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Prices and Sales Plummet at 2018 year end

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Property Trade Magazine Using very Bearish headline.

Quote

Prime Central London sees prices and sales plummet at 2018 year end

Naomi Heaton, CEO of LCP, comments: "Average annual prices in December for Prime Central London (PCL) now stand at £1,844,031. They have fallen 6.0% over the month and 10.2% over Quarter 4 2018.

striking that falls are 6% in just one month!

https://www.propertyreporter.co.uk/property/prime-central-london-sees-prices-and-sales-plummet-at-2018-year-end.html

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Somehow they still blurt out:

Quote

The average price for the last 12 months was £257,668. This represented annual growth of just 2.8% for 2018, the lowest since 2013.

Just 2.8%.

Against what wage growth over that period?

OK, I don't have the numbers but I will be very surprised if people aren't more than 1% further behind ... unless of course they have already signed the magic mortgage paper.

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2 minutes ago, crazypabs said:

Bloomberg also reported the other day that LCP undertook a writedown of their London portfolio of homes by 20%

https://www.bloomberg.com/news/articles/2019-01-23/a-prime-london-homes-fund-has-slashed-its-net-asset-value-by-20

 

That's 20% over 6 months up to September ... so not going to include the mention 6% for "this" month, ... ... if the next 5 months continue like this one then they will "lose" 30% more again.

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“Prime central London is probably now enduring its most protracted period of price suppression since records began,” a report to investors in the London Central Portfolio Property Fund said

Poor suppressed house prices!

What causes this vile demagogic suppression that manages to overcome all the favoured status and subsidies loaded onto property investors??

 

 

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7 hours ago, ftb_fml said:

Fantastic news - looks like it's really starting to snowball. 6% in a month suggests things are really starting to get exciting :D

IIRC in the 88-89 Lawson spike the fastest monthly rise was about 5%.

6% off the combined valuation of all PCL properties is serious wealth destruction folks. Quick fag packet calc:

Assuming 100,000 £2M properties, £12,000,000,000 has disappeared from the paper wealth of the richest few thousand families in the world.

In 1 short month.

This is on the back of a 20% drop from the 2016 peak.

A lot of projects/new ventures/deals backed by bloated PCL property valuations will now be cancelled or put on hold leading to further downward pressure.

Excellent.

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Theres an extraorindary article in todays FT:

London’s cut-price mansions: expect more deep discounts

https://www.ft.com/content/9545dd32-22f8-11e9-b20d-5376ca5216eb

Its centre  on the 5m+ market. But these drag all London up. Then drag London down.

Starts with the hedgey buying the 95m. The pointing  out it was up for sale for 145m - thats ne hefty price cut - ~40%

Sales fo 5m+ 38% lower.

Pointing out that developers - which apparently include a lot of hedge fund (I think they mean private finance) are being urge to slash prices and are getting problems with banks.

More repos of super-prime ones in the last 12 months than the last 10 years ...

Stating 2013/14 was the high point. Developers who bought then are in deep doo.

Supring - 50% of 5m+ have some form of mortgage. Thats scary. Too scary for the banks who are running away from the chunk mortgage market - oo much risk in too little diversity.

25% of loan since 2014 have had a margin call ..

Typical whale mortgage of 5M is 5 years. Lots coming to an end now .....

My only cutnpaste:

In March, Savills sold a home on Cresswell Place in Kensington for £25m. An agent, who wished to remain anonymous, says the home was first marketed at £42.5m in 2015 and the developer turned down an offer “in the thirties” soon after. After the receivers were appointed last February, they slashed to price to £20.95m.

 

Not giving it away 2019 ....

 

 

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But spy, stop saying that rich people are having problems, if prices drop they will be able to hoover all the properties with their pockets full of cash.

(Sarcastic comment towards the simplicity some people display on this forum about how rich people always win and are ready to buy any property with a falling price tag)

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2 minutes ago, Freki said:

But spy, stop saying that rich people are having problems, if prices drop they will be able to hoover all the properties with their pockets full of cash.

(Sarcastic comment towards the simplicity some people display on this forum about how rich people always win and are ready to buy any property with a falling price tag)

Well they're clearly swimming naked...

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11 hours ago, hotblack42 said:

IIRC in the 88-89 Lawson spike the fastest monthly rise was about 5%.

6% off the combined valuation of all PCL properties is serious wealth destruction folks. Quick fag packet calc:

Assuming 100,000 £2M properties, £12,000,000,000 has disappeared from the paper wealth of the richest few thousand families in the world.

In 1 short month.

This is on the back of a 20% drop from the 2016 peak.

A lot of projects/new ventures/deals backed by bloated PCL property valuations will now be cancelled or put on hold leading to further downward pressure.

Excellent.

Once you get over 5x LTE, any fall in prices becomes life altering.

At 10 LTE a ~20% fall is going to suck up  ~5 years of of your post-tax income.

50%, returning LTE to their average of ~5 LTE - 13 years earnings.

Brutal

 

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7 minutes ago, Freki said:

But spy, stop saying that rich people are having problems, if prices drop they will be able to hoover all the properties with their pockets full of cash.

(Sarcastic comment towards the simplicity some people display on this forum about how rich people always win and are ready to buy any property with a falling price tag)

Oh god, you saw this genius too?

https://inews.co.uk/opinion/comment/house-prices-after-brexit-uk-crash-how-affect-first-time-buyers/

Another example of why JP failed 

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14 minutes ago, Si1 said:

Well they're clearly swimming naked...

Not quite.

Swimming in trunks that they took out a £5m to use.

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26 minutes ago, Si1 said:

Wtf

 

Are even the super rich just debt junkies too?

Money laundering.

https://www.housepricecrash.co.uk/forum/index.php?/topic/232739-londons-dirty-russian-money/

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30 minutes ago, Si1 said:

Wtf

 

Are even the super rich just debt junkies too?

Yes

I know one deal where a Chinese Investor had 50 million to invest.

50m > Singapore > leveraged to xxx million > bought houses and commercial property in UK.

Some of that commercial property may also be leveraged as held in LTD companies.

There is a reason why there is so much $ debt in the world.

Dodgy money > leveraged > leveraged again > then invested in mortgaged property.

Boring 150m2 apartments in decent parts of London with 20+ owners etc etc

Hundreds of apartments bought by flippers who have no intention of paying the balances.

Soon we will be passing over a collapse point the point at where banks break rank, where better to get something than nothing back. 

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12 minutes ago, localhero1983 said:

We are now watching what should have happened in 2008-2010, but it was put off at all costs.

This property crash is now going to be bigger and uglier

Definitely. 

Before it was people buying houses for too much.

QE went to the richest and in the US and the UK they have bought thousands of properties.

For example a hotel for sale I know of one that needs a few million invested.  Was going to be sold for 4 million was bought for 5-6 million as a job lot (bizarre paid more) and has had no money invested since.

The buyers Chinese with a US investment bank.

UK buyer at the time 40 equity 60 loan with 3% rate

the buyer with the investment bank .... sub 1.5%

In the US investment vehicles have bought thousands of repossessed family homes.

Utterly disgusting corporate socialism zombies from day one.

Edited by Fromage Frais

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I guess those who scoff/scoffed at comparisons to Tokyo RE bubble implosion 30 years ago not quite so sure of themselves now.

I feel really sorry for that Israeli guy, piling in for £0.5 billion in London flats at peak.

Not.

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2 hours ago, zilly said:

I guess those who scoff/scoffed at comparisons to Tokyo RE bubble implosion 30 years ago not quite so sure of themselves now.

I feel really sorry for that Israeli guy, piling in for £0.5 billion in London flats at peak.

Not.

I was thinking really until I saw the "not" at the end of the sentence. I want to see BTL, property speculators home grown and foreign and anyone who just sat £ signs where property was involved to be seriously burnt and punished, I never want to see homes used in my lifetime as a way to a quick Buck ever again

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3 minutes ago, localhero1983 said:

I was thinking really until I saw the "not" at the end of the sentence. I want to see BTL, property speculators home grown and foreign and anyone who just sat £ signs where property was involved to be seriously burnt and punished, I never want to see homes used in my lifetime as a way to a quick Buck ever again

I want to dream that my children might be able to live a life where the price of housing (in terms of buying or - as related - in terms of rent) is not just spent feeding leeches.

A fall (even) a crash in prices might go a fair way to purging the leeches.

A real one, not a "fall"/"crash" that gets bailed out the way it did in 2007/08.

Admission: I know I have no idea how bad it would have been back then if they had let the bubble burst.

I cannot shake the feeling that TPTB won't find some other way to keep the balloon-of-a-thousand-holes inflated.

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2 hours ago, zilly said:

I guess those who scoff/scoffed at comparisons to Tokyo RE bubble implosion 30 years ago not quite so sure of themselves now.

I feel really sorry for that Israeli guy, piling in for £0.5 billion in London flats at peak.

Not.

Was that £0.5 billion spender not just the poster boy who will appear on all the "poor investor" posters/propaganda in the coming months?

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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