Tuesday, Aug 01, 2017

Buyers market round the corner

Dailymail: Sluggish houseprices buyers market round the corner

things dont look too good out there and that with all the props.The
only thing they haven't tried is giving money away free which they did in japan
but it didnt stop prices falling as much as 90% and even 23 years later they are still 40-60% less

Posted by taffee @ 10:59 AM (3715 views) Add Comment

11 Comments

1. jack c said...

Almost a fifth of traditional high street estate agents are running the risk of going bust due to tighter margins, fewer transactions and competition from online estate agents.Research from restructuring and insolvency legal firm Moore Stephens found 19% of estate agents registered as limited companies are exhibiting warning signs that indicate they are at risk of going insolvent. The analysis of Companies House records showed that 4,928 estate agents out of a total 25,560 had signs of financial distress. Online estate agencies such as PurpleBricks, House Simple and Emoov threaten to squeeze profit margins of some high street estate agents with their higher property and staff costs.The growth in property websites has also undermined the role of estate agents as an essential part of the process. A report by HSBC found the overwhelming majority of British house buyers used online methods when researching and buying property, and that this was likely to result in the home buying and advice process to change beyond recognition.


Full article @ http://www.mortgagesolutions.co.uk/news/2017/07/31/fifth-uk-estate-agents-brink-insolvency/

Tuesday, August 1, 2017 02:31PM Report Comment
 

2. nickb said...

My heart bleeds for the EAs. Not. On the other hand it is not exactly their fault that we have an over-financialised economy reliant on speculation in things that already exist, rather than productive work.

Tuesday, August 1, 2017 04:41PM Report Comment
 

3. libertas said...

Oh brother, again, the UK is not Japan, because our population is rapidly rising whereas Japan's is shrinking. Its possible Brexit will stabilise population growth, but unlikely we will see a Japan, and anecdotally, there appears to be a bit of a baby boom at the moment.

Tuesday, August 1, 2017 11:03PM Report Comment
 

4. icarus said...

The Japanese property crash of '91-'92 wasn't caused by a shrinking population. It was an asset-price crash which included the stock market. It was caused by expansion of money supply and credit and consequent speculation, followed by a crash which took down the economy as well as asset prices and banks with 'non-performing asset loans'.

Wednesday, August 2, 2017 07:53AM Report Comment
 

5. britishblue said...

I am seeing some movement in the first time buyer market. But interestingly most of the transactions are buy to let landlords selling. I am wondering whether in a years time the Buy to let market will have shrunk for the first time. A multi property landlord wont be so bothered about selling a property under the average price in their area if their strategy is to start downsizing their property portfolio.
I think it was the DT last week that reported that 46% of properties in Kingston upon Thames had been reduced. I am wondering why more haven't been reduced as the market is dead here and the wave has gone further out of London through to Staines/ Egham, Sunbury, Woking and Redhill or the poorer infill areas, where prices are still lower and transactions are still happening
Libertas, one of the big red flags coming through for the housing market is that rents are falling for the first time in London,

Wednesday, August 2, 2017 09:32AM Report Comment
 

6. techieman said...

Exactly Icarus. The Japanese didn't all commit harikari at once. Although demographics now play a part in the (lack of a meaningful) recovery.

So (or should that be Ah so... I know mind your language ), the momentum is no longer rising and although prices aren't demonstrably falling, there seems to be a fair bit of tumbleweed.

Time to hit the bids ? Hmm

Wednesday, August 2, 2017 09:21PM Report Comment
 

7. sneaker said...

Because all the free money went overseas. Japanese institutions are still to this day some of the largest global investors. It's more attractive to invest your cash in a country with a young population that's growing than an ageing population that's not. You can't change demographics by printing money. You can only change it (slowly) by encouraging & rewarding having children (tax breaks) or (quickly) by mass immigration.

This is what people don't realise. The West is an ageing population. This is why we are struggling. Unless and until there is a serious baby boom, we can only fix it by immigration. Because otherwise we don't have enough young people producing tax revenues OR looking after the elderly. The only change to this is view is robotisation. If western adults won't have children, then we need to fill the gap with robots.

Thursday, August 3, 2017 10:35AM Report Comment
 

8. icarus said...

@7 - The carry trade isn't about investing in countries with young populations. It's about borrowing in zero interest-rate Yen to convert to USDs to buy higher-yielding USTs. Hedge Funds use v high leverage and can make big profits when this buying drives up US bond prices, especially when the $ rises against the Yen, as the BoJ intends.

There is also investment from low-interest currencies, like the $ and the Yen, to 'emerging markets' which have relatively high-yielding bonds (and co-incidentally younger populations). Trouble comes when one or more EM countries cannot pay the interest on its/their bonds (in part because the rising dollar cheapens their commodities) and the whole thing unwinds, as in 1997-8. It's financial engineering that helps nobody except the Hedge-Fund-type players.

Thursday, August 3, 2017 11:39AM Report Comment
 

9. techieman said...

Jack @1.... we discussed this in April last year, when I posted a historical MIRAS article, I said :
"Abbey National sells estate agents for 8m pounds: Two entrepreneurs buy Cornerstone chain after bank's losses since 1987 mount to at least pounds 243m" - Independent 16th August 1993

I am wondering if the new Tepilos / Purple Bricks and Easy Estate Agencies - are the indicator that a similar situation to the banks getting involved in the "Vertical integration" in the late 80s. Im not saying these companies will inevitably lose, but the residual market - e.g. Foxtons and both country wide and local equivalents might struggle.

Any views?"

Sunday, August 6, 2017 07:41AM Report Comment
 

10. jack c said...

TM (Sunday, August 6, 2017 07:41AM) - interesting observation and very thought provoking, hence my delay in replying ! I can really only comment based on my experience of the North East of England which loosely covers the top of North Yorkshire to North Northumberland. Purple Bricks certainly appear to be gaining market share/presence and it may be pure coincidence but a local agent has been forced to close one of his offices rather suddenly (I know the adviser who has exclusivity for any work generated). I guess 1 sale per week and average sale time of 35 weeks might also have something to do with the closure. Over time I do see online and fixed fee as the model that will likely prevail.

Tuesday, August 8, 2017 10:00AM Report Comment
 

11. jack c said...

TM - to add to the debate- Neil Woodford’s £845m Patient Capital Investment delivered a positive total return for the first six months of 2017, led by strong performance from a holding in an online estate agent......................it was the trust’s second largest holding that Neil Woodford highlighted as a strong driver of returns, online estate agency Purplebricks, which accounts for 10 per cent of the capital in the trust. Purplebricks share price fell 7 per cent on 3 August in light of claims made on a BBC documentary about the nature of the company’s advertising and charging.However over the past year, the shares have more than trebled, from £1.40 to the current (4 August) level of £4.65.

Full article @ www.ftadviser.com/investments/2017/08/04/woodford-s-trust-boosted-by-online-estate-agent/

Sunday, August 13, 2017 11:04AM Report Comment
 

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