Thursday, December 4, 2014

It’s different this time, isn’t it?

The ongoing slump in oil prices looks set to take their toll on London’s “super prime” property markets with attendant consequences for the rest of the London property market. Foreign money that had been flooding into the UK from a whole ar

The ongoing slump in oil prices looks set to take their toll on London’s “super prime” property markets with attendant consequences for the rest of the London property market. Foreign money that had been flooding into the UK from a whole array of international sources and parking in London real estate is drying up.

Posted by hpwatcher @ 01:29 PM (2067 views)
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4 thoughts on “It’s different this time, isn’t it?

  • This article and the last (Max) both reference the Goldcore report. If Goldcore are right then a switch into gold might be a good idea.

    Gold hasn’t moved much for the last 3 days ($1205 per oz) so I guess not many speculators are taking their advice.

    They may be proved right in 2015. We shall see.

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  • I’m sorry. If this is true, there is literally only ONE thing I can say.

    Ha ha. Aha ha. Ahahaah ha. AhahahhhHhAhahH. Aha. AaaaaaaaAhAHAhhHAaaahahahahahahaAHAHAHAHAHA.

    OK there’s a second thing I can say: suddenly that £140m apartment doesn’t look too clever, does it?!?!?!?! I suspect that even if it dropped 90% to £14m then it would still be “expensive” for normal people.

    It’s the new friggin’ NASDAQ, dotcom, credit derivative, whatever.

    “Yours” the lot of it.

    Meanwhile, the rest of the country will go up, up, up but will be outpaced by wages as high (but not hyper) inflation starts to take hold.

    There is no other way out of the debt overhang … just no other way.

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  • Whilst the fall in oil helps all of London’s middle and working classes (still almost 90% of journeys taken by road).

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  • Article is too simplistic. China’s corruption has not decreased since the ‘crackdown’. Those who rate these things make China slightly more corrupt than it was when the ‘crackdown’ started. And by its very nature it’s difficult to measure Chinese money funnelled through tax havens into London property.

    The Gulf states are generally very rich (high GDP per capita – even if that’s due in part to well-paid foreign workers) from decades of selling oil, have healthy foreign currency reserves and have diversified their economies on the back of those oil revenues (Dubai has virtually no dependence on oil). And the drop in oil price is as much their doing (failing to cut production to match demand) as it is due to falling demand, so they are presumably relaxed about the drop. (And no sign of falling investment in racehorses and football clubs.)

    As for the ending of American QE, the Fed has simply passed the bond-buying job to the biggest US banks, which started buying USTs in earnest when the Fed announced its tapering. And JP Morgan Chase took over the $1.7 trillion of the Fed’s MBS holdings and rolls over maturing securities and invests other cashflow from these into more Treasury offerings. The Fed too needs to continue with cheap money since otherwise its $4.5 trill assets would plunge in value.

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