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The Great Property Race, Bbc1 Fri 11 Jul

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On now, about the London property market

What a mess,i thought they had put a tax on overseas buyers purchasing in London in the last budget.

Edited by awaytogo

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Interesting viewing. All those years of us buying tat from China and giving them our money is coming back to haunt us as they use that money to outbid us and buy our assets. Perfectly predictable.

Also predictable is that Chinese property market will pop and London will go down with it.

Edited by mikthe20

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Interesting to hear of their attitude to the asset class, that they tend to think short term and are only concerned with capital appreciation.

When this turns there will be an absolute stampede for the exits, and those recent local purchasers who stretched to get a mortgage at emergency rates to compete with them will be left in negative equity with rising borrowing costs.

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Its already turned.

When the media are showing stuff like this, its already gone.

The London mega bubble mania is over. Then that didn't sell have missed the boat.

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Those Chinese students buying off-plan had a definite whiff of greatest fool about them.

The rush for the exits is going to be hilarious.

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Its already turned.

When the media are showing stuff like this, its already gone.

The London mega bubble mania is over. Then that didn't sell have missed the boat.

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Those Chinese students buying off-plan had a definite whiff of greatest fool about them.

The rush for the exits is going to be hilarious.

I work with young Chinese who told me he couldn't loose on London property. I assured him he would. He looked shocked i didn't believe what he told me and had a dozen reasons why the London bubble would collapse.

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Interesting to hear of their attitude to the asset class, that they tend to think short term and are only concerned with capital appreciation.

When this turns there will be an absolute stampede for the exits, and those recent local purchasers who stretched to get a mortgage at emergency rates to compete with them will be left in negative equity with rising borrowing costs.

Absolutely. Also exactly why the recent mortgage restriction regulations will have a bigger effect than many seem to suspect, IMO.

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I work with young Chinese who told me he couldn't loose on London property. I assured him he would. He looked shocked i didn't believe what he told me and had a dozen reasons why the London bubble would collapse.

China has capital controls that are supposed to prevent large sums of money going abroad. The authorities there might decide a crackdown is in order if the have-nots get a whiff of the wide-scale fraud that is enabling it. Of course, they turn a blind eye because this is a mechanism for exporting inflation.

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It was shocking to see. Londoners must despair.

The boom will add to GDP so politically good in the short-term, bit really short-sighted and a betrayal to people who, live, work and need to exist in this country.

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China has capital controls that are supposed to prevent large sums of money going abroad. The authorities there might decide a crackdown is in order if the have-nots get a whiff of the wide-scale fraud that is enabling it. Of course, they turn a blind eye because this is a mechanism for exporting inflation.

Exactly. Back in 2011 inflation was a real problem for them, export some of the qe derived inflation back to its sources. PBOC started touting btl loans about then. Nothing willl occur within chinese banks without being sanctioned at some level high up and be in china's best long term interests. Now that there is a significant slowdown in china - they were happy to burst their housing bubble, some of the leaking money can be stemmed back and put to better ujses internally.

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Exactly. Back in 2011 inflation was a real problem for them, export some of the qe derived inflation back to its sources. PBOC started touting btl loans about then. Nothing willl occur within chinese banks without being sanctioned at some level high up and be in china's best long term interests. Now that there is a significant slowdown in china - they were happy to burst their housing bubble, some of the leaking money can be stemmed back and put to better ujses internally.

So do you think that China's bubble has already burst?

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Absolutely. Also exactly why the recent mortgage restriction regulations will have a bigger effect than many seem to suspect, IMO.

I suspect the new regulations were brought in just in time to stop people overleveraging in the collapsing London market.

The BOE and the government know there is a London houseing bubble (25% yoy FFS!), it's quite obvious that the new mortgage lending cap is to protect the banks when it all goes tits up.

Why else was it brought in and why now?

It's not for the good of the borrowers because the banks and government don't 'care' they just look after their own interests.

Edited by Wurzel Of Highbridge

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Linky for those who missed it : http://www.bbc.co.uk/iplayer/episode/b03tqzqt/inside-out-london-the-great-property-race

Very interesting - especially the comment that the Chinese investors would dump their investments if they saw even a 5% drop - London is hanging by a thread IMHO.

We mustn't forget the gbpusd exchange rate which has moved from 1.50 to 1.70 over the past year. This has made London property increase a further 14% when expressed in dollars.

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The only positive thing I took from the programme was when a builder guy(?) was saying that there were places which had been derelict for years now being developed and if it wasn't for all the overseas people buying up front off-plan there was no way the building would have been developed eg Batteresea Power station.

So when the bubble bursts and all the Chinese/Malay etc sell there should be a lot of new flats coming on the market at knock down prices for Londoners to buy! Hopefully.......

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China has capital controls that are supposed to prevent large sums of money going abroad. The authorities there might decide a crackdown is in order if the have-nots get a whiff of the wide-scale fraud that is enabling it. Of course, they turn a blind eye because this is a mechanism for exporting inflation.

They must be looking the other way quite a lot.

Henry Nunez, a real estate agent in Arcadia, California, met with so many homebuyers from China that he bought a Mandarin-English translation app for his phone.

The $1.99 purchase paid off last month, when he sold a five-bedroom home with crystal chandeliers, marble floors and two kitchens, one designed for smoky wok cooking. The buyers were a Chinese couple who paid $3.5 million in cash.

“Last year, it would’ve been $2.8 million,” said Nunez, a property broker for 27 years in the city 20 miles (32 kilometers) east of Los Angeles. “The biggest driver is a lot of people wanting to invest their money here.”

Buyers from Greater China, including people from Hong Kong and Taiwan, spent $22 billion on U.S. homes in the year through March, up 72 percent from the same period in 2013 and more than any other nationality, the National Association of Realtors said yesterday in its annual report on foreign home purchases. That’s 24 cents of every dollar spent by international homebuyers, according to the survey of 3,547 real estate agents.

http://www.bloomberg.com/news/2014-07-08/chinese-cash-bearing-buyers-drive-u-s-foreign-sales-jump.html

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In Hong Kong the buyers supposedly buy lottery tickets to be first in the queue!

On a Saturday morning in mid-June, thousands wait, crammed into Hong Kong’s Fortune Metropolis mall, across Victoria Harbor from the main business district, their eyes locked on large elevated screens. Cheers erupt when numbers flash, indicating the lucky ticket holders in the crowd.

They have paid HK$150,000 ($19,354) to enter a lottery that prioritizes buyers of apartments at City Point, a seven-tower development that billionaire Li Ka-shing’sCheung Kong Holdings Ltd. (1) is building. More than 5,000 homebuyer-hopefuls are vying for 442 units, or about 11 for every home that went on sale the weekend of June 14.

Housing sales in Hong Kong are rising after government efforts to cool soaring prices led transactions to plunge last year to the lowest since at least 2002. A drop in mortgage rates and discounts from builders are luring back buyers of new homes after their price fell as much as 20 percent since October.

http://www.bloomberg.com/news/2014-07-08/hong-kong-buyers-queue-for-new-homes-after-prices-plunge.html

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The only positive thing I took from the programme was when a builder guy(?) was saying that there were places which had been derelict for years now being developed and if it wasn't for all the overseas people buying up front off-plan there was no way the building would have been developed eg Batteresea Power station.

So when the bubble bursts and all the Chinese/Malay etc sell there should be a lot of new flats coming on the market at knock down prices for Londoners to buy! Hopefully.......

Yes, but 'knock down' from 800K+ still isn't going to be affordable to many Londoners...

The HK EA saying that in HK almost 1/3 of the appartments were unlit at night because they were bought but empty was also a bit of an eye opener - Iknew it happend here in Padstow etc, but it hadn't occured to me that it would be possible in somewhere as expensive as London or HK.

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It was shocking to see. Londoners must despair.

The boom will add to GDP so politically good in the short-term, bit really short-sighted and a betrayal to people who, live, work and need to exist in this country.

Yep....the three bed semi, three times average income 10% deposit has turned into the £1,000,000 lottery win in a matter of twenty odd years........ :wacko:

Remember it takes a bit of time for the tanker to turn.....still a small gap in the closing window. ;)

Edited by winkie

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