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 Post subject: Re: London has popped.
PostPosted: Mon Jan 15, 2018 10:15 pm 
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Location: London, innit
mr_anderson wrote:
Anyone know the reason Carillion collapsed (beyond ''too much debt'')?

Razor thin margins and significant cost overruns on a few big project


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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 12:21 am 
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Quote:
The foreign investor market in London is on its knees – with ‘hundreds’ of buyers of homes purchased off-plan over the last four years nursing huge losses.

The problem, says one large London agent, has been ‘massively under-reported’ by the media.

With values of such properties having dropped like a stone, some investors are unable to complete on their purchases, with the developers taking possession.

Others are having to sell at almost a one-third loss to avoid having to hand back distressed properties to developers, and then risking legal action and greater losses.

Steven Herd, founder and CEO of MyLondonHome, an agent which is one of the biggest players in the new homes and investment market, said that every day, his firm is having to try to help a foreign investor exit a deal with the least pain.

He said he does not know a single instance where a foreign investor who has bought in the last two years has done anything but made a loss on an off-plan purchase.

In some instances, losses have been as low as 5%-10%, but in others, investors have taken a far greater hit.

In an exclusive interview with EYE, Herd said: “At times, my firm feels as though we have become debt advisers, and not estate agents.

“My office has hundreds of files where investors have lost money.

“The problem has been massively under-reported, because the Land Registry does not record prices at exchange, only at completion.”

Developers, he said, have also not made much noise for PR reasons: “They rely on pre-sales, and investors buying into phases one and two of schemes.”

Typically, investors put down a 20% deposit on an off-plan investment. They then plan to ‘flip’ the property at a profit before it completes.

For example, they might have put down £200,000 on a £1m off-plan flat expecting it to be worth £1.2m or £1.3m within two or three years.

Instead, said Herd, they are finding its value has dropped to between £750,000 and £800,000.

In one recent case, a Russian investor bought an off-plan property in 2014 for £3.1m. He could not afford to complete and could not raise a mortgage.

MyLondonHome sold the property at £2.55m days before completion.

“I am also concerned that if you kill off the foreign investor market, you kill off London’s Zone 1 market, then the suburbs, then the home counties and beyond.”

http://www.propertyindustryeye.com/fore ... lan-deals/

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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 5:20 am 
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Of Systemic Importance

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Average London prices are up 20% since this thread began, which is the same change as peak to trough after 2008.

Prices are 60% higher than that 2008 peak.

Just shows the futility of prediction.

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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 12:04 pm 
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Eschatologist wrote:
Just shows the futility of prediction.


The OP misrepresented a comment from the chief executive of the Nationwide who said the London Market would "cool" which is what happened for the following year. The 20% increase since this thread began is almost entirely due to growth in the year from April 2015 i.e. the year before the Brexit referendum. Average London prices have flat lined since except for a bounce last summer.

Prediction is extremely difficult but not futile. Timing is the trickiest aspect, especially when central banks are pulling the strings :oops:


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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 12:18 pm 
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Lefournier3 wrote:
The 20% increase since this thread began is almost entirely due to growth in the year from April 2015 i.e. the year before the Brexit referendum. Average London prices have flat lined since except for a bounce last summer.

Prediction is extremely difficult but not futile. Timing is the trickiest aspect, especially when central banks are pulling the strings :oops:

The referendum itself was predictable in early 2015 since the commitment to run one was in the Tory manifesto. And the result was predictable because there are only two outcomes and one of them has to happen. And the consequences of an out result are predictable because why wouldn't bankers and foreign money get nervous when the country is leaving a massive trading block.

So it was all predictable and yet it wasn't predicted, because if it had been the market would have priced in the consequences and there would have been no uptick in prices after the Tory manifesto was out.

Brexit is a "grey rhino", to use that new term. Everyone knew it was possible but they didn't react appropriately, even those who could afford very expensive advice.

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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 12:52 pm 
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Also to factor in the fall in GBP which would be impacting the return for foreign investors who entered before the vote.

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Those who don't study history are doomed to repeat it. Those who do study history are doomed to watch everyone else repeating it.


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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 2:44 pm 
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"The referendum itself was predictable in early 2015 since the commitment to run one was in the Tory manifesto."

In fact, Brexit was an increasing risk for about a decade but it took most people by surprise because it required two major upsets - the Tory victory in 2015, which took the Lib-Dems out of the picture, and the referendum outcome itself, which would have been different if London's transport had not been reduced to chaos by a tremendous rainstorm.

Brexit is still not a done deal and no-one can predict its effect on London's financial services sector, the main driver of the London market. London prices have flatlined almost every month since the referendum and most observers think Brexit has held back price growth but the long-term impact will only emerge when the Brexit deal is done towards the end of this year.

"And the result was predictable because there are only two outcomes and one of them has to happen."

I'd love to hear someone like Nassim Nicholas Taleb challenge your logic here. It reminds me of the nutter who predicted that turning on the Hadron Collider could create a black hole to swallow the world. He argued that there were two possibilities - nothing happens or armageddon - and therefore there was a 50/50 chance of armageddon!


Last edited by Lefournier3 on Sun Jan 21, 2018 2:50 pm, edited 2 times in total.

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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 2:48 pm 
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Lefournier3 wrote:
I'd love to hear someone like Nassim Nicholas Taleb challenge your logic here.

I wouldn't. He's a complete cockwomble.

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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 6:48 pm 
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Eschatologist wrote:
Average London prices are up 20% since this thread began, which is the same change as peak to trough after 2008.

Prices are 60% higher than that 2008 peak.

Just shows the futility of prediction.

Well we heard similar arguements continually in Ireland 2002-2008. Eventually it blew. How woulc the UK housing market fare if their substantial budget deficit had to dissappear tout suite?


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 Post subject: Re: London has popped.
PostPosted: Sun Jan 21, 2018 6:52 pm 
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Epicurus wrote:
Eschatologist wrote:
Average London prices are up 20% since this thread began, which is the same change as peak to trough after 2008.

Prices are 60% higher than that 2008 peak.

Just shows the futility of prediction.

Well we heard similar arguements continually in Ireland 2002-2008. Eventually it blew. How woulc the UK housing market fare if their substantial budget deficit had to dissappear tout suite?

Right, but "we" is biased towards predictability by one easy call.

Do I need to reference the Pin threads on Australia, NZ and China?

Sure, every market has a downturn eventually, but that's not a prediction.

I'm not claiming any special skills here, quite the opposite. I've miscalled the UK market several times in my life, to my considerable financial disadvantage.

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"It's easy to confuse what is with what ought to be, especially when what is has worked out in your favour"
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 Post subject: Re: London has popped.
PostPosted: Mon Jan 22, 2018 5:18 pm 
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This thread started in 2014, and referenced an article from 2008. So, it wasn't a great call when it started. But now, I believe, we are definitely in down-turn territory in London. (I am, btw, still bullish on the Dublin/Ireland housing market.)


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 Post subject: Re: London has popped.
PostPosted: Mon Jan 22, 2018 5:42 pm 
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Eschatologist wrote:

Do I need to reference the Pin threads on Australia, NZ and China?

A very good point but having moved to oz for a few years after the bust in Ireland I was left in no doubt that OZ and NZ avoided the western economic crash by very firmly hitching their wagons to China after 08, its essentially a bubble sitting on top of the Chinese bubble, so it's the Chinese demographics that need watching.
Image
Chinese investment clubs have been buying from Sydney to Vancouver to Manchester, just like syndicates of amateur investors from small Irish towns bought apartment blocks in an eastern european countries where none of them had even visited!

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Every single frozen corpse in the Death Zone on Everest was once a highly motivated person.

Those who don't study history are doomed to repeat it. Those who do study history are doomed to watch everyone else repeating it.


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 Post subject: Re: London has popped.
PostPosted: Mon Jan 22, 2018 7:05 pm 
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Joined: Sep 13, 2007
Posts: 31690
Location: Tullamore
Eschatologist wrote:
Lefournier3 wrote:
I'd love to hear someone like Nassim Nicholas Taleb challenge your logic here.

I wouldn't. He's a complete cockwomble.

:D It does all seem to have gone to his head. From betting on outside probabilities and winning, to arguing with history.

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 Post subject: Re: London has popped.
PostPosted: Tue Jan 23, 2018 12:13 am 
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Fitch predicts London prices will flatline again this year and only Greece will do worse in the EU. Ireland will rise another 10% XX
https://www.ft.com/content/56f21234-ff6 ... 0ad2d7c5b5


The FT scrutinises the market in one fashionable area of London:

“In a very strong market, Fulham tends to act like prime central London,” said Lucian Cook, Savills’ director of residential research. “When the market conditions weaken it tends to look a lot more like south-west London, and that’s what’s happening.”

https://www.ft.com/content/5fe506a4-fd1 ... d59aace167


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 Post subject: Re: London has popped.
PostPosted: Fri Jan 26, 2018 6:39 pm 
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Joined: Oct 11, 2012
Posts: 699
https://www.theguardian.com/business/20 ... il-to-sell

"More than half of the 1,900 ultra-luxury apartments built in London last year failed to sell, raising fears that the capital will be left with dozens of “posh ghost towers”.

The swanky flats, complete with private gyms, swimming pools and cinema rooms, are lying empty as hundreds of thousands of would-be first-time buyers struggle to find an affordable home.

The total number of unsold luxury new-build homes, which are rarely advertised at less than £1m, has now hit a record high of 3,000 units, as the rich overseas investors they were built for turn their backs on the UK due to Brexit uncertainty and the hike in stamp duty on second homes."


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