Re: The property apocalypse draws closer...
 

Train wreck is what I think :eek:

Re: The property apocalypse draws closer...
 

:eek: No way

Re: The property apocalypse draws closer...
 

Ins I know of a bloke who may be coming out to work in Dubai round about then who will be looking for shared accommodation - nice guy just crap accomm. allowance - will let you know if I find any more out

Re: The property apocalypse draws closer...
 

sure! I've got a prety crap accom allowance as well! hence the desire to share!

Re: The property apocalypse draws closer...
 

I may want to come and see it please. Need a 2 bed in about 7-10 days time.

BeeBee ... do you cover the Marina/Tecom end for lettings?

Re: The property apocalypse draws closer...
 

It is worth looking at the property market dynamics in London because therein is a similar tale of bubble growth which has not really stopped. The same factors applied - rich investors, high salaried and bonussed staff in the city, the HK Chinese and the Russians, to some extent the emergence of the free funds from inherited wealth, Buy to Let, relaxation of lending ceilingsand the low interest rate together with the abandonment of rational decisions by purchasers. All of this to some extent is going on in Dubai - or if not then something similar. The only corrections that took place in UK were associated with interest rates in the 80's and the change in rules for tax relief on mortgage payments and the economic downturn in the 90's. Everyone has been saying since 1986 - this can't go on - but it has because the limits to growth are just far less sensitive that people think. Go out and buy - better still arbitrage and sell your house in the UK and buy in DXB. But only if you are very rich and don't need the job. Because if you don't have real free cash then you become part of the high risk subprime saga which is just starting to emerge (not settle).

Myself, I have a house and I live in it and I have investments for investing purposes and don't confuse the two.

Re: The property apocalypse draws closer...
 

Well, it didn't, did it? Witness the UK housing market crash of the early 90s; the Tokyo market crashed too in the same decade, and property prices in Tokyo are still way below, in real terms, what they were in the 80s.

That's the real problem - too many people believing that interest rates can never rise, coupled with banks relaxing their lending criteria far more than was ever prudent. Even the modest rate rises seen recently have started to put pressure on a lot of homeowners who are mortgaged to the hilt and trying to survive month-to-month by robbing Visa to pay Mastercard.

Re: The property apocalypse draws closer...
 

But there's a real shortage of empty places in London. Nevertheless, prices are definitely starting to stagnate if not fall (some places near my old house had reduced their asking price by 50k in the last few weeks and still haven't sold when I left, after two months+ on the market).

For a bit of schadenfreude, check out http://www.propertysnake.co.uk/...

Re: The property apocalypse draws closer...
 

Oh, and huge :thumbsup: to beebee for her patience earlier today - I feel like I'm having my own personal apocalypse every time I get in the car and get hopelessly lost! :embaressed_smile:

Re: The property apocalypse draws closer...
 

Thanks.. but I have only just got in!!

Re: The property apocalypse draws closer...
 

[QUOTE=typical;5272561]But there's a real shortage of empty places in London. Nevertheless, prices are definitely starting to stagnate if not fall (some places near my old house had reduced their asking price by 50k in the last few weeks and still haven't sold when I left, after two months+ on the market).

But that is the point. Demand - as evidenced by lack of vacant properties is high. Price is reducing locally so the price is too high!! The economics of the demand curve are based on accepted price not on offered price. So this sort of thing is just a transaction effect. Later there will be a real effect due to rising interest rates - that is a slow down of purchasing but it will not be a crash unless the money supply dries up - which is what happened in USA - the banks gave up on lending. That will be a crash - but it will recover and it really does not matter if prices do get higher; wages have and so has the ability of people to borrow.

Re: The property apocalypse draws closer...
 

But of course, wages have not increased at anything remotely proportional to property prices. That's a big part of the reason why there is such a colossal debt mountain in the UK at the moment, and why so many people are going to get shafted by even small increases in interest rates.

Lenders have just been stupid in the amounts they have been willing to let borrowers have, and they're giving colossal sums to people who they wouldn't have touched with a barge pole even five or six years ago.

Sadly, risky strategies like that can only work for as long as money remains cheap... and it's slowly but surely becoming more expensive.

Re: The property apocalypse draws closer...
 

Gareth is right in the long term but it seems to me that the debt capacity of supply and demand are not yet met. Bad debt in UK banks is managed through selling the debt to other banks and through accounting provisions. The ever increasing profits of banks are partly due to success in mortgage lending but by no means all. There is a huge amont associated with secondary trade such as further transactions with people who have mortgages. The banks profits are so high (and cusioned by artificial (and some may say (illegal)) profit provisions that they have a long way to go before they are affected by bad debt. It is like UK tax - in fact it is pitifully low when you copmpare it to Europe for the services provided.

Now from the demand side we really don't pay enough!! Mortgage / Rent of30% to 50% of take home still leaves 70% to 50% left and let us not dwell on cakes or bread arguments. Reposessions are not important in the scheme of things at present. The longer time goes on the more people pay off mortgages and so free up the debt market. The big issue of endowments should have devastated the debt market by now but was just another little problem which like reposession is highly selective.

The negative equity of the 80s is submerged in the massive home positive equity - which is real value - so let us not kid ourselves into believing the crisis is imminent. Yes it will come but structurally it will associate with another crisis such as the loss of the financial services industry or war with China but these are remote.

Re: The property apocalypse draws closer...
 

That's very glib, and completely fails to take into account that mortgages now take up far more than 30-50% of take-home pay for millions of people, especially first-time buyers who have been seduced by the "buy at all costs" mantra and have taken out unwisely large home loans.

In many cases, these are couples who can only afford their houses because almost 100% of one partner's salary (usually the one earning the most) goes towards the mortgage, while the other partner's salary (often far less) is used for actual day-to-day living. These are most likely to be the kinds of people who are juggling their monthly living expenses using several near-maxed-out credit cards, too.

90s, actually.

How is it "real value"? It's mostly artificial value, created solely because banks have become willing to lend sums of money they would never previously have considered.

Re: The property apocalypse draws closer...
 

er thats exactly what the US banks and lenders were doing until enough woke up and realised that it was fundamentally stupid and so banks have now stopped buying debt and as such their sub prime market has imploded. The full ramifications of which are still to ripple across the whole financial market.

You seem remarkably positive considering just how close to the edge several million UK Owners/borrowers are. In "real" terms we have just been through the cheapest lending period in history and its now coming to an end, it is estimated that an interest rate rise of just 1% over the next year could see the number of fire sales reach into the millions.

All in all a rosy outlook I'd say