Sunday, September 2, 2007

A wee fall is still a fall!

House prices fall in capital

ESPC is expected to announce a drop in average house prices in Edinburgh, from £228,845 in July to £216,147 in August. Crawford (Halifax) is not getting too excited though. He said: "Prices will fluctuate in some regions. But strong areas such as London and Scotland should escape. Demand for property in key cities will prevent price falls."

Posted by su @ 07:53 AM (917 views)
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14 thoughts on “A wee fall is still a fall!

  • And there was me thinking that Edinburgh was a key city in Scotland! Oh, well….

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  • “fell slightly”!
    5.6% in a month. Is this a slight fall?

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  • financial planner says:

    A wee fall? Looks like 5% to me!

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  • japanese uncle says:

    Further 60% fall is quite likely in the near future. In the current financial chaos, Edinburgh’s prosperity is numbered as the Northern detachment of the City of London. House prices were rigged by sheer financial speculation often originated overseas.

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  • Aye, not a bad wee fall at all! I’m hoping this will spread outside of Edinburgh – perhaps the commuter areas first (Various Lothians, Fife, & Scottish Borders) and then wider afield.

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  • JU. 60%? Are you serious? Wow! Somebody fetch me a wee dram. I’m feeling a touch faint!

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  • I think that may be a tough sensational JU, ?

    20 – 30% possibly but I would be sceptical of 60% even though London’s properties are overvalued by about 50% – 65%.

    However even 30% is a lot.

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  • japanese uncle says:

    As same as London, Edinburgh is totally dependent on the financial bubble money generated by the hedge funds, mutual funds, investment banks, commercial banks and linsuerance companies and of course property businesses located in the city with an unproportinate concentration. If or rather when 10,000 – 20,000 job losses occur including a few hundreds of highly paid financial executives, in a city with 400,000 plus population, the ferocity of the impact is so obvious, let alone the impact of the speculative money fleeing like a juggernaut back to their owners overseas.

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  • only those companies who have to gain from higher prices make these stupid comments

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  • Prices have never before fallen in Edinburgh – not in any of the past crashes – so perhaps this is an indication of just how bad things are under the surface!

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  • Japanese Uncle sounds on target from my experience. The entire business of Edinburgh is tourist money and banking, with politics and the university an aside. I lived in a building of flats near the Parliament that was re-mortgaged at a completely inflated value and the quite ordinary flats rented at £900 a month although valued at something around £650,000 each. Please tell me how that adds up. Oh, and the re-mortage proceeds were spent on property speculation in Dubai. The so-called “owner” of the property didn’t even exist, but was a fabricated borrower. I discovered this because the paperwork from the Sheriff was served on me by mistake, since they couldn’t find any “owner” except in the phony records. Talk about your “subprime” arrangements. There’s enough funny stuff in Edinburgh in the name of Northern Rock and other companies that it will be quite interesting when the joker on the bottom is pulled from the precarious “house” of cards.

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  • planning4acrash says:

    What is the average wage in Scotland? A guess here, but I doubt its much more than 20k. In a credit crunch, multiples go down to the normal 3.5%, and I guess that the average Scottish family takes home 25k. So, the average house should be right about 90k. So, that’s a 60% fall exactly. I reckon you could even get an undershoot of that, prices down to 70-80k average in 5yrs.

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  • Nitpicking here, but there’s more than one university in Edinburgh, plus colleges, and quite a lot of people come into Edinburgh for their shopping e.g. IKEA. (technically these large shopping centres might be just outside, not sure..)

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  • Nitpicking it is. Banking is the BIG deal. Notice please the luxury mall of upscale boutiques, salons, golfing and jogging complex that Royal Bank of Scotland built For Employees Only, on the way to the airport [opened by the Queen mind you]. The trade-off with the City is that they’d also build a walkway for employees to get to and from THEIR luxury venue. On the way to the same airport I mean where all the front rows of parking under cover are permanently reserved for RBS executives and their guests to the City. Shopping in and around Edinburgh is essentially mediocre compared with any capitol city you may know otherwise, and is too overpriced for most people to have much fun with it at their minimum wage salaries. The real business is money, money, money — big money and plenty of it. And those are the people who use Edinburgh property to invest in Dubai, with no chance of losing no matter who else may. I know people who work for Northern Rock who have verified the kind of lending practices I mentioned in the previous post to leverage Dubai investment on an entirely bogus pretext and identity as “not that unusual.” I also know any number of people in Scotland who have large mortgages they received based on their savings, a small deposit, and their projection of what they “will” make if they manage to land a decent job. That may be new banking attitudes to generally frugal Scots, but they’ve picked up the attitude and run with it and will suffer in large terms when this economy bites the dust. All, of course, except those who are back in their highrise in Dubai.

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