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wsn03

Proper hpc?

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Anyone care to comment on the spiral of decline on the Island.  Ive been closer to it than im going to discuss. See Zoopla, up to 50% reductions on higher end property. Declining population. 

Anyone want to comment?

 

 

Edited by wsn03

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Personally, I don't think the population decline is the driver, and I don't think this is a huge problem (yet) - first decline in a while and might be a blip. Be interesting to see if it is the beginning of a trend.

But, as for house prices; it certainly seems the pace of the decline has increased massively the last 12 months.  Particularly in the say 300k-600k range. Perhaps a combination of simple issues with affordability, and concern over ongoing and increasing fiscal squeeze? What do you reckon?  

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On Saturday, March 18, 2017 at 3:01 PM, sonswan said:

Personally, I don't think the population decline is the driver, and I don't think this is a huge problem (yet) - first decline in a while and might be a blip. Be interesting to see if it is the beginning of a trend.

But, as for house prices; it certainly seems the pace of the decline has increased massively the last 12 months.  Particularly in the say 300k-600k range. Perhaps a combination of simple issues with affordability, and concern over ongoing and increasing fiscal squeeze? What do you reckon?  

I have much to say on this, so I'll do so when im on a laptop tomorrow 

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On ‎18‎/‎03‎/‎2017 at 3:01 PM, sonswan said:

Personally, I don't think the population decline is the driver, and I don't think this is a huge problem (yet) - first decline in a while and might be a blip. Be interesting to see if it is the beginning of a trend.

But, as for house prices; it certainly seems the pace of the decline has increased massively the last 12 months.  Particularly in the say 300k-600k range. Perhaps a combination of simple issues with affordability, and concern over ongoing and increasing fiscal squeeze? What do you reckon?  

I think the issue starts with the books - the government now has a gap in its spending, less coming in than going out. As a result budgets are being squeezed. The biggest employer is the government, fewer careers are available in government as a result of the funding issues - and of course all those civil servant pensions have to be paid for.

The decline in population shows the young are leaving the Island. The well educated young are making careers elsewhere. I don't see the private sector picking up the slack.

So we have the management level professionals in decline, I presume many have left to take up posts elsewhere. That's why the 300k - 600k range isn't being fed. Then you'll have a lack of buyers in the starter home range, hence I'm seeing apartments below 50k sitting on the market for well over a year, where are the first time buyers? The professionals are not coming through in the same numbers, and the prices are too high for the average worker.

So yes the fiscal squeeze is behind it. I expect speculation is playing its part too - how does the Island get out of its current fix - this isn't a temporary problem, something is going to have to happen to change the state of decline it seems to now be in.

If I look at my own situation it speaks volumes. I go home regularly, my wife and I want a small apartment of our own so we can come and go as we please. Now that they're affordable to us we're scared to buy - don't want to spend 60k on an apartment that might be worth only 40k in 5 years time - that's a lot of money to lose. Could it happen? Well looking at the economic prospects of the place why not? I'm worried. How does that conversation go around in the head of someone with a few hundred thousand pounds at stake?

 

 

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On 18/03/2017 at 2:47 PM, wsn03 said:

Anyone care to comment on the spiral of decline on the Island.  Ive been closer to it than im going to discuss. See Zoopla, up to 50% reductions on higher end property. Declining population. 

Anyone want to comment?

I suspect theres worse to come, an example Nationwide laying more than 70 people off, some may relocate to Britain selling their houses, but its not just those 70 odd people, its other suppliers that depend on Nationwide to make a living, from paper supplies to computer engineers to upkeep of building to food suppliers to the clearing bank that Nationwide uses to flights where staff are sent to Britain so in turn these companies will lay people off, with interest rates so low even the financial sector on the island is struggling and it will all feed through to house prices as the wages will no longer sustain the high prices.

 

 

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Recently moved to the Island (November).

 

Have been renting so far but, in light of it being a buyer's market for the above reasons, we have been looking at properties as we want to settle here for the long term. 

We went to see a place advertised at 675k that has been on the market for 5 years - were preparing an offer for 550 but the guy selling wouldnt entertain offers below 665. 

We have concluded that the population of the island are completely mad.

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18 hours ago, ThePrufeshanul said:

Recently moved to the Island (November).

 

Have been renting so far but, in light of it being a buyer's market for the above reasons, we have been looking at properties as we want to settle here for the long term. 

We went to see a place advertised at 675k that has been on the market for 5 years - were preparing an offer for 550 but the guy selling wouldnt entertain offers below 665. 

We have concluded that the population of the island are completely mad.

Your conclusions are fairly accurate. Since the late 80s everyone has genuinely believed that wealth grows on trees, and that the only way is up. The Island escaped recessions, locked in its own finance sector bubble. When finance started petering off the Island seemed to survive perfectly on the back of the reciprocal VAT agreement.

The VAT agreement has changed. The Island has lost a lot of its income. The government is having to dip into reserves to balance the books, but the pensions bill (for the government, the biggest employer) keeps growing. So far no get out of jail card has been found and the reserves have a finite life (estimates vary).

But everyone thinks that their houses, which have been growing handsomely in value since the mid 90s, are going to keep on rising, because that is what they always did. It costs little to hang on for the right buyer while interests rates are so low, but eventually something will have to give I expect for even the most comfortable vendor. I don't see anything but long term decline in house prices, but that is just my opinion.

The media didn't help, allowing Estate Agents to give a running commentary on the state of the housing market is always a bad idea, and the 'experts' have always touted the housing market as a sure fire winner, as they do. Even now they use stupid words like a "stabilising" of the market, "cooling" etc. Of course, they spend a lot of money on advertising, why wouldn't they be given plenty of airtime.

As a guy I did some business with once said to me - "you can't go wrong with bricks and mortar" whilst sitting on his million pound portfolio in the USA...he subsequently lost the lot in repossessions, no more retirement, working into his 70s.

Edited by wsn03

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On ‎20‎/‎04‎/‎2017 at 5:54 AM, cheekychap said:

 

Sorry cheeky chap, I didn't realise your post was a reply to my quote, because it is showing as my quote.

Thanks for the heads up on Nationwide.

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20 hours ago, ThePrufeshanul said:

How do you think the island will be affected by Brexit?

I think the Finance sector will be the main party affected, I gather the Island is a bit of a staging post for financial trades etc, and some of those must end up in Europe. Anything that puts up borders for the UK will have the same effect on the Island I expect. London is expected to lose some trade in financial services, I presume the Island relies far more on the Finance sector than the UK does for its economic well being, so has far more to lose..

I expect the general uncertainty is the biggest problem, Brexit could take years. The UK, depending on who you speak to, has sectors that arguably stand to gain as well as those that stand to lose. I can't see which sector on the Island stands to gain aside maybe from tourism (small sector these days). I also expect certain areas will come out largely unscathed, e.g. the motor industry because the EU has as much or more to lose than the UK, but I can't see those compromises being in items that benefit the Island particularly.

Being a passenger in the whole process gives the Island further uncertainty, having little influence on the negotiations. I presume that is why the Chief Minister seems to be taking it so seriously.

Uncertainty prevents investment, and that's what the Island needs to rebalance its books. Who will move there business to an Island that is a passenger in the Brexit negotiations?

Edited by wsn03

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We are going to look at another property today in the hope that the seller is motivated to do some business. 

If not,there is a real possibility that we may just hunker down and liquidate our assets and continue to rent until the ship hits the rocks.

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3 hours ago, ThePrufeshanul said:

We are going to look at another property today in the hope that the seller is motivated to do some business. 

If not,there is a real possibility that we may just hunker down and liquidate our assets and continue to rent until the ship hits the rocks.

Good luck with it, please let us know what happened.

I'm in the unusual position of finally being able to consider buying a flat there to use on my many trips home, looking realistic because prices have come down so much. However, I'm now starting to question what for? Why spend years paying off a 60k mortgage, on something that may be worth 30k in 10 years time - I'd be the muppet paying for its depreciation and the banks financing. I've always wanted a bolt hole in my old home, but I just don't see how prices can ever go anywhere but down from here onwards, because I see no escape route for the Island to get out of the simple situation - it is spending more than it is earning, and the pensions bill is getting bigger.

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I think the crash will be coming in the next few years.

 

Why dont you rent a place and, when you arent there, sublet it as a holiday property? That way you can actually make money and have a comfortable place to return to when you need it without exposing yourself financially.

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3 hours ago, ThePrufeshanul said:

I think the crash will be coming in the next few years.

 

Why dont you rent a place and, when you arent there, sublet it as a holiday property? That way you can actually make money and have a comfortable place to return to when you need it without exposing yourself financially.

That's a brilliant idea, trouble is i think there are usually rules about subletting in the tenancy agreement. 

Not sure on the crash timing...but do you see a way of salvaging anything out of it? Atm i don't. 

Edited by wsn03

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There fdo seem to be places up for renting and I'm sure you could come to an agreement with the owners :)

I think the crash will actually be an opportunity to invest in stocks and property that would otherwise be unaffordable.

I apologise if that sounds overly cynical but since having a child we have just been focussing on whats best for the family. 

Currently the plan will be to sell our house in the UK then use the money to put into stocks, precious metals and Bitcoin until the inevitable happens.

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On ‎17‎/‎05‎/‎2017 at 10:50 AM, ThePrufeshanul said:

There fdo seem to be places up for renting and I'm sure you could come to an agreement with the owners :)

I think the crash will actually be an opportunity to invest in stocks and property that would otherwise be unaffordable.

I apologise if that sounds overly cynical but since having a child we have just been focussing on whats best for the family. 

Currently the plan will be to sell our house in the UK then use the money to put into stocks, precious metals and Bitcoin until the inevitable happens.

I keep mulling this over, its a damned good idea, I expect there will be some empty properties that could be long term let. I really want my own place, the Island is my home - however, I just don't see it being anything other than a commodity that will keep on falling. I remember the 70s, it was bad there, only the finance sector bailed them out. I don't see anything let to bail the Island out this time, which really depresses me, I've lived though decline there before, it wasn't nice. If I'm losing money on my bolt-hole it will feel even worse!

I agree with your sentiments for sure.

I worry that bitcoin is another tulip bubble, be careful with that one. However I'd do same as you in your position. One further issue for planning for your kids - what future will they have on the Island by the time they grow up. Out of the 3 of us siblings 2 of us left to make our lives (opportunities weren't at the same level on the Island), and the remaining one should have left (hit a ceiling working in government that led to a very unfulfilled and unsatisfactory career).

 

 

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On ‎17‎/‎05‎/‎2017 at 10:50 AM, ThePrufeshanul said:

There fdo seem to be places up for renting and I'm sure you could come to an agreement with the owners :)

I think the crash will actually be an opportunity to invest in stocks and property that would otherwise be unaffordable.

I apologise if that sounds overly cynical but since having a child we have just been focussing on whats best for the family. 

Currently the plan will be to sell our house in the UK then use the money to put into stocks, precious metals and Bitcoin until the inevitable happens.

I seem to have ended up striking it slightly lucky. The new job I'm about to accept has a small interest in the Isle of Man, and can in turn purchase a couple of apartments to suit - one will be used almost exclusively by me.

However, I have been checking out prices, and I am still shocked at how high they are. There is no way I would want to invest any of my own money in those prices, with not rosy outlook on the horizon - it just defies belief. It must be the same old thing - cheap money keep everything artificially high.

I'm struggling with commercial property too. The units I'm looking at, equivalent size of 4 double garages apparently, I think they said in Balthane, 200k. Is there that much bustling industry?

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14 hours ago, ThePrufeshanul said:

Nope - massive bubble here from people who don't need to sell for the money.

Hmm, thought as much.

The decision on what /when to buy will be with me. The commercial stuff seems way over-priced. We don't need anything unit wise until about October next year, and not very big at that point. I think we'll rent.

The bigger unit will be needed from about Oct 2019. I'll see what rents vs purchase options are then.

I just cannot believe commercial property can be holding its own in light of everything else going on.

As for residential I'll need to sleep on it. Purely from a selfish point of view I'd rather get it over and done with next year, I'll sleep on it. It's not so bad when it's not your money (I know that doesn't help, and I am very annoyed about over-priced property period).

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On 3/18/2017 at 2:47 PM, wsn03 said:

Anyone care to comment on the spiral of decline on the Island.  Ive been closer to it than im going to discuss. See Zoopla, up to 50% reductions on higher end property. Declining population. 

Anyone want to comment?

 

 

probably a lack of hetrosexual men willing to invest in the "isle of man" surprisingly the pink pound is not doing too much either.

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wsn03, how much would a future house price fluctuation after buying on the Island effect your standard of living? There could be hpi, unlikely, but if it happens, would you sell the apartment to cash in? If prices become static, no never mind. If prices drop like a stone after you've bought, is it just the thought of 'Should have waited' that hurts?

With you wanting a bolt hole there, I'd guess it's a forever purchase. If you can afford a place that you want to end your days living in, then spend your money on getting what you want, when you want it. That way, future price changes are irrelevant to you. 

 

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3 hours ago, John51 said:

wsn03, how much would a future house price fluctuation after buying on the Island effect your standard of living? There could be hpi, unlikely, but if it happens, would you sell the apartment to cash in? If prices become static, no never mind. If prices drop like a stone after you've bought, is it just the thought of 'Should have waited' that hurts?

With you wanting a bolt hole there, I'd guess it's a forever purchase. If you can afford a place that you want to end your days living in, then spend your money on getting what you want, when you want it. That way, future price changes are irrelevant to you. 

 

I'd like to visit the Island to the end of my days.

A place to call my own can be a rented place - I mean anything on a mortgage is still renting, its just renting from a bank instead.

If I can secure somewhere to use when I visit there I've got what I want, no matter who owns it.

As it is the issue is fast disappearing, the role I'm taking on effectively gives me the free use of a bolt-hole indefinitely. I know jobs can change etc, this one is unlikely to, I'll be running the whole operation, and the way the owner is structuring everything is based on me agreeing to replace him for as long as I have a sound mind (its legacy is more important to him than his own take home) - he's even structuring his will in a way that makes it pretty bullet proof.

With that in mind I don't mind who's name is on the deeds, as long as I have a place to stay when I visit the Island. To be honest I'd be happy in a static home! I just like returning every now and then.

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