Wednesday, July 4, 2007

“Beginnings of slowdown in broader market”

Savills sees ‘super prime’ property surge

Interesting "veiled bear" article: Hints that rising interest rates were beginning to dampen demand for both commercial and residential property came from Savills ... However, it said demand for “super prime” houses continued to rise strongly, with interest coming from international as well as UK purchasers. ... the super prime residential market ... continuing to benefit from City bonuses ... also “heavily influenced” by international buyers ... about half of purchases. ... people’s uncertainty about how far interest rates would rise deterred them from making purchases in case prices weakened ... confident that house prices would not crash. ... investors were becoming more selective, and yields on secondary properties were rising.

Posted by dohousescrashinthewoods @ 02:28 PM (369 views)
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3 thoughts on ““Beginnings of slowdown in broader market”

  • “…confident that house prices would not crash…”

    The builders of the Titanic were confident that it wouldn’t sink! – ho-hum!

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  • confused76 says:

    Less than 300 properties >£1.5m are sold every month in the UK
    It is a very small segment. Good luck Savills, Foxtons and Knight Franks. you ll have to fight with each other to stay in business

    Welcome Tesco! Tesco is going to dominate in the price range I can afford

    And I do not care if my neighbour speaks only russian and is a prize idiot for buying a terraced house for £4m (or $8m!!!!)

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  • confused76 says:

    Is this guy an i***t or a liar?

    “Mr Adams said people’s uncertainty about how far interest rates would rise deterred them from making purchases in case prices weakened, particularly in the commercial sector. Once interest rates reached a peak, however, he expected the market to adjust to new levels and recover. He was confident that house prices would not crash. ”

    Once IR reaches peak the market price will adjust to a lower equilibrium level, to balance affordability… i.e. since IRs are going up 1.5% over the initial 4.5% level, this means house prices will have to come down 33% (real) to reach the new equilibrium, that will mean a good -20% nominal… don t call it a crash, but it looks a lot like it

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