Something Is Happening

[koala_bear]

Oh, no, I agree that foreign investors have driven up prices, but that was in the days of good yields and global financial chaos. There are now more arractive investment options, and we know two things for certain: yields on prime London are now below 2%, and prices in prime London are falling.

The point that prices will carry on rising because Asian people like London and "dream of living here", even in the face of falling property value and extremely low yields, is however just not very credible, so as a claim it would need some evidence to support it.

Thread I started on the subject based on info in a guardian article a few days ago, where I questioned whether there was any logic in the foreign buyers still piling in or them being able to rent the places out to get sensible yield.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=190512&st=0

From the guardian article

Recent research by property broker Jones Lang LaSalle (JLL) found that overseas buyers accounted for more than half of London's new home buyers last year.

Seems they are still quite happy piling in...

[Gigantic Purple Slug]

Given that this influx of Asian investors is quite a recent phenomenon, have Asian people only recently become fearful about the risk of confiscation?

No I think they were always fearful, but it's about accessibility and also the amount of money they have.

My guess is post 2000 is the date for the rise of the super rich in China, India, Russia etc. Then you have several high profile cases of trials of the super rich.

My guess is the way it works is the billionaires do it first, then there is trickle down to the less wealthy. As local businesses see there is a market they develop the necessary services (bringing people in from overseas, showing them round with translators, dealing with legal issues). All this takes time to build up to significant volume.

[thecrashingisles]

Seems they are still quite happy piling in...

The greater the percentage of total demand they represent, the more the market is fragile. If they stop buying for an instant the effect on the overall market will be devastating and it will collapse under its own weight.

[koala_bear]

The greater the percentage of total demand they represent, the more the market is fragile. If they stop buying for an instant the effect on the overall market will be devastating and it will collapse under its own weight.

Exactly.

[drunkincharge]

Exactly.

There are two facts that stick in my mind.

That Brown nosing peddlar of crap Lord Sugar has put almost his entire 8oom fortune into prime London property because he thinks that over the next decades China will produce upto 100 000 billionaires. And secondly that c0cksucking warmonger Blair has been buying London property for his portfolio and is not stopping.

People like this should know what is round the corner and are unlikely to be wrong footed by a property crash,although there is always a first time.

[Dorkins]

No I think they were always fearful, but it's about accessibility and also the amount of money they have.

I agree that it's about the amount of money they have. I'm pretty sure they are borrowing it for things to be inflating as quickly as they are. It's just another credit-driven bubble, and it will burst when borrowers are no longer able to service their debts, same as last time.

[Byron]

There are two facts that stick in my mind.

That Brown nosing peddlar of crap Lord Sugar has put almost his entire 8oom fortune into prime London property because he thinks that over the next decades China will produce upto 100 000 billionaires. And secondly that c0cksucking warmonger Blair has been buying London property for his portfolio and is not stopping.

People like this should know what is round the corner and are unlikely to be wrong footed by a property crash,although there is always a first time.

When you already own a big chunk of prime London, and are getting worried.

If you are also a big name, it is easy to put out feelers, even buy some, whilst marketing your own.

[Harry Monk]

That Brown nosing peddlar of crap Lord Sugar has put almost his entire 8oom fortune into prime London property because he thinks that over the next decades China will produce upto 100 000 billionaires.

Just 20 years ago, the average Chinese was grateful to own a bicycle. We've been so desperate to give them our wealth...

[Bruce Banner]

Anybody noticed any more "things happening" or is it just another false alarm.

Every time I look on Rightmove there are more reductions in my area, but that's nothing new.

[dances with sheeple]

Anybody noticed any more "things happening" or is it just another false alarm.

I have my rent down to 400 pm, central Edinburgh, down from 450 pm in last flat. This flat is slightly smaller, but similar size to one I had in 1998 at 350 pm. The rent deflation and HPC continues here, landlord of the last flat thinks he will be lucky to get 2002 price.

[dances with sheeple]

The greater the percentage of total demand they represent, the more the market is fragile. If they stop buying for an instant the effect on the overall market will be devastating and it will collapse under its own weight.

True, and smaller "investors" will burn when that happens?

[wonderpup]

I seriously can't see lots of Chinese people purchasing an expensive asset in a far away country with a falling value and extremely low yield. That would be quite insane. It made sense to buy London property in 09/10, but it makes no sense now. Prime prices are falling so the evidence doesn't appear to support your view.

I don't think yield is the issue for many of these people- it's more about getting their wealth out of China before it reverts to type and real communism makes a comeback.

Corruption is all very well- but hanging onto the gains is the real trick. There are many nuclear families from China to be found living in the richer regions of the west- all that's missing is dad, who is still back home filling his boots.

When the elites are moving not just their money but their families as well that can't be good.

[mfp123]

I don't think yield is the issue for many of these people- it's more about getting their wealth out of China before it reverts to type and real communism makes a comeback.

Corruption is all very well- but hanging onto the gains is the real trick. There are many nuclear families from China to be found living in the richer regions of the west- all that's missing is dad, who is still back home filling his boots.

When the elites are moving not just their money but their families as well that can't be good.

indeed its not really about yield, after all, theyre getting plenty of wealth from their day job.

if youve got a lot of money, ultimately what do you want money for. if you make lots of money, only making more paper money isnt going to do that much for you, you also want something tangible to spend your money on too. you also want to get "stuff" for what youve earned.

im sure if people in the UK had lots of money they wouldnt bat an eyelid at buying a house in the US, or France if they could afford it, just for the fun of it.

[dances with sheeple]

indeed its not really about yield, after all, theyre getting plenty of wealth from their day job.

if youve got a lot of money, ultimately what do you want money for. if you make lots of money, only making more paper money isnt going to do that much for you, you also want something tangible to spend your money on too. you also want to get "stuff" for what youve earned.

im sure if people in the UK had lots of money they wouldnt bat an eyelid at buying a house in the US, or France if they could afford it, just for the fun of it.

Yes, maybe, but there is a lot more you can do with tons of money than buy London property, you could enjoy a great lifestyle just staying in hotels and renting great houses around the world, who cares about an overpriced lump of concrete and glass on their deathbed? The reality is that the average Londoner is on interest only, and is going to be burned when the big investors pull out of prime and crash the market? and the average investor is trying to make money on London property, and will also be burned when it all goes south, those with more money than they know what to do with are a negligible section of the market?

[dances with sheeple]

indeed its not really about yield, after all, theyre getting plenty of wealth from their day job.

if youve got a lot of money, ultimately what do you want money for. if you make lots of money, only making more paper money isnt going to do that much for you, you also want something tangible to spend your money on too. you also want to get "stuff" for what youve earned.

im sure if people in the UK had lots of money they wouldnt bat an eyelid at buying a house in the US, or France if they could afford it, just for the fun of it.

Many did, and were then wiped out?

[Mr. Miyagi]

Been an interesting spring bounce in my part of Wales. There have been a steady number of listings, 39 new or price deductions in the last 14 days alone (lots still over priced), hardly any SSTC and lots of reductions. Today saw an impressive price reduction on a 3 bed detached bungalow.

http://www.rightmove.co.uk/property-for-sale/property-38424332.html

It's fair to say any notion of the annual spring bounce is dead in the water here. Great for me as we've agreed to purchase our current rental early next year, but no price as yet.

[the_duke_of_hazzard]

Been an interesting spring bounce in my part of Wales. There have been a steady number of listings, 39 new or price deductions in the last 14 days alone (lots still over priced), hardly any SSTC and lots of reductions. Today saw an impressive price reduction on a 3 bed detached bungalow.

http://www.rightmove.co.uk/property-for-sale/property-38424332.html

It's fair to say any notion of the annual spring bounce is dead in the water here. Great for me as we've agreed to purchase our current rental early next year, but no price as yet.

Seeing lots of stuff going under offer in my part of London now.

Looks like it was a false dawn

It's the "realistically priced" stuff though that's moving. And you can't tell what prices they actually go for until they show up on the LR...

[lastlaugh]

those with more money than they know what to do with are a negligible section of the market?

Totally agree. I'm getting a bit bored with people on this site rehashing the media myth of the London safe haven. There's very little evidence to support it. I don't doubt that foreign investors have spent a lot of money in London and the UK. But I also don't doubt they will be leveraged, probably highly levearged. It's what propert bulls do, and it's what the entire property industry encourages. Why buy one off-plan, new-build flat, in an unpopular part of East London when you can leverage up and buy five? "The agent assured me prices would double in 10 years!" These "investors" have been sold a pup and will get burnt the most. Just the same as so-called savvy UK investors in Spain, Florida, Riga, Budapest, Bulgaria, etc, etc, etc ........

[Saving For a Space Ship]

Been an interesting spring bounce in my part of Wales. There have been a steady number of listings, 39 new or price deductions in the last 14 days alone (lots still over priced), hardly any SSTC and lots of reductions. Today saw an impressive price reduction on a 3 bed detached bungalow.

http://www.rightmove.co.uk/property-for-sale/property-38424332.html

It's fair to say any notion of the annual spring bounce is dead in the water here. Great for me as we've agreed to purchase our current rental early next year, but no price as yet.

Are those ugly clone-bungalows prefabs ?

[TwoWolves]

An update...

Last week we got a flier through the letterbox claiming a house four doors down from us had sold. This property has been on the market eighteen months and its a nice house. Started at 500K, then 450K and now 425K.

Its back on the market today.

The number of properties in my target area has swollen 20% in the last two weeks, no new reductions but nothing has sold. A house listed last year is back on at 15% less, lovely place too with a small pool.

I get the feeling that the local boomers know the last gasp of a peak is here and maybe gone. Its all downhill from here with no chance of a recovery in sight. I can't understand the press pieces claiming HPI is on again - I see no evidence of that. Looks like the buyers are sitting on the sidelines waiting for more reductions (same as me).

[GloomMonger]

Wrong properdee investment mate another EA sent me this ... 'Knight Frank recently published in their Hot Spots report that the Nine Elms regeneration area was one of particular interest with the American & Dutch Embassies, The Battersea Power station development and the extension to the Northern Line this area will be achieving 140% capital appreciation by 2016.'

Before I buy 10 I am just waiting for the written guarantee of the 140% by 2016.

So they are redeveloping Battersea Power Station and building a local tube, what a coincidence! I can actually see the BPS apartments going up at least 100% because of this. Shame these apartments aren't affordable or did they have to build a quota of social housing?

[lastlaugh]

So they are redeveloping Battersea Power Station and building a local tube, what a coincidence! I can actually see the BPS apartments going up at least 100% because of this. Shame these apartments aren't affordable or did they have to build a quota of social housing?

The developers have to pay for the tube extension. It's been a pre-condition for years, which is why the BPS has been empty all these years. Nobody could make the sums work. I doubt anyone can make the sums work now either.

[Gigantic Purple Slug]

Well, just reviewed the LR results in my area (SE).

Volumes on the market are pretty consistent with what normally appears on the market at this time of year, apart from 2 bed flats which are up quite a bit. Asking prices are still high for the 2 bed flats, plenty of kite flying with what I believe is little requirement to sell quickly. Little evidence of aggressive price reductions.

House prices continue to be somewhere a little above 2007 prices, although volume is still thin.

If you got into a flat pre about 2005 you're generally making a profit, post 2005 generally a loss or static.

So generally, naff all is happening in my part of the world.