The McGlashan
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Posts posted by The McGlashan
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Pedant.
Point remains, volumes up, prices up, and well on track for the 10%-ish bounce I suggested was likely between April and July.
As for your fact without opinion point, raw data is meaningless without interpretation. Movement within the data sets are a direct result of external influences like consumer confidence, investor confidence, political actions and developments, media coverage and influence, wider economic conditions, public perception of local economic conditions, etc etc etc.
For example, the raw data shows that mortgage approvals and lending for purchase have increased every month for the last 4 or 5 months. The Nationwide house price index also reached a low value of 147K in February 09 and has increased every month since then.
The data does not however explain why this is the case, what external influences have been the cause of such a rise, and whether or not those influences are likely to continue.
The data does, indeed, explain why this is the case, if you care to look at the BoE data stretching back a few years, you will see that the start of every year sees an uplift in approvals and lending for house purchase.
It seems that the position of the earth on its orbital procession around the sun is the external influence causing the seasonal rise which is always evident.
That is why some of us like to discuss the more "intangible" aspects of the crash, the wider economy, consumer confidence, media coverage, political responses, etc. You dismiss this as speculation, however all these things directly impact on the data sets you like to reference.Your data is by it's very nature, a lagging indicator. The wider, bigger picture of society is a leading indicator.
For every positive media report, it is a simple matter to find a contrarian view in a different publication. When these views are aired, you have continually dismissed them as 'spam' and 'tin-foil-hat mentalism'.
Here's some more mentalism for you, from the front-page of today's FT:
UK market:
"Net lending secured on dwellings did not grow during the month, the worst performance since records began in 1993, the Bank of England said. The annual rate of lending growth of 1.3 per cent was also the slowest pace on record, and compares with a 11 per cent growth rate before in late 2007."
Aberdeen market:
Oil watchdog cuts demand forecasts
The IEA has slashed its medium-term oil demand forecast and says:
â€The recent resurgence in economic activity could also simply reflect the rebuilding of depleted inventories across several industries, making it arguably premature to predict an imminent and strong economic rebound, not least because the elimination of spare capacity, the deleveraging of the private sector in several highly indebted countries and the rebalancing of global demand are still at an early stage.â€
A balanced view would be to regard positive and negative media opinion viewpoints as equally speculative. I am not a betting man, I am only interested in facts.
For instance, you recently trashed a citation from cashinmatress which referenced a mouthpiece place-man from Oil & Gas UK bleating for a bail-out. You rightly pointed out that this was a simple matter of industry self-interest.
However, there was a potentially devastating fact buried within that press-release, that fact being that, while the oil price has risen recently, the natural gas price has stagnated. North Sea production is about 50/50 oil/gas, so the barrel of oil equivalent price for UKCS production is around USD $40.
The potential danger of relying on positive media opinion, while ignoring negative factual data is obvious.
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Hamish has broken with tradition by posting statistics rather than opinion. IMHO, this is a lot better.
It'd be better still if he were accurate. For instance, what he gives as the figure for May is actually for the 28-day period 3 - 30 May inclusive and what he gives as the figure for April is actually for the 28-day period 5 April - 2 May inclusive.
He got those figures by hovering his mouse over the map here:
http://www.ros.gov.uk/public/news/press_re...eek8_28day.html
I would hasten to point out that these figures are not directly comparable with the figures I have been collecting and graphing over the months, as the figures from the map are for a rolling 28-day period, not discreet monthly samples.
The monthly figures have been moved in the RoS website relaunch and can now be found here:
http://www.ros.gov.uk/professional/eservic.../lpd_stats.html
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I'd assume it is likely this figure would now start to increase over the summer before dropping again when Uni starts up.
I think that's a fair assumption.
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Latest RoS figures out today for the month of May.
That's better Hamish, facts without opinion. It'd be better still if you were accurate. For instance, what you give as the figure for May is actually for the 28-day period 3 - 30 May inclusive and what you give as the figure for April is actually for the 28-day period 5 April - 2 May inclusive.
You got those figures by hovering your mouse over the map here:
http://www.ros.gov.uk/public/news/press_re...eek8_28day.html
I would hasten to point out that these figures are not directly comparable with the figures I have been collecting and graphing over the months, as the figures you got from the map are for a rolling 28-day period, not discreet monthly samples.
The monthly figures have been moved in the RoS website relaunch and can now be found here:
http://www.ros.gov.uk/professional/eservic.../lpd_stats.html
May's data should be released about this time next week, and I'm quite sure will show a similar uplift in prices to the figures you just transcribed.
The map gives us a very large and sudden increase in volume for Aberdeen - quite a reverse of the trend so far this year. Given this, I'm quite surprised that the price increase shown is as low as it its.
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ASPC For sale
Today (29 June 2009)
For sale : 1116
Added in last week : 78 (7%)
Added in last month : 302 (27%)
Over a month : 814 (73%)
compared to last month (25 May 2009)
For sale : 1202
Added in last week : 86 (7%)
Added in last month : 298 (25%)
Over a month : 904 (75%)
ASPC for lease
For lease today : 302 (highest I ever remember seeing it)
Added in last week : 22 (7%)
Added in last month : 134 (44%)
Over a month : 168 (56%)
compared to start of month
For lease: 281
Added in last week: 26 (9%)
Added in last month: 116 (41%)
Over a month: 165 (59%)
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Exactly. It's an oil town and the oil is running out.
Aberdeen is going the way of Dubai.
But colder.
Here is a graph of North Sea oil and gas production from the Department for Energy and Climate Change.
https://www.og.berr.gov.uk/information/bb_u...ctions_1108.pdf
Oil down 50% from 1999 peak.
Gas down 35% from 2000 peak.
The grinding certainties of geology take hold......
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Growing up there it's in order
Down to oil industry-landlords and shops etc seem to think everyone is making big bucks because with oil your all rich (never mind most oil industry workers came up from newcastle, did the 2 on 2 off and went home)
They don't, most people I knew lived in grotty sh1t holes
The city is dying, I kid not, when I go back to visit the folks I feel for the city, they don't even realise how out in the backwoods they are.
See above.
Indeed, there are many paradoxes to Aberdeen - it is truly a divided town. For instance, Aberdeen regularly features on those 'top ten places to live' surveys, yet also features in the 'bottom ten places with high levels of social exclusion and child poverty' surveys.
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It is not difficult to see that you are trying to convince yourself more than others, I'm sure others would agree
However, I've been doing a quick check on Aberdeen prices and it seems the place is in another reality.
I found a 4 bed detached for £165,000 but the lowest rent for a 4 bed was over £1250pcm!
Even 2 bed flats/apartments are being marketed at over £950pcm!
Rental prices are considerably higher than most towns in SE England and comparable to London.
Question
Why are rental prices so high in Aberdeen?
How do people afford them?
Why are purchase prices so low in comparison?
What is the strange phenonomen affecting the area?
It's a geographically-isolated primary sector economy, based upon resource extraction, fisheries and agriculture. Aberdeen suffers from the 'Resource Curse', including: lack of diversification; aspects of 'Dutch Disease'; corruption; excessive borrowing and rent-seeking.
The relatively high rental prices could be argued to be part of this phenomenon. The entire localities' economy depends upon 'passive income', so individuals play along with the result that BTL has been huge there. When we put this in the context of Paul Theroux's observation in his book The Kindom by The Sea we can see why relatively high rents are being sought in Aberdeen:
"It was only in Aberdeen that I saw the kind of tartan tight-fistedness that made me think of the average Aberdonian as a person who would gladly pick a penny out of a dunghill with his teeth."
edit.
BTW, my avatar is a graph from the same data set which Hamish posted earlier. My avatar shows the monthly YoY changes in Aberdeen house prices, which has been negative for the last 11 months.
Here are some other interesting graphs for Aberdeen:
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Ooooh! Fractional Reserve Nukes!
How do I nominate you for a Nobel Peace Prize for such a brilliant idea
?Heh! Unfortunately, not my own idea. Ken MacLeod comprehensively explores the concept in his 'Fall Revolution' series of speculative fiction novels, in which he speculates that a breakaway province of Kazakhstan manages to retain a significant portion of Soviet strategic missiles following the collapse of the USSR - these missiles are then 'time-shared' in the manner I suggested. What could possibly go wrong?
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Who can afford it? China or Saudi, maybe? But China has their own already, and would Saudi dare provoke Israel with what is still a toy relative to the latter's military?
Hmmm ...
Maybe it'll just have to be sold off to private industry. Virgin Nukes? EasyNukes? Tesco Value Range? Buy One Get One Free?
I'm with Ken MacLeod on this one...
We should offer Trident for hire on a time-share basis to the world community of nuclear 'have-nots'. In times of tension, states could contact the Royal Navy and bid competitively to secure first firing rights on a missile upon which they have been paying a small retainer. Time-share deterrence, as it were.
For a small fee (payable on easy terms), even the smallest, most technologically backward state can have access to and all the benefits of sophisticated cold-war proven mutually-assured-destruction nuclear deterrence technology. Border disputes instantly become a thing of the past all over the world. Superpowers must think again before riding roughshod over the sovereignty of weaker states. Regional bully-boy states suddenly become much less bellicose as the target of their bullying becomes a very different prospect after one easy phone call. World peace ensues.
No untidy proliferation of fissile material and the UK holding the balance of world power. Brilliant!
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Fair point, I wouldn't buy it. But somebody did, and will again when it hits the right price. My point is that it is MORE desirable than the flat you highlighted because of the area that it's in. Some of the other flats in the building look pretty nice though....
Oh, and I like bohemian as well!
Edit for clarity!
Try this...
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He has a huge vested interest in seeing prices fall. Frequently discussed and admitted to.
Yes, I'm happy to 'admit' to being delighted that I'll pay less for something I want to buy. Yes, I also use price comparison websites, and shop around for the best bargains in groceries. I do not see property as an investment, and would not be so foolish as to think of it as my pension. So, sudden and significant price falls are very welcome.
You use the word 'admit' as though wanting to pay less for something is some sort of borderline-criminal shameful activity. It is not, it is merely quite sensible and ordinary behavior. It is your wish that all others who buy after you should pay exponentially more over time which is odd; a world upside-down.
And a track record of ignoring or dismissing any positive news in favour of blatant crash ramping doom and gloom.Hardly "impartial".
We clearly disagree on the definition of 'positive', but should you wish to accuse me of 'ramping' (which has connotations of distortion, disingenuity and exaggeration), you'd better be prepared to level that same accusation at the Bank of England, the Registers of Scotland and National Statistics - all sources of the facts which I have provided over the weeks and months, those same facts which you have decided are 'crash-ramping doom and gloom'.
I don't see it that way, I see it as the unfolding of a fascinating social, political and economic phenomenon of which we are all part. There's nothing you or I can do to affect it either way. I'll definitely benefit from it, you might lose. That's just the way it is - there's no point in complaining or getting angry and abusive, you might as well get angry with the weather.
As far as my ignoring or dismissing any 'positive' news goes, absolutely all of what you have provided to counter the facts from my authoritative sources is at best 'churnalism' and at worst vested-interest kite-flying opinion, and is easily shown to be such. To date, all you have ever provided is opinions which happen to chime with your opinion. Is deconstructing poorly written and researched churnalism and opinion pieces dismissive? I most certainly hope so.
When and if the statistics demonstrate a change in their trends, I will, of course happily and impartially report that change, it will be in my own and other bears' material interest for me so to do. Simply because my profile shows me as a bear, and for the moment the facts remain bearish, it does not mean that I am partial; rather, it remains for now serendipitous.
I'll happily re-examine all the facts and statistics you have provided in support of your position over the whole year. But I don't think I remember you posting any facts and statistics. I eagerly await your response.
When you can provide facts to back up your opinions, then we might be able to have a proper discussion of them. Until that time...
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Here's a question for the Aberdeen forum:
... cut for brevity...
Any advice, tips, anecdotes.
Greatly appreciated,
Max
McGlashan is the one to ask about the market specifics here, as he keeps detailed and current data on just about everything Aberdeen. He is also very impartial.Hi Max,
I am cautious about offering specific forecasts, particularly when the recipient might use the forecast to make a decision which will affect them materially. I'm not in the same position as many other people, so all I can really say is that as a potential cash buyer, I'll not be putting my money into property in Aberdeen until the rate of change of the YoY figures goes positive for at least six months, and at a rate greater than my cash can get on deposit.
We are some way from this at the moment, and it would take a momentous v-shaped, immediate and sudden change in all the trends shown in the attached graphs for me to consider purchase within this year.
Have a look at the historical picture... zip file attached with salient graphs of historical Aberdeen house prices, market size, volume, etc along with unemployment and some lending stats from the Bank of England. Regular board readers will have seen most of this stuff before.
Good luck.
McG
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ASPC For sale
Today (22 June 2009)
For sale : 1127
Added in last week : 71 (6%)
Added in last month : 306 (27%)
Over a month : 821 (73%)
compared to last month (25 May 2009)
For sale : 1202
Added in last week : 86 (7%)
Added in last month : 298 (25%)
Over a month : 904 (75%)
ASPC for lease
For lease today : 297
Added in last week : 38 (13%)
Added in last month : 129 (43%)
Over a month : 168 (57%)
compared to start of month
For lease: 281
Added in last week: 26 (9%)
Added in last month: 116 (41%)
Over a month: 165 (59%)
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Investors shun North Sea despite rebounding oil prices
Already posted on main forum, but repeated here for those that want Aberdeen info only.
Thanks for that, cash.
It's not a surprise that price volatility is making investors cautious. Who would risk capital in a market which saw such a spectacular boom and bust cycle in such a short period last year?
What is a surprise is that the recent run-up in the oil price has not been accompanied by a corresponding gas-price surge. The gas price tracked the oil price all the way up last year. Why not this time?
I know that a significant increase in LNG transportation capacity has come on stream in the last 12 months, turning the natural gas market into more of a global market rather than a network-based market. Can this alone account for the price stability? What other factors are in play?
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The figures for total lending to individuals (incl. mortgages CC's, OD's, personal loans, HP, etc) are truly blood-curdling. Lending has totally collapsed, the fibrillating fluctuations over the last few months are within a range significantly lower than total lending in 1997.
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fflump is spot on!
I don't think you can afford to have 10 years of expensive booze and cheap women these days. You have to plan for the future as well. I'm three quarters of the way through my "ker-razy" twenties and I do regret not getting serious about my finances sooner. The first five years were blinding though to be fair!
The bugger of it is that putting in the "hard yards" when you're young (getting in good habits, compound interest, no dependents etc) is when you get the most benefit. Shame this co-incides with the exact same time that you want to indulge in some hardcore silliness.
It would be interesting to know the financial state of the average British 30 year old with regards assets, home -ownership, pensions, debt etc. Anyone seen any stats in this regard?
Just my personal experience and opinion, again, but if you can find a way to make the hardcore silliness pay...
There are very few ways to financial independence; a salary is not one of them. During your 20's you are the most social animal you will be in your life. During this time you can build up 'intangible assets' every bit as important (if not more so IMHO) as 'tangible' ones. Over time, if cultivated carefully, these intangibles will net you the opportunity to step off the hamster wheel and control your own destiny with complete independence, without fear of market fluctuations or the whims of employers.
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His plan involved being responsible while he was young, buying a proper house worth far more, with a bit of land and garages, paying it off by 35, and already having the enjoyment of it for ten years by that point.
I am not surprised you fail to see the difference, but almost everyone else can see it clearly.
The difference is clear. What I'm about to type is a matter of opinion, and it's probably where we differ the most, Hamish.
Being responsible is not something I associate with being young. I'm sure we all expect to live longer lives than our grandparents' generation, so there's plenty time in life to settle down - but you're only young once. Being young is most certainly not for working every hour god sends to service debt; being young is all about goofing about, being irresponsible, experimenting with all sorts of things, trying stuff on, and changing your mind a lot - this is the post-modern age - it's all up for grabs! Not to try is not to know. If you can't do it when you're young, when can you do it? Above all, being young is for sha99ing. I hardly ever slept in my own bed during my 20's. Woo hoo! Rock-and-roll! Etc, etc. How can you know where your talent really lies if you're chained to a desk 50 hours a week?
Having the 'enjoyment' of living in a mortgaged house for ten years pales to insignificance compared to the enjoyment of slacking off and tasting all flavours.
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McGlashan, now you're moving on to selective quoting out of context?????
Oh my, now you're really getting desperate.
The selected text, within the context of the post and thread.....
The context within which I quoted you was context of offering cashinmattress another of your egregious pronouncements for his sig. I did you the favour of offering a quoted standpoint of yours which only shows you to be consumed with pride, envy and wrath.
I am not a religious man, but I believe that the full quotation of the exchange which you provided demonstrates just about the full range of the seven deadly sins.
It is clear that the only guaranteed way to financial security is to buy as much as you can, as young as possible, and try to pay it off as early as you can afford to.There are but few ways to financial independence. A pay packet combined with debt is most certainly not one of them.
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Oh FFS.
I know you put up some great figures and statistics McGlashan, and your research is second to none, but must you carry on such pointless debates with the resident ramper?
Any time you put up some numbers that may be detrimental to McSpamish's Aberdonian utopia, we are all subjected to pages upon pages of your logical debate followed by personal attack and the same old tired rhetoric from you know who.
I really don't know why I do it either. Perhaps I'm concerned that some lurker might be hoodwinked by his semi-plausible headlining and flat-earth mixing of cause and effect. "A little learning is a dangerous thing."
It also bothers me that he insists that I am some sort of doom-monger. I am not. I have nothing to fear from either financial collapse or swift recovery. The things about which I care the most are unaffected by how much 'stuff' I or anyone else possesses. My position is totally neutral - Hamish's fear is palpable. The unfolding of the financial crisis, its accompanying house price crash and people's reactions to them are of great interest, that's all. Like a rare planetary conjunction, or the unearthing of a hitherto unknown paleontological specimen.
Plus you give too much credit to the man who insists that a market correction is tantamount to stealing from his granny.He also says:
It annoys me that the feckless may now be able to buy a house, when they don't really deserve it. It annoys me that people who made poor choices in life, may now have the opportunity to catch up with those who were responsible. It annoys me that so many people who are clearly unemployed, underemployed or benefits scroungers, have a forum to pat themselves on the back and congratulate each other on their poor life choices.
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We've heard the primary sector economies speech before, we know Aberdeen is heavily reliant on oil, fishing, agriculture, etc, and we know low Oil prices have had a negative effect on local business.
Yields as well as prices are important in determining total wage levels in primary sector economies.
But there is no denying the fact that regardless of cause and history, an area with 10% unemployment is going to have bigger house price falls than an area with 3% unemployment.All other things being equal, yes. But there's something else in the mix. Availability and price of credit have been and will continue to be the major factor determining the trajectory of house prices. The unemployment surge is a secondary symptom of the banking crisis, it is not (yet), nor may it prove to be, a major cause of house price falls.
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Ahhhhh, McGlashan, there you go again trying to put the worst face possible on what is actually good news, given the recession.
The reality is that unemployment in Aberdeen city is now at 3.4%. And that to date, the recession has resulted in only around 1200 more people in Aberdeen, (out of a population of 200,000 or so), losing their jobs. Now, I completely agree this is tragic for those involved, but it's still significantly better than the averages for Scotland and the UK.
Most local authorities would give their (insert appendage of choice) for an unemployment rate that low in the middle of a recession.
Yet further confirmation that Aberdeen is doing very well so far, and better than most by a long shot.
I'm not trying to put any sort of 'face' on the news. I'm just reporting it.
You are right to point out that the upswing in Aberdeen's unemployment figures does not bring the total rate anywhere close to the national average. However, there is quite a lot to the economic lanscape relating to unemployment of which you are clearly ignorant.
Primary sector economies (agriculture, fisheries and resource extraction) have a lower equilibrium (or 'natural') rate of unemployment than economies based upon manufacturing, retail and services. In this second category a higher equilibrium rate of unemployment is required to maintain the profit rate. As the economy approaches full employment, wages are bid up and a crisis of profitability ensues (UK 1960 - 1973). In primary sector economies, no such 'reserve army of labour' is required, as wages are determined by yields and commodity prices, while the profit rate remains constant. If you look on National Statistics at other UK areas with large primary sectors, you will see similarly low historic and current unemployment rates.
What is truly alarming about Aberdeen's (and Aberdeenshire's) dramatic relative increase in unemployment is the indication that our primary sector industries cannot maintain the profit rate under current yields and prices, regardless of wage levels.
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The Scottish unemployment stats have just been released. While the rate of increase is slowing, Edinburgh shows a 77% YoY increase in the claimant count.
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McGlashan,
any chnces you can post last months stats side by side so we can see if any growth or major changes.
Find your aspc posts very interesting so would like to keep tab on stats esp on rental side..
Hiya DBP,
Good suggestion - willdo from now. There's been no significant changes in quantity or proportions in the last three weeks. When I've collected a big enough data set I'll graph the information.
edit.
The Scottish unemployment stats have just been released. Unemployment in Aberdeen continues to rise in absolute and year-on-year measures and is now an alarming 76% up YoY.
These figures are for Aberdeen City local authority area only. I've not graphed the figures for Aberdeenshire, but the situation is significantly worse in the hinterland. The unemployment claimant count has more than doubled (it is up 105%) YoY in the Shire.
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15084
Ft.com - Uk Lending Suffers Setback
in House prices and the economy
Posted
UK lending suffers setback
(my emphasis)