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disenfranchised

Property Cannot Possibly Drop 50% - Can It?

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Was just having one of my periodic 'but what if the prices stay this stupid forever?' thoughts and decided to look overseas.

I went to Grenoble a couple of years ago - its a small city surrounded by the Alps. Lots of IT & tech jobs. An excellent half day drive from Monaco & Cannes. Great (cheap) local tram system, TGV, Airport... So I thought I would see what £250k would buy me there. This is the very first house I found:

http://www.green-acres.com/en/properties/16160a-301146904.htm

How much would be up for in near Leeds or Manchester, let alone the South East? I saw a 3 bed semi in Northampton up for 25k more last week - this has 2 bathrooms, 4 bedrooms, 2 garages and a swimming pool!

And people would have us believe there is something magical about UK property?

tick, tock, tick, tock....

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Was just having one of my periodic 'but what if the prices stay this stupid forever?' thoughts and decided to look overseas.

I went to Grenoble a couple of years ago - its a small city surrounded by the Alps. Lots of IT & tech jobs. An excellent half day drive from Monaco & Cannes. Great (cheap) local tram system, TGV, Airport... So I thought I would see what £250k would buy me there. This is the very first house I found:

http://www.green-acres.com/en/properties/16160a-301146904.htm

How much would be up for in near Leeds or Manchester, let alone the South East? I saw a 3 bed semi in Northampton up for 25k more last week - this has 2 bathrooms, 4 bedrooms, 2 garages and a swimming pool!

And people would have us believe there is something magical about UK property?

tick, tock, tick, tock....

Yeah but does it have London vibrant multi-culture *

* - some foreign person puking there guts up after eating a kebab.

We do have a problen when a 2 bed council flat in a crappy bit of London is more expensive than a nice Alp-ish villa with pool.

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I still believe it!

I'd rather be in density with other housing myself. Close to shops, loads of other neighbours, medical facilities.

Although you say there are good jobs etc there, if it is sustainable, so perhaps it isn't over-valued at £244,000. That's still a hell of a lot of money, from my perspective.

France faces 14 BILLION-EURO black hole after it overestimates tax income in the last year
28 May 2014

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This JUST shows what a F*CKING CRAP country the UK is..... And how DELUDED and STUPID and INSANE the UK has become.......

It also shows how tight the control the supply of land being approved for residential use is & how lax credit is.

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I do agree that it is probably still quite expensive in income multiple terms - BUT... my point is that it doesn't really LOOK expensive compared to the madness here. It would be up for half a million in Milton Keynes, let alone Surrey.

The argument for our ridiculous prices is that it is all to do with the historically low rates - yet there is a nice detached house in a prosperous part of the EU for half what it would cost here - and where the central bank IR is also at a long term historic low of virtually feck all.

Anyway, ******** to the UK, I'm off to learn how to parlez francais!

Edited by disenfranchised

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I just like to remind myself Willie - I was looking at Irish property last week.

I was first offered the BOMAD debt slavery introductory sweetener leg up to the first rung on the ladder in 2005. I have a fiance who comes from a family where mother, uncle, aunt and cousin are all BTL junkies. Its been trying. I need these little rays of sunshine.

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Not sure you can really compare France with the UK. The country is twice the size, and there doesn't seem to be the same shortage of property, at least not outside of the cities. Housing is cheap (very cheap in some regions). For 10k you can get yourself a good plot of land with building permission, or even 50k will buy a nice property in some places.
I lived in Paris for a few years; outside of the tourist traps, it's a beautiful city. I can't speak for Grenoble, but other cities in France (beautiful though they may be) seem a bit dead. It might get to you after a few years.

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When all is said and done, prices are still primarily a function of available credit - very few people buy with their own money!

We are not in some bizarre parallel universe where our GDP is twice that of France etc..?

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There's scarce little but the belief that they won't halve that is actually preventing them halving - and that ain't much! Once they start dropping all the FTBers start waiting it out in rental, all the late entrant BTLers dash for the exits before it is too late (it's already too late - unlucky). Once prices start falling the bubble equity that is allowing second steppers to stretch to stupid prices disappears and that portion of the market starts falling too. Labour get in a make noise about London Prime and that collapses. Down we go to 3.5x main earner and 2x second earner, and without the bubble equity that will be 50% down in short order. Bubbles burst. There's nothing magical about this one. It is just much large, and tediously tenacious - for a bubble.

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Prices could drop by 100% if there was a nuclear explosion in Kensington. But it's not going to happen.

In EA speak = So vibrant it glows, plus heating bills are very low - hence it being a more expensive area.

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Can't see any mountains!

Can't see any mountains!

Because it is not very near Grenoble, that is why it is relatively cheap.

This is what you will get in the outskirts of Grenoble

http://www.seloger.com/annonces/achat/maison/corenc-38/88086797.htm?ci=380126&idtt=2&idtypebien=2&nb_pieces=4&tri=a_px&bd=Li_LienAnn_2

123 m2 and electric heating (remember Grenoble is the coldest city in France during the winter). 450 M.Sq. plot with 3 bedrooms. A couple of parking spaces. Grenoble has some of the highest council taxes in France and some of the worst traffic problems. It is not somewhere you would want to commute to from very far.

Edited by davidg

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There's scarce little but the belief that they won't halve that is actually preventing them halving - and that ain't much! Once they start dropping all the FTBers start waiting it out in rental, all the late entrant BTLers dash for the exits before it is too late (it's already too late - unlucky). Once prices start falling the bubble equity that is allowing second steppers to stretch to stupid prices disappears and that portion of the market starts falling too. Labour get in a make noise about London Prime and that collapses. Down we go to 3.5x main earner and 2x second earner, and without the bubble equity that will be 50% down in short order. Bubbles burst. There's nothing magical about this one. It is just much large, and tediously tenacious - for a bubble.

Either asset prices collapse or current prices soar - or both - until the two are brought back into equilibrium. Anyone who maintains that house prices cannot fall is really arguing for a South American-style hyperinflation.

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Either asset prices collapse or current prices soar - or both - until the two are brought back into equilibrium. Anyone who maintains that house prices cannot fall is really arguing for a South American-style hyperinflation.

And current prices soaring requires soaring UK wage inflation. And with China desperate to export their deflation, good luck with that. And if anyone thinks that the global trade structures can be reformed rapidly, to our advantage and before our housing Ponzi blows up in our stupid faces, good luck with that too. Sure enough ParticleMan's eye on the horizon for protectionism shows that global trade structures are now politically contentious. Even if the mainstream narrative lacks structure, it's taking shape. That's what your UKIP vote is really about. The man in the street has finally caught on to the fact that although labour mobility puts 0.2% on UK GDP compared to what was anticipated in its absence, it puts him on a zero hours contract which pays less than a living wage even when it pays.

There are a bunch of things that democracies cannot support. Sound money and rampant inequality are both on that list. The rampant HPI that followed from losing interest in sound money has brought to bear an unsustainable level of inequality. When people riot and take stuff from the shops, it's because they want the things in the shops.

After Plebgate and and the politically opportunistic moron Theresa May putting the knife into the Police Federation, what happens when the next set of riots roll around? To steal a phrase from a much more insightful person, "

" (We should probably have a thread on the Blyth talk, but be prepared to have to watch it more than once - he talks fast.) I'm no fan of Thatcher, but she wasn't an idiot and when she needed boot boys she made sure they were well rewarded. What the hell May thinks she is up to is beyond me, unless they actually believe that anyone else actually believes that "doing more with less" nonsense. More like "you get what you pay for" - watch this space, I guess... Edited by ex nihilo de novo

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I do agree that it is probably still quite expensive in income multiple terms - BUT... my point is that it doesn't really LOOK expensive compared to the madness here. It would be up for half a million in Milton Keynes, let alone Surrey.

The argument for our ridiculous prices is that it is all to do with the historically low rates - yet there is a nice detached house in a prosperous part of the EU for half what it would cost here - and where the central bank IR is also at a long term historic low of virtually feck all.

Anyway, ******** to the UK, I'm off to learn how to parlez francais!

Be careful with the women........

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Either asset prices collapse or current prices soar - or both - until the two are brought back into equilibrium. Anyone who maintains that house prices cannot fall is really arguing for a South American-style hyperinflation.

Absolutely, unfortunately when you put this argument to them they also deny that this is a possibility either. These would be the same people that would laugh at me for buying gold!

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Absolutely, unfortunately when you put this argument to them they also deny that this is a possibility either. These would be the same people that would laugh at me for buying gold!

Anyone with the intellect and knowledge to merit the time spent discussing this bubble, much less arguing about it, has been sitting it out in shocked disbelief regarding the ignorance and idiocy of the people making the weather since 2003. When the same f*ckwits misread the significance of the "extraordinary monetary policy" of 2008 onwards, they merely dragged out and worsened the inevitable correction. "Ever thus to deadbeats".

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Was just having one of my periodic 'but what if the prices stay this stupid forever?' thoughts and decided to look overseas.

I went to Grenoble a couple of years ago - its a small city surrounded by the Alps. Lots of IT & tech jobs. An excellent half day drive from Monaco & Cannes. Great (cheap) local tram system, TGV, Airport... So I thought I would see what £250k would buy me there. This is the very first house I found:

http://www.green-acres.com/en/properties/16160a-301146904.htm

How much would be up for in near Leeds or Manchester, let alone the South East? I saw a 3 bed semi in Northampton up for 25k more last week - this has 2 bathrooms, 4 bedrooms, 2 garages and a swimming pool!

And people would have us believe there is something magical about UK property?

tick, tock, tick, tock....

Cheap mortgages are available in France, and well paid jobs are to be had in Grenoble. So how can this property be so cheap compared to the UK?

Maybe it's supply and demand. A surfeit of property in this area means buyers feel they have a choice, and can therefore reject options that don't tick all the boxes.

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Because it is not very near Grenoble, that is why it is relatively cheap.

This is what you will get in the outskirts of Grenoble

http://www.seloger.com/annonces/achat/maison/corenc-38/88086797.htm?ci=380126&idtt=2&idtypebien=2&nb_pieces=4&tri=a_px&bd=Li_LienAnn_2

123 m2 and electric heating (remember Grenoble is the coldest city in France during the winter). 450 M.Sq. plot with 3 bedrooms. A couple of parking spaces. Grenoble has some of the highest council taxes in France and some of the worst traffic problems. It is not somewhere you would want to commute to from very far.

By the time you have added on property taxes possibly nearer 300k. Why not barter for something in this country like in North East Lincolnshire where prices are completely bombed out and prices are at 2003 levels. For about 50k more why not be be the Lord of Manor in this country in a genuine historic solid house as opposed to a block built French shanty disaster.

I keep telling everybody that house prices in the North of the East Midlands have completely collapsed, and as Venger points out nobody wants to live in isolated rural Britain anymore, but I wouldn't mind.

http://www.rightmove.co.uk/property-for-sale/property-42268384.html

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For about 50k more why not be be the Lord of Manor in this country in a genuine historic solid house as opposed to a block built French shanty disaster.

French shanty disaster, I love it. :-).

You could get a manor house where the original poster posted a link quite cheap but it would bankrupt you in maintenance. I think the first house is out in the Terres Froides, it is a microclimate area that no-one from Grenoble would go to live in; only people from outside buy there. My wife pointed out that there was still snow on the ground on the 13th May 2014 whereas there was no snow that fell in Grenoble all winter. It also catches the weather systems that come in from the Atlantic as the clouds shed their rain to pass over the pre-alps.

Regarding salaries, most people get the SMIG (French minimum wage) or are unemployed but there are some senior engineer jobs paying in the 45-50K bracket but you would pay a lot of that in tax and social security.... so 300K (or 500K+ in Grenoble as in my link) is an absolute fortune for locals.

Still HPCers, invest there if you will but remember the local dicton:-

"moult sont les anglais qui se sont fait avoir,

en achetant une maison dans les terres froides"

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Yep, think prices have more or less stagnated when you compare like for like transactions, other than London & SE which is it's own market. It's clear that the goal of our rules is to avoid this collapsing, even real stagnation seems improbable.

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