Friday, August 29, 2008
Tiiiiiiimmmmmberrrrrrrrrrrr !!!!!!!!
Happy Friday Chelsky property owners! Just in case you missed it, and were contemplating using your maison de ville as collateral for a 25-Flightpack from Netjets, Bloomberg reported prestige UK estate agents Knight Frank admission/calculation that high-end Central London props registered their first year-on-year price falls since 2003 in the YTD ending July, following the fourth straight month of consecutive MoM declines. Credit Crunch, City Bonuses blah blah blah you know the drill. Yet, London continues to be the magnet for the uber-rich with mega-props (i.e. those > GBP10million)continuing to register gains. FOr those tempted, I will again remind them that I reckon most buyers non-Sterling buyers will eventually be able to purchase their dream pied-a-terre in London's capital at 35% discount from peak values and a further 30% discount from a diminishing sterling rate of exchange. Vertigo, indeed!
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2 comments:
I read something interesting today on the subject of
"property chains". When a buyer purchases a
property,he/she often needs to sell a current residence. The purchaser of that property has the same issue, hence the "chain". When mortgages are easy to come by, there is little chance of a broken link. Under current
circumstances, however, a prospective buyer may
not get financing, impeding a chain of sales. The apparent solution: Sellers near the "top" are buying
a property further down the chain (and of lower value) in order to complete their sale/new purchase. This idea, originating in UK, has not
migrated to America (yet).
I saw that article too, but think its only indicative of the widening income inequality. Warehousing a property to break the chain and in the process taking a loss, or eating the carry to keep it for Jr's London college housing is but a rounding error in the world of the uber-rich. But London remains big, and as the recession and deleveraging bites, so too will the marginal offer exceed the marginal bid and destroy asset values in the upper-end. Maybe not the extreme upper-end of GBP10mm+ props but certainly most of the quartile just beneath it...
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