Monthly Archives: August 2018

Even in the United Kingdom

G’day from Gerrards Cross outside London where the market here is really nervous! Reports across all media, with some nice areas around here suffering sales rate falls as much as 65%.

I’ve spoken with 3 real estate agency principals and they are all shaking their heads.  The market is at the “impasse” stage, with “scared of losing”, stubborn sellers sitting on high listing prices, and nervous buyers, fearful of rising interest rates and of paying too much, sit on their hands.

It won’t be long before “stretched” buyers start to “meet the market” and the true correction starts.

Now the Big Names are calling it

Here we go folks.  If you have a lot of equity in your home, or you own investment properties and have built up equity….sell NOW!

Major players in the world of economic crystal balling are calling the WHOLE MARKET in an ever increasing rate of fall. We are now looking at an annualised 8+% fall in the major markets.  If major markets with attractive fundamentals (close to CBD, transport, beach, attractions, facilities) are going to take an 8+% hit per annum over the next 2 years, then outlying, marginal markets, already under mortgage stress, will take a massive pounding!

My forecast for outlying ‘Nappy land’ areas, and apartments in general, is a 20 to 25% fall by the end of 2020.

If you have an $800,000 property, it will be worth (maybe, if there are ANY ‘un-spooked’ buyers left), from $600,000 to $640,000.  Can you afford to throw two hundred thousand dollars into the street?  At $700.00 a week , that’s five and half year’s rent!

Residential property is now officially ‘on-the-nose’.  Get out!

Here it comes – and it ain’t pretty

At last, some truth.

This link from Bloomberg News 31 July 2018

This is but the tip of the iceberg.

Direct reports to me from Agents and Lenders in the marketplace are painting a far worse picture than that illustrated even by Bloomberg.

There are large areas where mortgage stress has been festering for the last couple of years.  Now we have a rising interest rate scenario combined with a rapidly falling sentiment.  Not a great combination.

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