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wsn03

Flats From 35K ?!?

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I'm a Manxie, well sort of, was raised there and carry a Manx Passport so its always been home. Always like to keep an eye on property prices there for that inevitable day that I decide to return.

The Island has been millionaires row for a few years, pyramid nonsense in the extreme with the usual stupid wishful explanations. Fast forward to this decade, the UK government has realised the Manx government has been taking the Michael out of it with the VAT agreement and pulled the rug well and truly from under its feet...meaning in short the Island appears to be in the creek without a paddle.

My Mother told me her friend is returning with a budget of 100k, looking for a flat. No chance I told her, but she said she was viewing a couple of new builds asking for less than 100k! I've just done a search on Zoopla - I'm staggered, one flat from 35k!!

Link is here

I always said if the economy tanked (which it has) property would follow, but I've always been shot down in flames (we have a generation who don't understand the basics of economics). The fact is the Island is like Dubai, little to offer except a lot of expensive property - take away its anchor (a surplus of government income in the same way Dubai had a surplus of speculative cash investing in an oil rich region assuming oil would never go down in price) and you're just left with a rock in the Irish Sea with a lot of mouths to feed, with a massive proportion about to start living off their final salary government employee pensions (a gravy train if ever there was one).

Accident waiting to happen.

Anyone else have any insights as to the downward spiral in property? Presumably the 'come overs' are exiting in droves (that is what usually starts price falls) - If it keeps falling I might actually buy a small flat there for us all to use (we all visit the place a lot), looks like there may be plenty of empty ones to choose from?!. Any insight appreciated.

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I'm a Manxie, well sort of, was raised there and carry a Manx Passport so its always been home. Always like to keep an eye on property prices there for that inevitable day that I decide to return.

The Island has been millionaires row for a few years, pyramid nonsense in the extreme with the usual stupid wishful explanations. Fast forward to this decade, the UK government has realised the Manx government has been taking the Michael out of it with the VAT agreement and pulled the rug well and truly from under its feet...meaning in short the Island appears to be in the creek without a paddle.

My Mother told me her friend is returning with a budget of 100k, looking for a flat. No chance I told her, but she said she was viewing a couple of new builds asking for less than 100k! I've just done a search on Zoopla - I'm staggered, one flat from 35k!!

Link is here

I always said if the economy tanked (which it has) property would follow, but I've always been shot down in flames (we have a generation who don't understand the basics of economics). The fact is the Island is like Dubai, little to offer except a lot of expensive property - take away its anchor (a surplus of government income in the same way Dubai had a surplus of speculative cash investing in an oil rich region assuming oil would never go down in price) and you're just left with a rock in the Irish Sea with a lot of mouths to feed, with a massive proportion about to start living off their final salary government employee pensions (a gravy train if ever there was one).

Accident waiting to happen.

Anyone else have any insights as to the downward spiral in property? Presumably the 'come overs' are exiting in droves (that is what usually starts price falls) - If it keeps falling I might actually buy a small flat there for us all to use (we all visit the place a lot), looks like there may be plenty of empty ones to choose from?!. Any insight appreciated.

I live on the Island and take a similar view to you although I disagree about the economy tanking - I am actually surprised about how things have held up thus far, but I suspect that when the government finance issues come to head things will turn south for real. People have been moaning about "austerity" here but I don't think they have seen the half of it yet. The Island is still drawing down on £x millions of reserves each year to meet revenue expenditure and whilst somewhat superficial cuts have been made, they are not even close to balancing the budget. Add in to the mix the issues with pension liabilities etc and it is not a pretty picture. I would say, within 5 years the people of the Island are going to have to deal with either huge spending cuts or significant tax increases. Like any politicians, whoever is in office will try and defer the day of reckoning for as long as possible instead of tackling the issues at hand - that's why I think the Island will muddle on OK for a few years, until there is no money left.

Also on the economy, the finance sector has been holding up ok and egaming continues to flourish, but i worry about the sustainability of the finance sector given FATCA, CRS and all of the anti-tax avoidance hullabaloo, in addition to whether the IOM may be forced to change its taxation strategy owing to budget constraints.

I do not own property on the Island owing to my concerns; however I do look at property prices a heck of a lot and whilst house prices have fallen over the last 5 years, they haven't fallen by as much as I would have expected. Prices seem stable (particularly at the mid-range level, say £250k - £500k") for the moment but I think there is more pain to come in that respect, when the spending cuts or tax increases begin to bite per the above.

Oh, and there have been loads of flats for sale in Ramsey (in particular, but also elsewhere) for £50k-£100k for ages - the market for Flats on the IOM is not great, they have certainly suffered bigger falls then housing.

As for "come overs " leaving; again I don't think this is the case. Until the job situation worsens on the IOM I can't see that happening - in comparison to the UK (and probably most of Europe), we still have it pretty good. Again though, I think this will be short lived.

PS: Empire of Debt - one of my favourite books of all time.

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Hi Sonswan

Just read your post - wow, you are well informed and clearly have a far better insight / understanding than I do.

Firstly thanks for your reply, very interesting indeed. I was told by a local who seems to mix with various people "in the know" that the government will be fine "until they've used up all the reserves" which pretty much matches with what you are saying.

In summary what you seem to be saying is things are holding up quite well considering, but not sustainable in the long run - that is very important for me looking at having a base there - I have no interest in making money out of houses, but I don't want to lose any either if I can help it. Also interesting is your comments on flats, so this isn't new then? Seems the builders built too many flats just like here in England.

Looks like this is a slowly ticking time bomb, I will certainly look out for news on this forum and post anything I find. It has always aroused my curiosity how the Island's housing market continues to defy gravity, and when I look at things like the "Ballomona" estate I'm speechless - 30 million for something that hasn't been built! Why would anyone want something that lavish in a place that windy and cold (though I realise it hasn't been bought yet after a couple of years on the market).

I was around in the 70s, I remember the glut of unsold houses on the market. I saw the rapid decline of tourism, and the government do nothing to slow it down or stop it. I watched the Island pitch itself as the coming "Hong Kong", only to give the Heathrow slots away to the 'free market'...yet they still boast 'London in an hour'. Docklands and Gatwick aren't Heathrow! Now with all the disclosure forced on the Island the whole off-shore finance must have taken a serious hit? As for gaming...isn't that a very fickle industry that moves quickly to suit tax / profit etc? I don't know much about it but I wonder how sustainable it must be.

I wish the Island had a more balanced economy, but their 'open and supportive' attitude towards business is myth. I tried to set up on the Island and was taken for little more than an idiot (by a department full of idiots). Being stranded on a rock in the middle of the Irish Sea I was going to need some incentive to make it work..I didn't get the offer of anything, so set up on the mainland with no problems what-so-ever.

I never got why they removed corporation tax completely - I've heard the governments answers, but the maths for me still don't stack up. Relying on NI alone and income tax isn't going to do it in my book - if they're spending more than they're earning then perhaps I'm right. I'm no fan of taxes, but when you stop taking enough you can't pay for services.

Good to see a fellow Empire of Debt fan - Bill Bonner is a hero. If I was a woman I'd probably marry him and make his babies.

Edited by wsn03

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Hi Sonswan

Just read your post - wow, you are well informed and clearly have a far better insight / understanding than I do.

Firstly thanks for your reply, very interesting indeed. I was told by a local who seems to mix with various people "in the know" that the government will be fine "until they've used up all the reserves" which pretty much matches with what you are saying.

In summary what you seem to be saying is things are holding up quite well considering, but not sustainable in the long run - that is very important for me looking at having a base there - I have no interest in making money out of houses, but I don't want to lose any either if I can help it. Also interesting is your comments on flats, so this isn't new then? Seems the builders built too many flats just like here in England.

Looks like this is a slowly ticking time bomb, I will certainly look out for news on this forum and post anything I find. It has always aroused my curiosity how the Island's housing market continues to defy gravity, and when I look at things like the "Ballomona" estate I'm speechless - 30 million for something that hasn't been built! Why would anyone want something that lavish in a place that windy and cold (though I realise it hasn't been bought yet after a couple of years on the market).

I was around in the 70s, I remember the glut of unsold houses on the market. I saw the rapid decline of tourism, and the government do nothing to slow it down or stop it. I watched the Island pitch itself as the coming "Hong Kong", only to give the Heathrow slots away to the 'free market'...yet they still boast 'London in an hour'. Docklands and Gatwick aren't Heathrow! Now with all the disclosure forced on the Island the whole off-shore finance must have taken a serious hit? As for gaming...isn't that a very fickle industry that moves quickly to suit tax / profit etc? I don't know much about it but I wonder how sustainable it must be.

I wish the Island had a more balanced economy, but their 'open and supportive' attitude towards business is myth. I tried to set up on the Island and was taken for little more than an idiot (by a department full of idiots). Being stranded on a rock in the middle of the Irish Sea I was going to need some incentive to make it work..I didn't get the offer of anything, so set up on the mainland with no problems what-so-ever.

I never got why they removed corporation tax completely - I've heard the governments answers, but the maths for me still don't stack up. Relying on NI alone and income tax isn't going to do it in my book - if they're spending more than they're earning then perhaps I'm right. I'm no fan of taxes, but when you stop taking enough you can't pay for services.

Good to see a fellow Empire of Debt fan - Bill Bonner is a hero. If I was a woman I'd probably marry him and make his babies.

Hi Wsn,

Yes, seems ok for now but I really do believe there will be a seismic shift in sentiment over the next 5 years or so. The issue with Flats isn’t entirely new here, they have been building lots of them for a long time, and from what I gather people are struggling to shift them.

Re the market defying gravity, as I mentioned low – mid range has fallen but not huge amounts. The government has varying schemes to assist first time (and in some rare cases, second time) buyers, and also interest relief on loan interest (although this is capped). It will be interesting to see if policy on any of the housing support schemes changes as budgetary concerns peak – if they are reduced or capped further the impact on house prices, I feel, could be significant, particularly as they would be made alongside the inevitable tax increases/other spending cuts (which on their own will also negatively impact prices).

I don’t know enough about the egaming industry to comment to be honest, but the firms here have a very significant presence, have obviously invested a lot in the Island so it might be more sustainable than one may initially think.

Re finance sector, I work in that industry – I don’t think information exchange/tax disclosure has had a real impact yet, if anything there are just more jobs going in compliance. There were similar concerns raised when the EU Savings Tax Directive was implemented etc, I don’t think the impact was quite as bad as people expected when that was implemented; perhaps it will be the same for the new initiatives also. I guess only time will tell.

There is a lot of discontent on the IOM particularly with Government – if you are on facebook check out “IOM NEWS AND POLITICS” group, or just look at comments section on relevant stories on iomtoday.co.im. The worrying thing for me is that public sentiment seems to be very much in favour of abandoning low tax environment to maintain current levels of expenditure. Well I think you and I know where that is likely to end up…. The road to hell is paved with good intentions!

I think the next 5 or so years are going to be VERY interesting on the IOM, particularly at budget crunch time. The IOM has had a free ride (and in effect a phony boom) for a long time – it can’t go on exponentially.

Yep Bill Bonner – what a legend.

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Hi Wsn,

Yes, seems ok for now but I really do believe there will be a seismic shift in sentiment over the next 5 years or so. The issue with Flats isn’t entirely new here, they have been building lots of them for a long time, and from what I gather people are struggling to shift them.

Re the market defying gravity, as I mentioned low – mid range has fallen but not huge amounts. The government has varying schemes to assist first time (and in some rare cases, second time) buyers, and also interest relief on loan interest (although this is capped). It will be interesting to see if policy on any of the housing support schemes changes as budgetary concerns peak – if they are reduced or capped further the impact on house prices, I feel, could be significant, particularly as they would be made alongside the inevitable tax increases/other spending cuts (which on their own will also negatively impact prices).

I don’t know enough about the egaming industry to comment to be honest, but the firms here have a very significant presence, have obviously invested a lot in the Island so it might be more sustainable than one may initially think.

Re finance sector, I work in that industry – I don’t think information exchange/tax disclosure has had a real impact yet, if anything there are just more jobs going in compliance. There were similar concerns raised when the EU Savings Tax Directive was implemented etc, I don’t think the impact was quite as bad as people expected when that was implemented; perhaps it will be the same for the new initiatives also. I guess only time will tell.

There is a lot of discontent on the IOM particularly with Government – if you are on facebook check out “IOM NEWS AND POLITICS” group, or just look at comments section on relevant stories on iomtoday.co.im. The worrying thing for me is that public sentiment seems to be very much in favour of abandoning low tax environment to maintain current levels of expenditure. Well I think you and I know where that is likely to end up…. The road to hell is paved with good intentions!

I think the next 5 or so years are going to be VERY interesting on the IOM, particularly at budget crunch time. The IOM has had a free ride (and in effect a phony boom) for a long time – it can’t go on exponentially.

Yep Bill Bonner – what a legend.

Hi Sonswon,

Again thanks for your informed replies, all comments noted with interest. It will definitely be a case of watch this space.

Interestingly I've just been asked if I'd be up for returning to the UAE...early days but I'm thinking about it seriously. If I go the next stop after that stint will be a tax haven, most likely the Isle of Man (because I have completely forgotten how crap living in endless wind is).

I shall be watching developments on the Island closely. My money thinks this will not have a happy ending...all the luck might have run out this time I'm thinking, but It remains to be seen.

Thank you for the Facebook suggestion, I will follow that one. As for the iomtoday I have followed the comments closely, there is a very definite angry undertone, though I was wondering if they were just the posters with a lot of time on their hands and an axe to grind - perhaps not. When people start complaining about the cost of known institutions like the railways (big fan here) then you know money is tight and the people are getting angry.

You are dead right, the Isle of Man has had a free ride, a phony boom, you're one of the few people I've heard say it.

Talk soon I'm sure. Cheers

Edited by wsn03

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Just read this in the comments page of IOM Today following the Budget announcement - reads like a 7 yr ticking bomb to me?

At 1 April 2015 the government had a total of £2.7b in reserves, including £200m in the Public Sector Pension reserve. On top of that reserve account the government only had another £450m of 'cash-able' reserves that could realistically be used to plug the holes in public finances. The rest of the reserves are either 'sunk' costs that can't be recovered, such as whopping £544m in loans to various government departments and the huge £531m loan to the MUA, or things that shouldn't be (but might legally be) touched, e.g. the National Insurance Fund (£682m), which is designated to pay for current and future NI pensions (See pages 12 and 13 of the 2014/15 Detailed Accountshttps://www.gov.im/media/1348871/2015-gd-0028.pdf).

According to an article published on IOM Today last year, the government was planning to withdraw circa £90m from reserves. If the government runs an annual deficit of £90m every year, and nothing is done, then the 'cash-able' reserves are destined to run out in 7.2 years ((£200 + £450) / £90). If the government tries to borrow money by issuing bonds to local people, then it could risk jeopardising its AAA rating; it will buy the government a bit more time (approximately one extra year for every £100m), but this will not solve the fundamental problem - the government is living beyond its means. The only way forward is to have a substantial long term strategy that tackles ongoing annual deficits in overall government's finances. Does the government have an adequate plan to deal with the issues? I am concerned that they don't.

Read more: http://www.iomtoday.co.im/news/isle-of-man-news/budget-to-secure-strong-foundations-for-future-1-7733278#ixzz40tcf4Axh

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On 18/02/2016 at 4:29 PM, wsn03 said:

Hi Sonswon,

Again thanks for your informed replies, all comments noted with interest. It will definitely be a case of watch this space.

 

I shall be watching developments on the Island closely. My money thinks this will not have a happy ending...all the luck might have run out this time I'm thinking, but It remains to be seen.

 

You are dead right, the Isle of Man has had a free ride, a phony boom, you're one of the few people I've heard say it.

 

I have a strong family connection with the IoM and go there four or more time a year.Love the place.

However,I've noticed over the years

1) it has a massive demographic problem

2) a hugely overpriced property market compared to local salaries.

3) a shrinking finance sector.

One EA said to me that he had two sorts of vendors.Those that had been on the market for years and wouldn't cut the price and those who were more realistic.

We have a family friend who's asking price has been cut from £1.5mn to circa £800k over the last few years.I believe they've now sold it.

In terms of business,when I needed a broker there in 2003 there was loads to choose from.Now there's a handful.

Egaming is going big.

However,there are a lot of old people on the island and lots of 'come overs' who've arrived to dodge UK inheritance tax.

On 15/02/2016 at 8:49 PM, sonswan said:

I don’t know enough about the egaming industry to comment to be honest, but the firms here have a very significant presence, have obviously invested a lot in the Island so it might be more sustainable than one may initially think.

Re finance sector, I work in that industry – I don’t think information exchange/tax disclosure has had a real impact yet, if anything there are just more jobs going in compliance. There were similar concerns raised when the EU Savings Tax Directive was implemented etc, I don’t think the impact was quite as bad as people expected when that was implemented; perhaps it will be the same for the new initiatives also. I guess only time will tell.

 

I think the next 5 or so years are going to be VERY interesting on the IOM, particularly at budget crunch time. The IOM has had a free ride (and in effect a phony boom) for a long time – it can’t go on exponentially.

 

As above.the economy is small but tax wise it is very attractive to well off businesses and individuals.If they can keep them coming then they'll be ok,but there's no way the house prices can be sustained without a major new wave of come overs.

Check out some of the asking prices in Peel

£600k(£400k too much imo)

http://www.chrystals.co.im/properties-for-sale/property/6643146-lhoan-pibbin-vane-reayrt-ny-chronk-peel

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5 minutes ago, Sancho Panza said:

I have a strong family connection with the IoM and go there four or more time a year.Love the place.

However,I've noticed over the years

1) it has a massive demographic problem

2) a hugely overpriced property market compared to local salaries.

3) a shrinking finance sector.

One EA said to me that he had two sorts of vendors.Those that had been on the market for years and wouldn't cut the price and those who were more realistic.

We have a family friend who's asking price has been cut from £1.5mn to circa £800k over the last few years.I believe they've now sold it.

In terms of business,when I needed a broker there in 2003 there was loads to choose from.Now there's a handful.

Egaming is going big.

However,there are a lot of old people on the island and lots of 'come overs' who've arrived to dodge UK inheritance tax.

As above.the economy is small but tax wise it is very attractive to well off businesses and individuals.If they can keep them coming then they'll be ok,but there's no way the house prices can be sustained without a major new wave of come overs.

Check out some of the asking prices in Peel

£600k(£400k too much imo)

http://www.chrystals.co.im/properties-for-sale/property/6643146-lhoan-pibbin-vane-reayrt-ny-chronk-peel

Very interesting post. When you say e-gaming is "going big" do you mean its flourishing, or leaving? I worry businesses like that are pretty much vapour wear, they can pack up and move on very quickly and easily given the right incentives.

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57 minutes ago, wsn03 said:

Very interesting post. When you say e-gaming is "going big" do you mean its flourishing, or leaving? I worry businesses like that are pretty much vapour wear, they can pack up and move on very quickly and easily given the right incentives.

http://www.casinoguardian.co.uk/2017/06/02/pokerstars-announces-second-isle-man-office-opening/

' The largest and most successful online poker brand – PokerStars – revealed that it has opened a new office in the Isle of Man. The brand, owned by Amaya Inc., had its second local office established in Quay West building in Douglas as part of its expansion strategy into iGaming and sports betting market.

Back in 2005, there were only five employees working for the brand in the Isle of Man, while 12 years later their number has exceeded 390. .'

 

Like any business,they can dissappear,but their footprint has been steadily building.

 

 

 

Edited by Sancho Panza

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On ‎28‎/‎06‎/‎2017 at 0:44 PM, Sancho Panza said:

http://www.casinoguardian.co.uk/2017/06/02/pokerstars-announces-second-isle-man-office-opening/

' The largest and most successful online poker brand – PokerStars – revealed that it has opened a new office in the Isle of Man. The brand, owned by Amaya Inc., had its second local office established in Quay West building in Douglas as part of its expansion strategy into iGaming and sports betting market.

Back in 2005, there were only five employees working for the brand in the Isle of Man, while 12 years later their number has exceeded 390. .'

 

Like any business,they can dissappear,but their footprint has been steadily building.

 

 

 

I've just come back from the Island - went over to watch the Manx Grand Prix Senior (before they close it down with all the cutbacks!). My brother-in law is looking for a job in the gambling industry, having been a Director for a related company in another location (off Island).

He said there might seem like there's a lot going on (on the Island), but operationally its "small beer". He seems to be struggling to get anyone to come near his previous salary. I don't know enough about the industry to comment (or anything come to think of it!), but thought it was an interesting anecdotal.

Edited by wsn03
typo

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