What, If Any, Effect Will China's Woes Have On The London Housing Market?

[royalvictor]

I am hugely bearish in anything newbuild from the likes of Berkeley, Ballymore, Barratts et al. The glut of oversupply is coming on now. I expect that more overseas "investors" (actually, it's just a FX trade, little else) selling out before completion. They might just get stuffed. I struggle to fathon the clientel who would pay £500-650k (wild guess) for a say 2-bedder on the on Blackwall, with 8 lanes motorway in plain sight 10 storeys below and a lovely view on a grim council estate to the North. The New Providence Wharf extension built by Berkeleys.

Here some stats from the 2011 census. Top wards with Chinese population share by ward:

Ward Pop:

--------------------------------------------------------------------
Millwall 2085
Bloomsbury 941 university crowd?
Blackwall and Cubitt Town 1550
Bishop's 756
King's Cross 877 university crowd?
Surrey Docks 953
Rotherhithe 919

Quite some concentration... this combined with commoditized high-rise apartment blocks, Singapore-style, hmm

[TheCountOfNowhere]

We've been saying that for so long tho. In the interim zirp and qe have allowed people who bought in the dips to pay off their mortgages and also maintain their house prices at high levels. Whilst I expected a steady move towards a normal economy and more realistic interest rate levels, against a backdrop of falling house prices, we got the opposite, and many a leverage gamble was handsomely rewarded. Making fools out of hpc.

the dips were unaffordable to most, hence why the sales volumes were practically zero and the government had to do their corrupt insane schemes.

only people I know who've bought was in the last 2 years. sold for loads traded up for even more debt, houses now look 50% overpriced.

[zugzwang]

the dips were unaffordable to most, hence why the sales volumes were practically zero and the government had to do their corrupt insane schemes.

only people I know who've bought was in the last 2 years. sold for loads traded up for even more debt, houses now look 50% overpriced.

+1

In housing volume precedes price. Residential transactions peaked in 2006 at the top of Brown's first bubble. As demand dried up and transactions fell, so prices peaked in late 2007. The price crash began in 2008 as demand continued to fall.

Edited August 27, 2015 by zugzwang

[Venger]

Shades of the dotcom bubble as well - when UK house prices weren't such a certainty but dotcoms were

Presumably they were doing that (homes as collateral) with stocks on the way up (doing it in the past not wanting to miss the apparently certain rapid up moves) but it'll be less likely now when persistently on the way down. Likely it's in the news now because investors are complaining they're having to sell their houses to meet commitments or just complaining to the media that they've lost money but still have to pay the mortgage/loan?

There was an article that a lot of sellers were retail so how likely were they to be buying London property - some successful ones might. Are Chinese companies going bankrupt so that rich owners with their wives and children have to sell London properties.

No doubt London estate agents will be claiming it's good for London but then according to them most everything is whatever happens.

From memory in the 80s boom didn't some Japanese companies pay massive amounts for landmark London offices with their "wall of money" but when the bear market arrived they had to sell up. Could something similar happen with Chinese investment in London housing/property.

Apparently the Chinese are investing in New York and Australia and likely plenty other places as well. Isn't it like any other investment if it doesn't look good or they're stretched they'll sell it and put it elsewhere.- somewhere like New York or Australia or even invest it in a different sector. For instance New York is supposed to be relatively cheap compared to London - London being 2nd only to Monaco.

Will China Repeat Japan's 1980s Foreign Real Estate Bust?

The recent purchase of the Waldorf Astoria by a Chinese company recalls Japanese companies' buying sprees 30 years ago. And that didn't end well.

Radio a few moments ago, saying there's been some sort of announcement/release that US President no longer going to stay at Waldorf-Astoria Hotel when visiting New York. Daily Mail suggests spying concerns.

News ends, and moves onto Australia News. Correspondent says he wants to follow on from the last story to begin with, saying that a protest group is planning to disrupt auctions in Australia, with concerns too much real estate being sold to Chinese.

[pipllman]

this sort of news story will have Chinese investors flocking to London BTL even faster won't it? NOT!

http://www.property118.com/oliver-knights-letting-agency/

extract

n 2010, Mr Tan Chun Keung, purchased a property in Canary Wharf as a steady stream of retirement income, appointing a letting agent to manage his property, which he maintained worked well.

However, when the tenant moved out and the property was advertised as vacant, Mr Tan Chun Keung received a call from Oliver Knights claiming an international bank had offered to rent the apartment for their staff at market price for a period of three years.

Although initially suspicious, with offices in Acton, Canary Wharf and Finsbury Park, Mr Tan Chun Keung decided the opportunity to secure a three year tenancy with a corporate let was an attractive proposition and proceeded. Irregular rent payments were received for the first five months, but in April 2015, this stopped altogether. Oliver Knights did not respond to any form of communication, nor did the tenant.

He comments “It has since transpired that the tenant living in our property was not the person that signed the tenancy agreement. Oliver Knights had signed a new agreement with another tenant without informing us. The tenant claims he has passed rent to Oliver Knights but has no proof of payment.”

According to a new prospective tenant (Miss Jin), who has since contacted Mr Tan Chun Keung directly, Oliver Knights carried out a viewing of the property as recently as 19th August 2015. With an agreed weekly rent of £360, the tenant was advised her and her partner could move in on 27th August. They paid a six-week deposit and one-month rent in advance, a total of £4420, on 20th August 2015, but one week later Miss Jin was told the landlord had decided to pull out of the offer. Oliver Knights then promised the tenants (in verbal and written notice) that they would receive a full refund. The agent has since been uncontactable.