Monday, Feb 08, 2010
It's different here
Wall Street Journal: London's Real Estate Bubble Is Back—and It's Scary
Looking at the real estate listings in London is like stepping back in time to that unreal, giddy world of three years ago—before Lehman, before subprime, before AIG. But these prices are now, and they contain an ominous message: The London real estate bubble, arguably the biggest one of all, still hasn't popped. Prices are just 9% of their 2007 peaks.
If history is any guide, it surely will. Burst bubbles typically fall a long way, and there is no reason to believe this one will be any different—despite the usual rationalizations you hear in this town today, and which you heard in, say, Florida in 2005 and Tokyo in 1988.
Posted by little professor @ 12:04 PM (942 views) Add Comment
3 Comments
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1. little professor said...
Should read :"prices are just 9% off their 2007 peaks"
"The average home in London, including all those dreary outskirts that go on and on and on, is $436,000. That's even higher than it was as recently as 2006, when the bubble was in its late stages. In the fashionable center of town—where the properties cited at the top of this article are all located—the prices are astronomical."
2. hpwatcher said...
"The average home in London, including all those dreary outskirts that go on and on and on, is $436,000. That's even higher than it was as recently as 2006, when the bubble was in its late stages. In the fashionable center of town—where the properties cited at the top of this article are all located—the prices are astronomical."
So is this a bubble? Surley, it should have popped by now, if it was truly a bubble?
*Tries to keep a straight face*
3. icarus said...
Credit and deliberate asset-price inflation can do some funny things. Remember the completely empty town in China where all/most of the houses have been bought as investments "because property never falls in value".