankyou.
And whilst reckless borrowers are also bailed out by low IRs too, expect house prices to rise again soon.
But what happens then will be interesting. I expect an inflationary jump, with nice high IRs to follow...
2. Dead Spider said...
http://www.vantageland.co.uk/land-for-sale-willoughby-warwickshire.asp
"Housing
The average house price in the area is 84% above the England & Wales average. These house prices have increased by 84% in the last two years alone."
Lol :-) , made my day .
3. letthemfall said...
Agricultural land is rather different to building land. The big increase in agric commodity prices last year had quite an impact. Whether that will reverse now that grain prices are slipping I don't know, but it might be a long term trend
4. inbreda said...
Absolutely - rural land is a very different kettle of fish. It is a fairly good inflation hedge IMO. Further evidence that deflation is temporary and the clever money is betting that we are due some serious stagflation soon?
5. titaniccaptain said...
Just as I said would happen............My second prediction come true in a matter of days
here is my first
http://www.housepricecrash.co.uk/newsblog/2009/01/blog-cant-get-a-loan-want-to-support-local-businesses-try-a-pawn-shop-20973.php?comment=added
6. titaniccaptain said...
There I was banging on and on about agricultural land and Pawn shops and hey presto the CAPTAIN WAS RIGHT...........Ok lets see what else will happen folks..........oh yes Coal will go shooting up in price so start stocking up on coal if you can store it.....and 4 bed houses in good areas will be selling for 35 grand by the end of next year.......there we go someone can bookmark that one and we shall see!!!!!!!!!! and if im wrong then who cares lol..........but two predictions coming true in one week woooo hoooo......................whos the daddy?
7. titaniccaptain said...
There I was banging on and on about agricultural land and Pawn shops and hey presto the CAPTAIN WAS RIGHT...........Ok lets see what else will happen folks..........oh yes Coal will go shooting up in price so start stocking up on coal if you can store it.....and 4 bed houses in good areas will be selling for 35 grand by the end of next year.......there we go someone can bookmark that one and we shall see!!!!!!!!!! and if im wrong then who cares lol..........but two predictions coming true in one week woooo hoooo......................whos the daddy?
8. denzil said...
Yep! No real surprise. Somebody on here asked where to invest their money a few months back.
When I simply replied "agricultural land" I was confronted with complete derision. I went to an auction a month back
and nearly all the agri land went for more than the guide prices, whereas only one property in 10 met the guide.
Too many pessimists! Another thing that is currently surprising is the number of successful BTL investors adding to their portfolios via repos. Personally, I'm not so sure about the sense in BTL.
9. montesquieu said...
BTL makes a lot of sense IF you can get places cheap enough so there's a decent yield (and right now 5-6% yield isn't looking that bad comapred to other investment options). If you have ready cash and can invest long-term, that's a reasonable return and so long as you aren't in a hurry for capital growth, and can feell relaxed about the odd void period and even a possible dip in value for a while, not a bad decision, even now.
What's stupid is BTL WITH A MORTGAGE at whatever percent, at even a moderately high LTV, at a time of capital depreciation.
The BTLers who will be in trouble soon are the latter, the upstart, something for nothing brigade who attended seminars at the Church of Leverage (and who are soon to feel the impact of leverage in reverse), not the former (who generally had some money to start with).
10. goweresque said...
As with most booms, they're already over once people outside the industry cotton on. 2007 & 2008 were the boom years for farm land. I know as my sister was trying to buy a farm in Wales and had a hold up on a legal issue for about a year. In that time prices had gone up 25%. I suspect prices are pretty stable at the moment. I doubt there will be a big rise in the future. More downside than upside in my opinion. But there are good reasons to think farmland won't fall too dramatically: 1) You get a return on your money. Not huge but a return. And its based on a product we all need, food. 2) In a small nation such as ours land is in limited supply, and decreasing due to urbanisation etc. 3) Tax reasons such as roll over relief for capital gains tax, and 100% inheritance tax relief too (as long as its a commercial business). 4) More and more people want to move to the country, and buy a nice house with a bit of land, driving the price of smaller areas of land near large towns to astronomical levels.
Farm land has rollercoastered over my life time - it was £2k/acre back in '82, £1k in 1990, back to £2.5K/acre by late '90s, now about £4-5K. But you have to remember back in '82 you bought a farm 'all-in' IE a 200 acre farm sold for £400K including the house and buildings. Now a farm is split up and valued separately - house, cottages, buildings suitable for conversion, small plots of land near villages, and the main commercial land. Just land on its own with no buildings or house costs £4K now. Add in the value of the house and buildings and spread it across the entire area and you can get values over £10K/acre.
11. new user 2007 said...
If land is an inflation hedge and there is no inflation, why will land prices go up? The land price was driven my the belief that food prices would increase further. Since then oil prices have collapsed, making biofuels less required. At the same time incomes are falling everywhere. This means less money for meat (eating vegetarian food, as was the case before developing countries became richer, will mean the return of original eating habits i.e. vegetarian food, which is more efficient that meat as a food source in terms of the food chain).
As for some above talking about the power of low interest rates. Can they see beyond their own egos?! The US cut rates close to zero ages ago, to no effect. Japan cut them 15 years ago and still teven now to no effect! They have no understanding of what is actually happening and why all the government bailouts will fail. That level of ignorance is why the biggest ponzi scheme in history was allowed to grow, and why lots of clever money has gone in several times now!
The number of BTL investors who have come here all smug and have been buying because the "bottom has come" is hysterical...how many bottoms have occured for this clever money:)? The bottom in each housing market never shows a V-shaped recovery i.e. it is hard to miss the boat as VIs would have us believe...prices stablise for quite a while before going up during housing "CORRECTIONS". So not sure why we should charge in.
Denzil...
Many of the repos are from other BTL who also called the bottom of the market and were clever, Lets see how long before these new people at auctions are selling their properties for the same reason.
Gower...
Most of the buyers are speculators? So I suspect they will have no return on the land and will not be growing food? No idea about the number quoted, but I suspect it will come back down sharply this year and next.
And for anyone still harping on about our lack of land. Go and look at places like Singapore, Hong Kong, Japan. All with much higher population densities and less useful land (Japan has many mountains) BUT prices have not recovered in any of them from their highs (Singapore and Hong Kong during 1997-98, and Japan from 1990). What did they all have in common? A lack of credit and/ or a lack of confidence (one or both over time).