Thursday, December 4, 2014

Too big not to get prickeed

London Property Bubble Primed To Burst – Consequences For UK Economy and Sterling

he 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 @ 11:11 AM (2922 views)
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19 thoughts on “Too big not to get prickeed

  • One fly in the ointment for the above hypothesis is that London is absolutely booming now. On almost every metric is has comfotably exceeded the pre crisis boom years and is still accelerating. Notwithstanding the obvious implication of a two speed economy, there are not that many instances of a property crash in the accelerating stage of a boom.

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  • One fly in the ointment for the above hypothesis is that London is absolutely booming now.

    Not from where I’m sitting. Maybe that’s the view you have from your mansion.

    Thinks the party will go on forever – deluded.

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  • I can’t see the relevance of seating position. It’s just a matter of fact

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  • It’s not a matter of ‘believing’ anything either. Its just an empirical fact that that London is experiencing an economic boom, which in turn lessens the statistical probability of any significant house price crash in the capital. After such a big surge this year I can easily imagine some sort of softening but it’s hard to imagine a collapse when London is booming to such an extent.

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  • It’s not a matter of ‘believing’ anything either.

    Not sure that’s stopped you in the past, but it’s empirical fact that London prices are falling, data from Frank Knight.

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  • hpw, knight frank are reporting a miniscule drop in central prime only which is hardly surprising after such an outlandish and persistent rise. For every price fall in london article you’ll find ten saying the opposite. Knight Frank are actually the most bullish of the big London agents for next year with some massively optimistic forecasts including claims that the Russians are back in force. I’m at not at all sure I go along with that and I hope and think there might be moderate falls next year… but that was not my point.

    My point was and is that there are unlikely to be any significant falls in a city that is experiencing an economic boom. I hope and expect that there will be periods of moderate falls but that’s nothing go cheer about after some prices have doubled and trebled. If Knight Frank are correct, prices will carry on upwards for years.

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  • Its true SocGen & others see the UK as being in a housing bubble. Savills on the other hand see house prices gradually rising for the next few years (on their website).

    What is true for my family is the wish to get a house or flat of your own and gain independence from parents. My family are exceptionally focussed in this respect, so may be unusual. Meanwhile friends have decided they will never own their own and await the death of their parents. With medical support, they may have a long wait. The NHS hasn’t collapsed yet!

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  • Flashman – look at any chart of a crash, all crashes are preceded by a boom! That should make it easier for you to imagine……..in fact, the bigger the boom, the bigger the crash, its all just the law of reversion to the mean.

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  • @flashman #7! Re: industry fluffing, they would say that wouldn’t they – when was the last time you heard of a VI talking about a market reversal? This time is different, right?

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  • “@flashman #7! Re: industry fluffing, they would say that wouldn’t they – when was the last time you heard of a VI talking about a market reversal?”

    Yesterday. Winkworths predicted a 5 % fall in London house prices in the first six months of 2015 and more than half of the London centric agents are making the same prediction to differing degrees. In 2013 many of them also predicted falls. You’d be surprised by how different the world looks when you go beyond the usual blog assumptions and nonsense. Posters like reticent and bellwether before him, left the silly boy blogs behing them and ended up learning as much as many of the economics students I graduated with.

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  • And Winkworth also predicted that prices would go up around 5% in the second half of the year, to end the year flat, but up 3% in the South East. So their share price & dividends will be goldilocks in 2015!

    And what are these blogs that you keep referring to? I too find it incredible that the mainstream media can on portray this fairy tale financial system as reality, yet I prefer to focus on the arguments and ideas under discussion, rather than their sources – otherwise I might stray into fallacious territory!

    For example:

    Flashman is an economist,
    Flashman makes a statement about the economy,
    Therefore Flashman is probably right – and those other silly boys are just poor misguided fools?

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  • debtserf, you asked me a (rhetorical) question containing the incorrect assumption that ‘VIs’ never predicted anything other than rises.

    I answered your question. That’s all. Lots of London estate agents have predicted falls in the past and are doing so know. If you had done a quick search to verify your assumption before posting, you wouldnt be red faced and blustering at me now.

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  • Why yes, my jowels are positively quivering with indignation!^ )

    So the upshot of this one is that London’s booming, so no house price correction there? Id best get in before it’s too late!

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  • 9. Mark said… “Flashman – look at any chart of a crash, all crashes are preceded by a boom! That should make it easier for you to imagine……..in fact, the bigger the boom, the bigger the crash, its all just the law of reversion to the mean”

    As an ex analyst I can tell you that there is a positive correlation between the number of exclamation marks used by a poster and them talking cobblers. You are lecturing someone who used to get paid for his understanding of squiggly lines and it goes without saying that you are wrong. Not all crashes are preceded by booms and London house prices have been more or less on an upward tragectory for several cycles. The only reversion to mean has been a wobbling above and below a sharply rising exponential moving average. When there is a structural element to a price it can detach from more sentiment driven booms and busts. In any case, it’s far too early in the cycle to be talking about Londons economic boom coming to an end. You avid exclamation users have only just admitted that were not a Depression.

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  • “You avid exclamation users have only just admitted that were not a Depression.”

    If you will insist on bandying these punctuational ad hominems about, you might want to check your own grammar out first. Just sayin…

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  • It’s not just the teenage girl style use of exclamation marks. It’s the limted number of identikit phrases you all use. It’s as if you all came off a silly boy blog conveyor belt in 2007 armed with only five phrases and an enormous quiver of exclamation marks. Goodbye debtserf née several others.

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  • Well, I’m no expert but if articles like that are all that is keeping the faith in a HPC, it’s time to buy!

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  • More importantly, I see from my Guardian this morning that Jeremy Hunt tweets that it is acceptable to breast feed ostentatiously in public (if Claridges is public;they wouldn’t serve me after I got my own bottle of vodka out to top up my coke).
    I don’t want to trouble the Minister when he’s busy tweeting about tits in my tax paying time, so can anyone on this site please advise me whether it is alright to undo the top button on my jeans to adjust my dress from right to left in our local branch of Cote? I had a massive row with my partner after I stood up and did this because she thinks it infra dig. It now seems she’s a well behind trend. What do you say? Anyway, I will definitely be voting Conservative now as they clearly have their finger on the social zeitgeist.

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