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South Coast Apartments - Price Decline Over 10 Years

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Juvenal posted this on the regional board - from houseprices.io (never heard of it before).

It's historical prices of apartments in a swan ky development in Poole, with quite a few sold this year. Some big losses, with exceptions - seems even 2004 prices aren't achievable.

Maybe there's a problem with the development. Otherwise the only thing I can think of is job losses in the town since 2008. But this is wealthy retirement territory, and Sandbanks is only down the road.

The link should get you there - paste bh15 1hh if you need the search box.

https://houseprices.io/?q=bh15+1hh

For a laugh try bh13 for Sandbanks.

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More-or-less flat since 2004 seems plausible.

Couple of other things might be at play. If they were newbuild then the prices recorded then might not be real: builders offered a bunch of incentives like off-balance-sheet cashback. If some of them went BTL that could put a whole block into a downward spiral. And - not least - the relative price of flats in (and before) 2004 was absurdly high compared to houses, but has adjusted rather more since then.

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Dolphin Quays is dreadful, to be honest with you.

Haven't been there for years, but it seemed good.

Juvenal replied on the other thread that they were way overpriced originally, the street level retail stuff didn't work out, and similar local developments have done OK on price gains.

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More-or-less flat since 2004 seems plausible.

Couple of other things might be at play. If they were newbuild then the prices recorded then might not be real: builders offered a bunch of incentives like off-balance-sheet cashback. If some of them went BTL that could put a whole block into a downward spiral. And - not least - the relative price of flats in (and before) 2004 was absurdly high compared to houses, but has adjusted rather more since then.

Thanks, all good points.

But apartment prices lower than 2004? Back in 2011/12, sure. Out of 109 units 6 shifted this year, all but one at a nominal loss.

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Cheers.

The original link calculates real changes as well as nominal.

Ah ok. This browser was blocking the script for that, but now I've enabled it, I see the website in full.

Wasn't getting the rollover information first time I looked. Thanks.

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Someone on here IIRC

So when the subject's not ebola or Putin or immigration, HPC people can do useful stuff.

Any idea how real price changes are calculated? It's not covered in their FAQ (although interesting info on the IO domain).

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Someone on here IIRC

http://www.housepricecrash.co.uk/forum/index.php?/topic/194336-i-made-a-house-prices-web-site/

I wrote a program to process the LR stats and calculate RPI-adjusted prices, and I used to post some of the results here.

evictee did a much better job than I could ever have done. Really great work, and I very much hope the site keeps going.

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So when the subject's not ebola or Putin or immigration, HPC people can do useful stuff.

Any idea how real price changes are calculated? It's not covered in their FAQ (although interesting info on the IO domain).

It's a straight RPI adjustment.

Taking the second property on the list from houseprices.io home page:

88 Valley Park Drive, PO8 0PS

30 Sep 2014 £240,000

17 Aug 2007 £228,000

RPI Sep 2014: 257.6

RPI Aug 2007: 207.3

Inflate Aug 2007 sale price to Sep 2014: (228,000 / 207.3) * 257.6 = £283,323

Therefore real change = ((240,000 - 283,323 ) * 100) / 283,323 = -15.3%

Edit: typo

Edited by FreeTrader

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It's a straight RPI adjustment.

Taking the second property on the list from houseprices.io home page:

88 Valley Park Drive, PO8 0PS

30 Sep 2014 £240,000

17 Aug 2007 £228,000

RPI Sep 2014: 257.6

RPI Aug 2007: 207.3

Inflate Aug 2007 sale price to Sep 2014: (228,000 / 207.3) * 257.6 = £283,323

Therefore real change = ((240,000 - 283,323 ) * 100) / 283,323 = -15.3%

Edit: typo

Interesting, thanks. Something I didn't know about this forum.

I wonder what's the point of the RPI scale - seems confusing as HPI/rent isn't a factor, although it hits net and disposable income.

Aside from that the nominal losses are severe. It may be a unique case, but I've been there and can't see how these places are getting slaughtered. Porca's suggestion of builder incentives is a good explanation, but then there wouldn't be an accelerating liquidation - unless decreased job security of local investors is forcing it.

Be happy to own 88 Valley Park Drive for my next appearance on Come Dine With Me - but minus 80 thou:

http://www.zoopla.co.uk/property-history/88-valley-park-drive/horndean/waterlooville/po8-0ps/31712250

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I'm amazed there's been c 25% RPI since 2007.

I'm amazed it is that low, 7 years of 4-5% inflation compounded.

I'm not sure RPI is necessarily the best measure for this, but then what is? Wage inflation? Savings Interest Rates? Exchange Rates?

Edited by davidg

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"Maybe there's a problem with the development."

There was, i spent a year working on the grotty old 60's high rises in 2007-8 behind this development, (rodney, drake court forgot what the third one was called) but for almost six months they had the road dug out to some rediculous depth, made access to my job a pain in the ****, got told by one of the engineers on our job it looked like they were shoring up the foundations on this new development due to subsidence.

The development then wasn't more than a couple of years old, IIRC the ground floor retail was empty for years, the general build quality externally is dreadful, used a lot of tin and white block on the outside, kinda resembles early '80's sports centre IMO a sea of beige and grey IIRC, can well believe the prices have fallen as you back on to a mass of social housing which from my experience working there had a lot of 'characters' around.

One other thought, now Sunseekers (major local boatbuilder and employer in Poole) is majority owned by the chinese it wont be long before they're off back to the far east with all the IP to be produced at a fraction of the cost of British labour, already laid off 300 a month ago it'll turn Poole into a ghost town, then who would want to pay many hundreds of thousands to live there.

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<snip> One other thought, now Sunseekers (major local boatbuilder and employer in Poole) is majority owned by the chinese it wont be long before they're off back to the far east with all the IP to be produced at a fraction of the cost of British labour, already laid off 300 a month ago it'll turn Poole into a ghost town, then who would want to pay many hundreds of thousands to live there. <snip>

Sunseeker's "group executive director" says the jobs that will be going are in management and administration.

It's quite possible that the people actually making the boats will stay employed (for the time being at least).

How many houses said boatbuilders will be buying is an interesting question. I did some digging last year and the pay was meh. Lowest rate £9.33 per hour, highest rate £13.50 PAYE or £14.00 self employed per hour, with most of the jobs around £10 per hour. So mostly £20,800 pa gross for 40 hours a week (and you'd have to work 52 weeks a year in the contract / self employed jobs to get that), and £28,080 pa gross for the highest paying PAYE job.

Edit: spelling

Edited by Snugglybear

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