Is Prime London Crashing? - Merged Threads

[terryturbojr]

Clever money are already selling off the Prime London:

http://www.independent.co.uk/news/business/news/grosvenor-estates-sells-off-prime-london-property-over-market-fears-9301438.html

Fears over an overheating market have led the historic owner of swathes of Mayfair and Belgravia has sold off hundreds of millions of pounds worth of super prime property in London.

....

Chief executive Mark Preston insisted the company was not calling the top of the market. But he added: Its certainly true that part of the reason for making the sales we did last year was because we had a concern about the level of pricing and its sustainability, and the extent to which it was going to continue Inevitably one has a concern over what happens next.

Reading that they seem to be taking out of prime and then pumping the cash into cheaper areas of London though. Rather than removing all together.

[TheCountOfNowhere]

Reading that they seem to be taking out of prime and then pumping the cash into cheaper areas of London though. Rather than removing all together.

Clever money will already out of the london mega bubble market.

Edited April 29, 2014 by TheCountOfNowhere

[zugzwang]

Clever money will already out of the london mega bubble market.

Clever money will already out of be shorting the london mega bubble market.

[mewParadigm]

This was in the Evening Standard with the headline "Grosvenor Estates sounds alarm on London’s hot property", giving it a very high profile with commuters. http://www.standard.co.uk/business/business-news/grosvenor-estates-sounds-alarm-on-londons-hot-property-9301738.html

Meanwhile, the Guardian raises eyebrows, drawing parallels with the last boom, at the prospect of Elton John performing at a party for buyers of flats in Battersea Power Station. http://www.theguardian.com/business/2014/apr/29/elton-john-housebuyers-battersea-power-station

And finally, looking at some people's favourite leading indicator, Barrat shares are down again, now about 22% below their early March peak.

Maybe there is a pattern forming.

[Venger]

What an opportunity the last 12 months was for some to sell off their property portfolios.

have you sold yet ? Or are you buying ? I know which I'd rather do !!!

Selling up elsewhere, it seems... or one of his connected companies. How dare people moan about the rent !?!

The Duke, Britain's eighth richest man, bought the Paul Bert and Serpette markets in Saint-Ouen, north of the city in 2005 for a reported price of €50 million (£41.6 million).

He has now sold them for a £16million loss for €30 million

23 April 2014

The Duke, Britain's eighth richest man, bought the Paul Bert and Serpette markets in Saint-Ouen, north of the city in 2005 for a reported price of €50 million (£41.6 million).

But it has now been revealed that he has bailed out of the market, the world's largest selling antiques, taking over a £16million hit and selling it on to a French investor for a reported €30 million.

...However, the Grosvenor Group say that the rents had not been increased significantly and they were just trying to simplify a complex system.

William Delannoy, the mayor of Saint-Ouen, whose family also run a stall in the market told the Times: 'He saw the flea market as a property investment and not as the acquisition of a small part of France’s heritage.

'Given the tensions, Grosvenor preferred to sell rather than trying to understand these atypical markets.'

http://www.dailymail.co.uk/news/article-2611131/Shopkeepers-revolt-Duke-Westminster-forced-sell-famous-Parisian-flea-market-16-million-loss-stall-holders-accused-behaving-like-feudal-landlord-jacked-rent.html

Also where's all Crashman's Begins buyers wanting to pay €49.9m, or €45m, or €42m, or €35m. Isn't there constant demand with forever eager buyers for everything?

Atypical... not conforming to type; unusual or irregular. Prepare for more unusual market that also go down, not just frenzied up and up.

[Damik]

http://www.ibtimes.co.uk/grosvenor-group-sells-240m-belgravia-mayfair-houses-amid-london-property-bubble-fears-1446609

Estate agency Knight Frank has pointed out that super-prime London markets are seeing property price growth slowdown. But outer areas such as Islington and Wandsworth are reporting significant house price growth as investors chase greater returns outside of the prime areas.

...

Demand is intense and the supply is weak, which has helped drive up London house prices and rents.

...

Grosvenor's are not the first concerns from property investors that a bubble has formed in the prime London market. Noted property developer Nick Candy, one of the men behind One Hyde Park, the most expensive block of flats in the world, has said he does not think there is enough demand to justify the supply of new properties in areas such as Mayfair and Belgravia, where a number of building projects are underway.

Edited April 30, 2014 by Damik

[Damik]

the supply volumes and frequency is going up as we speak. get the popcorn ready. anybody a studio for £1mill+ ???

[Damik]

Oh no, the party is over ...

https://uk.finance.yahoo.com/news/londons-prime-property-party-may-135646707.html

Once showered with cash by wealthy Arabs, Russians and others seeking a luxury London bolthole, the capital's prime property market may finally be showing signs of coming off the boil, experts said on Wednesday. High-end central property prices have soared in recent years as wealthy foreigners pumped millions into handsome townhouses and luxury period apartments mainly in London's fashionable West End. But some experts question whether a bubble has formed, and as growth slows, whether it may be about to pop.

...

"We do not know when a correction will occur, but our own analysis indicates the prospect of a correction is becoming more likely," he added.

...

But there is consensus that the rate of price growth is slowing from the near-20 percent year-on-year surge seen in 2010.

...

However, in recent weeks Greece returned to the international bond markets with a well- received sale of sovereign debt, while Spain's moribund economy is finally showing signs of life, new growth data has shown. This has meant there is less money flowing into central London property from southern Europe, analysts say.

...

For some other buyers, luxury London prices are now simply too high. "The prime values have reached a level now that some people are starting to balk. At the same time, we've had the appreciation of sterling," said Matthew Pointon, property economist at the Capital Economics thinktank.

...

Prices in exclusive enclaves such as Mayfair, Chelsea and Belgravia are not rising as quickly as they used to, said Tom Bill, associate at Knight Frank's Residential Research department.

...

Knight Frank has seen reduced interest from wealthy Europeans fearful for their cash -- 2013 was the first time in four years they recorded no Greek-domiciled buyers.

...

Uncertainty over mooted tax changes are also playing a part, with property hunters holding off until after next year's general election, Bill said.

[tomandlu]

Uncertainty over mooted tax changes are also playing a part, with (foreign) property hunters holding off until after next year's general election, Bill said.

They don't like it up 'em...

[winkie]

Clever money will already out of be shorting the london mega bubble market.

[honkydonkey]

I liked this comment from the daily mail comments section on 'house prices to the moon'

House prices are anchored by the elastic band of affordability. Lubricate the elastic band with low interest rates and help to buy schemes and it will stretch a little bit further. Remove the elasticity and it will snap back. Maybe this time it will be different but I wouldn't bet my house on it.

[Damik]

Chinese house market crash and sell off should trigger London sell off as well. If you loose money you will liquidate your holdings into the cash:

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100027199/chinese-anatomy-of-a-property-boom-on-its-last-legs/

[wherebee]

Chinese house market crash and sell off should trigger London sell off as well. If you loose money you will liquidate your holdings into the cash:

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100027199/chinese-anatomy-of-a-property-boom-on-its-last-legs/

be careful not to over simplify here. a proportion of the chinese rich/middle classes caught up in a crash will not liquidate any london holdings as i) they will try to dodge creditors by not declaring it and ii) they will see it as the last jewel to sell.

[Venger]

From talking to people, it seems there are still many in London witholding their cash waiting to pounce as they too believe some downturn is imminent. That's the thing though, prices will never fall far enough because these people are ready to deploy their capital at a moment's notice to shoot it back up. I think many will be surprised at how rich a large portion of Londoners actually are. They are just waiting for what they think is the opportune moment.

There a ITV Tonight Show with 2 property-investors saying exactly the same thing in 2007. "Demand is always there whenever prices dip to push prices on again". They gave another investment property a lick of paint, and said it was now valued at £450,000 more than they bought it for just 12 months before.

I'm more angry with the bonehead pathetic HPCers who threw non-owners under the bus with their excuses for VI property-heads last time around.

Who did you think was going to pay the cost if debts were forgiven, intervention to help homeowners, QE, rates floored ect on hyperinflated property values, as you came outdid each other for buyers having jumbo mortgages "They just wanted a home / media to blame / banks lent them too much" ect ect x 100s???? The very people who resisted buying, rented, didn't upsize, and waited, paying even more (time / opportunity).

And these 'victims' have learned nothing. Sympathetic nonsense, to excuse greed and entitlement and especially protecting the older owners high values.

“Math and fundamentals are coming back to residential RE. 2015=2008″

That is the funniest thing I have heard on this site!!! What? You are serious??? Math and fundamentals went the way of unicorns! They are in your fantasies but have little to do with “reality”. Howzing to go up fo-eh-vah!!! That is why How-zing will go up fo-eh-vah!!!

This time is different… Because rich “Red” Chinese will buy up “prime” areas fo-eh-vah!!!!

and “there is a lot of “money” aka “cash” aka “debt” out there” and “look at history 1987 – 2014 where everyone got rich with real estate” and “holding cash is losing money” and “where else are you going to put your money” and

transactions are up at higher prices, so that means how-zing is back baby! Quick, buy now or forever be priced out!!!!

We need interest rates to go negative. I mean really negative like “-5%” for a home loan. The banks pay you to borrow money. That would make a lot of sense in this unicorn fart fuelled e-con-oh-my…

[tomandlu]

I'm more angry with the bonehead pathetic HPCers who threw non-owners under the bus with their excuses for VI property-heads last time around.

I think you make far too much of this. Have some sympathy, don't have some sympathy - it really doesn't make any difference, and it changes nothing. All it really signifies is who does one attach most blame to - the buyers or the banks and government policies that supported this madness. I mostly blame the latter, you mostly (entirely?) blame the former, and neither of these beliefs will affect whether the sun rises tomorrow.

[Bloo Loo]

I think you make far too much of this. Have some sympathy, don't have some sympathy - it really doesn't make any difference, and it changes nothing. All it really signifies is who does one attach most blame to - the buyers or the banks and government policies that supported this madness. I mostly blame the latter, you mostly (entirely?) blame the former, and neither of these beliefs will affect whether the sun rises tomorrow.

both are to blame as both are human parties to the crime...both sides are convinced they are onto a winner.

In the case of Liar Loans, both sides lie to get the deals done.

Denial comes later, and not until it all breaks down.

[Crashman Begins]

Selling up elsewhere, it seems... or one of his connected companies. How dare people moan about the rent !?!

http://www.dailymail.co.uk/news/article-2611131/Shopkeepers-revolt-Duke-Westminster-forced-sell-famous-Parisian-flea-market-16-million-loss-stall-holders-accused-behaving-like-feudal-landlord-jacked-rent.html

Also where's all Crashman's Begins buyers wanting to pay 49.9m, or 45m, or 42m, or 35m. Isn't there constant demand with forever eager buyers for everything?

Atypical... not conforming to type; unusual or irregular. Prepare for more unusual market that also go down, not just frenzied up and up.

http://uk.mobile.reuters.com/article/idUKKBN0DI0NY20140502?irpc=932

Overheating? London sets record with 140 million pounds apartment Sale

Fri May 2, 2014 4:26pm BST

POLITICAL THREATS

The wall of money chasing a finite amount of property has sent luxury London prices soaring almost 80 percent since 2009, and while plutocrats' ostentatious purchases grab the limelight, prices have rocketed even in poorer areas.

Prime central London house prices have risen 79.4 percent since March 2009, against a 40.6 percent increase in Greater London house prices over the same period, according to data from Savills.

Candy, who with brother Christian started out in 1995 with a 6,000 pound loan from their grandmother, said the main risks to the market were changes in government policy, a rise in interest rates or oversupply at the top end.

Changes in govtment policy - not going to happen

Rise in interest rates - not any real rise (printy printy)

Oversupply at the top end - I've seen so many new flats being built in surrounding areas of London & still being built that I think they're leaving the top end well alone.

Edited May 4, 2014 by Crashman Begins

[tomandlu]

both are to blame as both are human parties to the crime...both sides are convinced they are onto a winner.

In the case of Liar Loans, both sides lie to get the deals done.

Denial comes later, and not until it all breaks down.

This is the internet - stop being reasonable.

[Venger]

I think you make far too much of this. Have some sympathy, don't have some sympathy - it really doesn't make any difference, and it changes nothing. All it really signifies is who does one attach most blame to - the buyers or the banks and government policies that supported this madness. I mostly blame the latter, you mostly (entirely?) blame the former, and neither of these beliefs will affect whether the sun rises tomorrow.

From my pov, a harder line held by younger people, and older people who actually cared about right and wrong (and less about the value of their own homes), with non-sympathy for the buyers pushing and falling over one another to pay ever higher stupid prices, would have checked the authorities from global reflation of trillions and trillions and other intervention policies such as HTB.

On another forum I was reading last night someone called it an echo-bubble. It occurred to me it was a bit like the sun expanding, and at risk of going supernova, before shrinking dead. Then again I don't much by way of science of such things, but then many younger PHD scientists who toiled their way through education, are only fit to be HTB1 fodder these days with no Bomad, to protect values for older owners and those who massively over-borrowed for housing before them. There's always the sun... always the sun. That's great.

• We just had a massive bubble collapse. This is likely an echo bubble do to misallocation of capital.”

I actually studied economics and the classical economists do not believe in bubbles so until they are replaced there are no bubbles.

• In places like LA, half of the foreclosures from 2007-2010 have not made it down the pipeline. This is Zillow / Dataquick data.”

In the new, new, new, new normal, no more foreclosures. We will only need to pass legislation to outlaw them, problem solved. Or continue to hold them off the market.

• China is about to have its version of US 1929 or Japan 1990. Take your pick; it won’t be pretty, and from the price of lumbar to stopping real estate money laundering, it will affect the US housing market.”

There is soooooo much monies in “Red” China that they will ne-vah stop buying “prime” real estate.

• “Or, you can be oblivious to all these facts and pretend this is all normal. It ain’t.”

One man’s facts are another man’s fiction. There was a time when the majority of people believed that the world was a sphere. Well, Tom Friedman the great e-con-oh-mist has proved that the world is flat as a pancake. Many scientific facts are being proved wrong so don’t hold on too tight to your facts.

WTF is up with all the math? Have we not all learned by now that math has been proven scientifically false? Math, gravity, physics, etc. have gone the way of alchemy and we have replaced them with new sciences like unicorn fartology, rainbowology, this time is differentology, etc… Come on, you are sounding like my grandpa. “Math”, “percentage”, “economy”, what quaint concepts… Horse, buggy, buggy whip kinda makes me chuckle…

[Venger]

Changes in govtment policy - not going to happen

Rise in interest rates - not any real rise (printy printy)

Oversupply at the top end - I've seen so many new flats being built in surrounding areas of London & still being built that I think they're leaving the top end well alone.

These are some of the reasons you bought not long ago?

[macbeth79]

be careful not to over simplify here. a proportion of the chinese rich/middle classes caught up in a crash will not liquidate any london holdings as i) they will try to dodge creditors by not declaring it and ii) they will see it as the last jewel to sell.

I have anecdotal evidence on this, somebody i know of was selling their house in Leyton offers around £560k were the value expected/wanted they got an offer of £750k from a Chinese person sight unseen, blowing all the other bids (approx 20 bids) out of the water which ranged from £350-£530k, not sure if they have the money to complete.

[19 year mortgage 8itch]

I have anecdotal evidence on this, somebody i know of was selling their house in Leyton offers around £560k were the value expected/wanted they got an offer of £750k from a Chinese person sight unseen, blowing all the other bids (approx 20 bids) out of the water which ranged from £350-£530k, not sure if they have the money to complete.

Are they sending your friend a cheque for a million pounds and asking for them to arrange delivery and send the change back via western union?

[macbeth79]

Are they sending your friend a cheque for a million pounds and asking for them to arrange delivery and send the change back via western union?

LOL no Paypal

It will interesting to see what happens.

[wherebee]

LOL no Paypal

It will interesting to see what happens.

if it is someone in China, be careful of the currency restrictions in case it gets chased. best if it comes from a western bank.

[Venger]

I have anecdotal evidence on this, somebody i know of was selling their house in Leyton offers around £560k were the value expected/wanted they got an offer of £750k from a Chinese person sight unseen, blowing all the other bids (approx 20 bids) out of the water which ranged from £350-£530k, not sure if they have the money to complete.

What do you expect when China has followed UK and USA with massive financial easing?

Simon the gardener and Jodie the hairdresser outbid me paying £340,000 in 2006 for a semi not worth half of that, but hpcers falling over one another to offer and outdo such buyers excuses. 'They just wanted a home.' / 'They only knew HPI and couldn't expect different.' / 'You can't expect them to put up with insecurity of renting.' (That one was repeated just the other month for another bubble 2.0 buyer). They're buyer competition, outbidding others, not superiors.

Are you a scientist or something; you look like one in that lab-coat if that's you in your avatar. Good luck getting ahead by that alone. Elderly landlord woman miser (owning 7-8 homes all outright in London.. family inheritances and divorce windfalls over the years).. friend of a relative. I looked up her address last night. House a few doors down went on market in 2013 at £50 short of £2 million pounds. It sold for £1.5m, but nevertheless, fortunes above what she acquired it for. Excuses have allowed all this misallocation.

I wanted to find evidence of China slowdown in buying in UK last night, but then found one of the main China property-portals... loads of property page listings even for Manchester. Ran this through a web-page translator: http://www.juwai.com/UK/