3nd GEI Conference Call : The First week in April?, Topic: Are we about to see a Major Low in UK Housing ? Options

[DrBubb]

Regarding the next conference call i think it's perhaps worth considering a segment on the immediate future of the Euro. There seems to be a lot of potential negative influences on what happens to the Euro next and we all know that the complexities of managing a currency across so many borders makes the ECB's job the hardest of any of the central banks.

That would be timely.
However, sitting here in HK, I do not feel that I am sufficiently well informed.
Any experts that we can tap on thsi subject?

[DrBubb]

A PRIME LIE ?

Peak Value : Pds. 3,000,000 x $2.00 = $6.00 Million
Current..... : Pds. 1,500,000 x $1.38 = $2.07 Million / drop: - 65.5% enough to attract buying?

Prime central London property prices rose by 0.94% in February, according to Primelocation.com this morning, the fourth successive month of rising values. Foreign buyers are snapping up trophy homes in the capital, taking advantage of the steep fall in sterling. This might cheer the editor of Country Life – whose property porn pages have been looking painfully thin – but few others will share the sentiment.

Outside of Mayfair and Knightsbridge, values continue to fall. Perhaps most striking is that if you drive just a few miles beyond the M25, "prime" homes are falling in value fast. The south-east recorded a 0.56% fall over February, while the south-west saw a decline of 1.83%. The bonus-rich City bankers who spurred astonishing price rises in the likes of Tunbridge Wells and St Albans have faded away, while the Asian and Russian oligarchs buying in zone 1 will never be tempted by the 7am train from Sevenoaks.

Primelocation sensibly does not predict a "ripple out" in prices from central London to the rest of the country. It can see the other side of the prime property coin – lettings to international high-flyers – and the picture there is grim. Last week, Hamptons International reported a 20% decline in the number of overseas applicants looking for top-end rental property in the capital, as few international banks are bringing employees from overseas to work in the City.

Primelocation this morning said prime London letting prices fell for the eleventh consecutive month, and were 13.7% lower than this time last year. Meanwhile, stock levels are up 97% on last year. It says the fall in rents is now a "firmly entrenched trend" and that landlords remain under pressure.

/more: http://www.guardian.co.uk/money/blog/2009/...on-house-prices

== ==

I can see the currency argument.
But frankly I find this argument:
"Foreign buyers are snapping up trophy homes in the capital, taking advantage of the steep fall in sterling. "
... hard to buy. Seems like a lie, or maybe a "statistical quirk" to me.

In the end, the falling rental demand has GOT to be the driving factor in Mayfair.
And the story there is dire, I believe.


NOTE : I am moving this thread to the GEI-N section, where I hope it will be easier to find

[Ologhai Jones]

Sorry I missed the last conference call. After taking part in the first one, I had intended to join in with the second, too.

Hopefully, I will be around and available to join in with this one.

[DrBubb]

DUMPING THE SURPLUS PROPERTIES - can Britain suck in the foreigners?

They are trying like mad ! Pushing the "affordability" brought by a weaker Pound

Here's Sterling (FXB) ... update : closeup-10days


(Note: anyone who buys thinking the FX rate will stay below $1.40 is taking a big chance IMHO)

LOOK HOW they are pumping Vauxhaul properties in Hong Kong...

There's a FULL PAGE advert in today's SCMP

Headlines:
1/
Riverside property attracts shrewd investors (haha!)
High-quality London development offers overseas buyers the chance to cash in (actually: to waste their cash)
on favourable British market conditions despite global economic slowdown



"... Asture cash rich investors may find that it is an opportune time to buy property" (or perhaps not!)
"The London property markety has fallen by 17 percent from its peak in 2007" (on its way to 50%+ down)
"British interest rates rates have dropped to 0.5 percent, lowest in BofE's 314 year history" (thnx to bad mgmt.)
"By the end of 2009, we expect income to service mortgage to be lowest since 1993." (so why not wait?)

"London population expected to increase by at least 410,000, or 5 percent, by 2016." (not likely in depression)

Prime central London development: Aquarius House in St George Wharf: spring/summer, 2010

1BR and 2BR units : Prices start from Pds.399,950 (HK$ 4.41 million)
Rental yields are expected to be "in the region of" 6.0 percent

"Purchaser interest is reviving in Central London... Foreign buyers... Sterling weakness."



2/
Regenerated South Bank shows strong potential
"Location, location, location has long been the estate agents mantra." (so why look at such a gloomy place?)
"the redesigned Vauxhall Cross station is directly opposite St.George Wharf." (and it's still a dump)

[DrBubb]

ASSETZ Trying to Talk up the Uk Market

http://www.cnbc.com/id/15840232?video=1022393969&play=1

Airtime: Thurs. Feb. 5 2009 |
The sharp declines in UK interest rates are boosting people's confidence in the property market again, Stuart Law, chief executive of Assetz, told CNBC Thursday.

"Average rate in the UK is 5.x%... way above the 1%."

But now... "People are flipping into a tracker rate."
"We cannot be ceratin how long these low rates will last. At some point, the rates will go higher...
Don't take a two year. Take a ten yera."

[DrBubb]

Housebuilding guru says bottom of the property market has been reached

By Mark Leftly / Sunday, 15 March 2009

Tony Pidgley, the great sage of the housebuilding industry, has called the bottom of the market.


Mr Pidgley, who made a fortune and his reputation for calling the 1990s housing crash correctly, told The Independent on Sunday: "We all accept that, give or take 5 per cent, the market is somewhere along the bottom [of its economic cycle]."

The chief executive at Berkeley Group, one of the few cash-rich housebuilders, added that there would be between 35,000 and 50,000 construction starts on new homes in 2009. He said 40,000 was most likely, meaning government ambitions to complete up to 240,000 new homes a year would not be fulfilled.

In its last interim results, Berkeley had a pre-tax profit of £79.6m, 12.1 per cent down on the same six months in 2007 – a good result, given the sharp downturn in housing

/see: http://www.independent.co.uk/news/business...ed-1645222.html

[DrBubb]

"BULL TRAP" IN HOUSING ?
==================

Bloomberg's Bernie Lo will be interviewing Marc Faber today, at 11am Hong Kong time.
I have a question and sent an email...

(Let's see if Bernie goes for this one):

Question for Bernie Lo and Dr.Marc Faber:

Global property prices are down sharply from their highs, and interest rates could be bottoming soon,
are we setting up for a "Bull Trap" in House Prices?

(in edit, after watching the show):

My question made it onto the Screen, but not into Faber's ear
Bloomberg screen shot at about 11:35am, HK time:

MICHAEL : "BULL TRAP" IN PROPERTY ?

They ran into a time limit before Bernie could ask the question properly.
Nevertheless, Faber did share his view on property:

+ Avoid buying property in financial centers (there might be a war, and terrorism in such places)
+ "Second cities" are better
+ Better still, is good FARMLAND "in the middle of no where"

Faber himself owns property in New Zealand, and in Thailand where he grows "good stuff"

[DrBubb]

Bloomberg screen shot at about 11:55 am, HK time:
MICHAEL : WHAT ABOUT PROPERTY ?

The question went on today.
ROGERS TO ME: "I wouldn't buy property in Boston with YOUR money."

My question about a possible Bull Trap was abbreviated.
Jim was asked, "What do you think about property?"

He answered,
"Property? Depends on where it is.
I wouldnt buy property in Boston. I wouldn't even buy property in Boston with YOUR money.
But Nebraska is a different thing. I would buy farmland in Nebraska."

The usual Rogers soundbites.

[surfdude]

I just listened to the second conference call and really found it informative. Thanks for putting it together. I would like to participate in the third call but am not sure about timing. When will it take place in Hong Kong?

BTW, I just saw the Marc Faber video and saw the question you posted. Too bad he wasn't able to ask it. I thought that Faber was still based in HK but I guess he is spending more time in Chang Mai with his "good stuff" and dogs.

[6v6]

I just listened to the second conference call and really found it informative.

Can anyone point me at the CC recordings? I've looked on the CWR site and don't seem to be able to find anything?

This CC re the HPC sounds very interesting. IMHO we may get a DCB going into the summer, then perhaps inflation will start kicking off again (imports are already rising massively, although they've removed them all from the CPI/RPI of course) so rates will rise. Can only hope....!

Thanks!

[littledavesab]

Can anyone point me at the CC recordings? I've looked on the CWR site and don't seem to be able to find anything?

This CC re the HPC sounds very interesting. IMHO we may get a DCB going into the summer, then perhaps inflation will start kicking off again (imports are already rising massively, although they've removed them all from the CPI/RPI of course) so rates will rise. Can only hope....!

Thanks!

http://globaledge.podbean.com/

ok how do i sign up for next weeks conference

[DrBubb]

Can anyone point me at the CC recordings? I've looked on the CWR site and don't seem to be able to find anything?

This CC re the HPC sounds very interesting. IMHO we may get a DCB going into the summer, then perhaps inflation will start kicking off again (imports are already rising massively, although they've removed them all from the CPI/RPI of course) so rates will rise. Can only hope....!
Thanks!

This link is given in the first post here, and also above: this should work too: http://GlobalEdge.podbean.com

Soon you will be able to get all the post useful links on the GEI Dashboard, which will be in this section.
Also with a link to it in the header.
== ==

CC Timing?: A week from Friday, or the day after on Saturday - let me know which is preferred

Friday.... 27 March : 7:30am London / or 3:30pm HK Time (does this reflect the time change?), or:
Saturday 28 March : 9:30am London / or 5:30pm HK Time

(Still looking to determine which date works best. Comments are welcome)

[littledavesab]

CC Timing?: A week from Friday, or the day after on Saturday - let me know which is preferred

Friday.... 27 March : 7:30am London / or 3:30pm HK Time (does this reflect the time change?), or:
Saturday 28 March : 9:30am London / or 5:30pm HK Time

(Still looking to determine which date works best. Comments are welcome)

morning suits me best preferably a friday or monday

March = still unchanged as far as BST /GMT is concerned

[chazza]

"Location, location, location has long been the estate agents mantra." (so why look at such a gloomy place?)
"the redesigned Vauxhall Cross station is directly opposite St.George Wharf." (and it's still a dump)

Living nearby, I go past "St.George Wharf" frequently and every time i wonder who has paid, probably, a great deal of money for these flats. More than 50% face Vauxhall bus station, the roads surrounding it are never quiet. Oh and MI5 is over the road, so you face a decent terrorsit threat also.

Awful location

[DrBubb]

Living nearby, I go past "St.George Wharf" frequently and every time i wonder who has paid, probably, a great deal of money for these flats. More than 50% face Vauxhall bus station, the roads surrounding it are never quiet. Oh and MI5 is over the road, so you face a decent terrorsit threat also.
Awful location

That's what I thought. None of that was apparent from the marketing pitch.
I decided to visit the sales area at the Mandarin to see what they were selling, and how they were selling it.
It took me 10 minutes to work out the property they were selling was on the back, with no view of the water.
I told the sales person that I tought it was probably noisey, and maybe a bit dark.

When I showed that I knew how to use a calculator, and I had worked out that their prices were equivalent to
HK$10,000 - 12,000 psf, I was told they they were prepared to discount the prices. I asked by how much, and
was told, "maybe by 15%." I told her that I would pass - that was still beyond my budget.

== == ==

I think it's 4 minutes into the second part
"Is property in 2009 a bulltrap?" From Michael Hong Kong
I think, I can answer that for you, in the UK - YES. LOL

From: http://www.youtube.com/watch?v=WL-larBxL7k
That's it!
The same question was meant to be asked of Jim Rogers yesterday, but Bernie flubbed it.
I think he found it too complicated, so he ask, "What do you think of property."

I saw Rogers yesterday, standing outside a conference (the Money Show), where he was speaking.
I had just had lunch with one of the other speakers, and when I was ready to approach him, and ask the question
properly, he had disappeared.

I suppose it doesnt make sense to ask about a possible "Bull Trap", until after the property rally has already started.
It may have started yesterday, with the encouraging news on housing starts.

[DrBubb]

Many have been looking for a Good Bounce for a Long time.
This is from the old "time to buy the homebulders" thread - in Members section

I was talking about US builders.

Actually, right now, the UK housing and sub-prime market is beautifully behind the US market. Everything seems to replay here 6 months after the US. So in the UK I guess it is short lenders, builders, estate agents. But in the US, it might be time to go long again.

Finally, we may have seen the time for the US.
But I reckon the final low in the UK may continue to lag the US.

However, the lower rates in the Uk and the money growth, may generate I nice rally, creating
a trap for Home Buyers, who cannot get in and out quickly enough

[Arn]

The following paper "“The Aftermath of Financial Crises”, by Carmen Reinhart and Kenneth Rogoff" may be interesting reading
http://www.economics.harvard.edu/faculty/r...s/Aftermath.pdf

Basically for RE it paints a scenario that on average from Peak to Trough of the following crash the time it takes RE is 5 year.

If as some say the peak was 2007 then 2012 is the trough.

But who said this was average.

Enjoy your call.

[Member100]

A PRIME LIE ?

Prime central London property prices rose by 0.94% in February, according to Primelocation.com this morning, the fourth successive month of rising values. Foreign buyers are snapping up trophy homes in the capital, taking advantage of the steep fall in sterling. This might cheer the editor of Country Life – whose property porn pages have been looking painfully thin – but few others will share the sentiment.

Outside of Mayfair and Knightsbridge, values continue to fall. ...

OWNERS OF LUXURY and their agents love to pretend...

http://www.ft.com/cms/s/0/c6abd334-a9d4-11...?nclick_check=1

The Candy’s well-publicised wranglings with Kaupthing, alongside separate discussions in the summer with Qatari partners at Chelsea Barracks, may be the least of their problems.

Far more important will be signs of a faltering market for luxury residential property. The slump in house prices has not yet hit the top end of the market, but there are question marks about how long “super prime” homes worth more than £10m ($16m) can defy gravity.

This became clear last week, when both partners in Noho Square admitted that their equity had long been wiped out.

In fact, given more than £200m of debt was used to acquire the site and take it forward, and a site value now as low as £50m, most of the Kaupthing debt will have disappeared as well.

The Candys, and their partners at Chelsea Barracks, which set a new record for land in London, will not want to think about what the £1bn site might now be worth.

Such high profile sites are likely to become emblematic for the rest of the super prime property market, so far the most resilient part of the residential sector.

In London, annual price growth for homes of more than £10m peaked at a whopping 45 per cent in September 2007, according to Knight Frank. Unsurprisingly, the rate has since fallen but remained positive until August this year against the trend of almost every other sector.

While the annual rate of growth was 6 per cent last month, this disguises the fact that values fell 5.4 per cent in September and October.

[DrBubb]

PROPERTY LAGGING SHARES - here's why that should not surprise anyone...

Do not pass go – or expect house prices to rise soon

With the value of property still in freefall Edmund Conway asks four experts why the housing market has failed to follow the upward trend of shares.

Last Updated: 8:12PM GMT 23 Mar 2009

Since hitting a low of just above 3,500 points earlier this month the FTSE 100 index of benchmark shares has rebounded almost 10pc higher. The explanation, say strategists, is clear: use almost any method of valuing the equities and they look extremely cheap.

So why has the housing market not enjoyed the same fortune? Granted, property values simply don't move about as fast as the stock market. But on most metrics house prices, which have fallen by around 20pc on most bases since peaking in late 2007, are now close to fair value. And yet every major economist expects prices to fall by a further 10pc or 20pc in the coming months.


In part this is because, like equity markets, house prices usually tend to overshoot in a crash. There is every chance shares drop back beneath their recent lows in the coming months as it transpires that there is more bad news in store for the world economy. But in part it derives from a fundamental fear that this housing crash is not like every other.

The problem, according to a range of economists surveyed by The Daily Telegraph, is that the rise in house prices in recent years was due less to supply and demand fundamentals − the famous mismatch between the paucity of new homes being built and the glut of people wanting to buy − than to the cheap availability of mortgages. If, as some suspect, this credit super-boom will be followed by a long-term drought, whether because banks simply do not recover fully or because the Government imposes new regulations on lending, the implication may be that house prices simply never recover.

/ more: http://www.telegraph.co.uk/finance/economi...-rise-soon.html

== ==

House prices 'could fall by further 55 per cent' (Numis Securities):

"“Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view.”

The report warns that “city centre flats” and “new executive homes” are likely to record the biggest reductions and describes investing in buy-to-let property as a “poor man’s hedge fund”."

"The Numis report says: “The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.”

[littledavesab]

Hi, has the time/date of GEI conf call 3 been decided yet?