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NYC Property Deflationary Spiral?


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It looks like the New York property market is in a deflationary spiral which is going to destroy the city.......or so some are saying.

If it's good for NYC then London has to be next.................Maybe the plan was always to crash worldwide property markets.

The Chinese can then buy everything up at rock bottom prices.

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It looks like the New York property market is in a deflationary spiral which is going to destroy the city.......or so some are saying.

If it's good for NYC then London has to be next.................Maybe the plan was always to crash worldwide property markets.

The Chinese can then buy everything up at rock bottom prices.

Links?

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Wouldn't surprise me, I've seen similar commentary saying London will be toast post-covid, 2021 will be really interesting to watch in terms of where the dust settles. Home working is here to stay and everyone's looking for more space, plus all the lockdown job losses, some argue London's 'allure' will be enough to pull people back but even, say, a 20% drop in demand due to homeworkers fleeing would be material.

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Wouldn't surprise me, I've seen similar commentary saying London will be toast post-covid, 2021 will be really interesting to watch in terms of where the dust settles. Home working is here to stay and everyone's looking for more space, plus all the lockdown job losses, some argue London's 'allure' will be enough to pull people back but even, say, a 20% drop in demand due to homeworkers fleeing would be material.

I would say London has two things going for it in the coming years.

First, assuming there is a hybrid model of office and home working, working from home will result in cheaper office rents. Companies that are currently priced out of London and are located say in Slough may take advantage of the cheaper office rents and relocate their offices to London. In London they can more easily attract new talent and more easily network with other companies. This argument probably applies to New York City too. 

Second, as it the capital, MPs live there much of the time and so have a vested interest in making London a desirable place to live. After all no one wants to live in dump. Given they have quite a lot influence this could be a big factor in London’s future success. 

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I would say London has two things going for it in the coming years.

First, assuming there is a hybrid model of office and home working, working from home will result in cheaper office rents. Companies that are currently priced out of London and are located say in Slough may take advantage of the cheaper office rents and relocate their offices to London. In London they can more easily attract new talent and more easily network with other companies. This argument probably applies to New York City too. 

Second, as it the capital, MPs live there much of the time and so have a vested interest in making London a desirable place to live. After all no one wants to live in dump. Given they have quite a lot influence this could be a big factor in London’s future success. 

So the tendency to decentralisation will benefit central cities? Wtaf?

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I would say London has two things going for it in the coming years.

First, assuming there is a hybrid model of office and home working, working from home will result in cheaper office rents. Companies that are currently priced out of London and are located say in Slough may take advantage of the cheaper office rents and relocate their offices to London. In London they can more easily attract new talent and more easily network with other companies. This argument probably applies to New York City too. 

Second, as it the capital, MPs live there much of the time and so have a vested interest in making London a desirable place to live. After all no one wants to live in dump. Given they have quite a lot influence this could be a big factor in London’s future success. 

Agreed. A period of readjustment, perhaps, but there'll still be some attraction to living in London or NY. NY was supposed to be finished in the 70s/80s, and London wasn't much better, so I'm sure both can reinvent themselves again. I'd say that despite Covid, the long term trend will continue to towards big cities.

Edited by mattyboy1973
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Agreed. A period of readjustment, perhaps, but there'll still be some attraction to living in London or NY. NY was supposed to be finished in the 70s/80s, and London wasn't much better, so I'm sure both can reinvent themselves again. I'd say that despite Covid, the long term trend will continue to towards big cities.

I agree, cities rise and fall and rise again...cycles.

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So where would peeps wish to live?.......one place, or a combination of two or more places...... variety is the spice of life, boredom can be monotonous.;)

Well if money was no object I suppose the ideal is a townhouse in the city and a house in the countryside. That way you get the best of both worlds.

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Aside from the surge in dumb as poop from the entitled don't learn and don't work brigade - which would be put down once the lame orange duck is out - I can't see an issue. NYC is pricey because so many people want to go and live there. USA is very different to the UK, not uncommon at all to have a 'beach house' or lake house and head out there at weekends. 

Once covid is done with I can't see a long term issue, only short term while it finds its feet again. 

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New York is different in that it taxes residential property heavily compared to London where council tax is dirt cheap by all international standards at the top end of the market. Was there last year and took an interest in apartments (well the estate agents windows) and could see why prices were somewhat less than London or Australia when the annual cost of ownership is so high.   This is why every rich person in the world owns a place in London, its cheap to keep, financially safe and a good place to be if you have money to spend.  Scummy landlords may well get some punishment in London going forward but prime property might be even more in demand.

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So where would peeps wish to live?.......one place, or a combination of two or more places...... variety is the spice of life, boredom can be monotonous.;)

I would follow the rich mans/woman's climate in choice of place to live.  Caribbean in winter with a stint in the Swiss alps for skiing, spring somewhere south in Europe then London for Wimbledon and a bit of the summer and much time on my Yacht in the Med. All punctuated with weekends in whatever city takes my fancy.   Then repeat as many times as possible till I cant walk, swim or feed myself no more.

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Personally I don’t get the attraction of living in NYC apart for those looking for work experience or to work in certain companies.  If the home working trend continues I can see many cities entering a deflationary cycle, people will travel in or rent near those companies that insist on face to face time.  However, this will push up prices in other places initially before pulling everything down with it.  Once deflation takes hold it’s hard to stop as people decide to wait before making purchases.  Printy printy will of course be brought to the fight, barrow loads of it.

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The Most Splendid Housing Bubbles in America: December Update on House Price Inflation Gone Wild by Wolf Richter • Dec 29, 2020 • 206 Comments

https://wolfstreet.com/2020/12/29/the-most-splendid-housing-bubbles-in-america-december-update-on-house-price-inflation/

"New York metro condos:

Not to be confused with Manhattan condos that are now undergoing a reckoning, Case-Shiller’s index for New York City condos includes all of New York City plus numerous counties in the states of New York, New Jersey, and Connecticut “with significant populations that commonly commute to New York City for employment purposes.”

In these vast and diverse markets, the index for condos has essentially been flat since late 2017 and is down a smidgen year-over-year and from the peak in October 2018:"

US-Housing-Case-Shiller-New-York-condos-

 

Great related vid 

THE WOLF STREET REPORT: American Debt Slaves in the Weirdest Economy Ever  

https://wolfstreet.com/2020/12/27/the-wolf-street-report-american-debt-slaves-in-the-weirdest-economy-ever/

 

This need an update ....

 40% of N.Y. Tenants May Not Pay Rent This Month. What Happens Then?

  https://www.housepricecrash.co.uk/forum/index.php?/topic/236254-40-of-ny-tenants-may-not-pay-rent-this-month-what-happens-then/

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