Reply to: Doomed

[BlasterBates]

Well that's true of quite a few areas. But there are certain global hotspots which have rich buyers of ALL nationalities including local nationals who would invest in second homes there.
London is exactly such a place.
In a global recession of course prices would fall, but if you're paying cash, you can sit it out till the next boom.

aha, but prices have already dropped in London.

[tim123]

Hah. He doesn't half post a pile of tulipe

Actually he has a point.

It's because people don't do that that we get boom and bust. When they see a falling market they all start to sell so that they don't get stuck with a valueless item, this itself creates an even faster fall. If everyone sat tight and only the forced sellers sold then the market wouldn't fall so far.

OTHO the opposite is what created the boom in the first place. Even in the current market, there are still people who think "I have to buy a house at whatever cost" for no other reason than "because it will be more expensive to buy next year" even though, (a) they can't actually afford to buy a house but more importantly (b) the total cost of renting over a liftime is (currently) lower than buying.

The lemmings will never learn, so when prices do start to drop a little, we are bound to have a crash (whatever that nice Kirsty woman says).

tim

[sasguru]

Well that's true of quite a few areas. But there are certain global hotspots which have rich buyers of ALL nationalities including local nationals who would invest in second homes there.
London is exactly such a place.
In a global recession of course prices would fall, but if you're paying cash, you can sit it out till the next boom.

Hah. He doesn't half post a pile of tulipe

[tim123]

Well that's true of quite a few areas. But there are certain global hotspots which have rich buyers of ALL nationalities including local nationals who would invest in second homes there.
London is exactly such a place.
.

I agree, but cute places in East Europe usually aren't in this category

[sasguru]

No, the Germans and Dutch are just as bad.



But you still need a sucession of willing buyers to sustain a price level. The local's don't earn enough to buy at these levels, so as soon as the foreigners stop investing in an area the price tanks.

tim

Well that's true of quite a few areas. But there are certain global hotspots which have rich buyers of ALL nationalities including local nationals who would invest in second homes there.
London is exactly such a place.
In a global recession of course prices would fall, but if you're paying cash, you can sit it out till the next boom.

[tim123]

Anyone would think that Brits are the only people with money to spend in the world .

No, the Germans and Dutch are just as bad.

There are many reasons why you may invest in a currently underpriced area:

(1) the area is of outstanding, relatively undeveloped natural beauty within a short flight of mainland Europe (Dalmation coast)
(2) or an underpriced capital city in an important country (Berlin)
(3) or in an emerging economy that is also a tourist hotspot and local millionaires playground (Goa)

etc. etc.

And there are many reasons to invest, capital growth, rental income or simply to have a holiday pad. And it depends if you are looking for short, medium or long term returns.

But you still need a sucession of willing buyers to sustain a price level. The local's don't earn enough to buy at these levels, so as soon as the foreigners stop investing in an area the price tanks.

tim

[sasguru]

Of course, just watch some of the hotspots going off the boil damned quickly, leaving you with a £200K log cabin in the arse end of Europe.

He who dares, Rodders!

[DimPrawn]

Anyone would think that Brits are the only people with money to spend in the world
There are many reasons why you may invest in a currently underpriced area:

(1) the area is of outstanding, relatively undeveloped natural beauty within a short flight of mainland Europe (Dalmation coast)
(2) or an underpriced capital city in an important country (Berlin)
(3) or in an emerging economy that is also a tourist hotspot and local millionaires playground (Goa)

etc. etc.

And there are many reasons to invest, capital growth, rental income or simply to have a holiday pad. And it depends if you are looking for short, medium or long term returns.

Of course, just watch some of the hotspots going off the boil damned quickly, leaving you with a £200K log cabin in the arse end of Europe.

[sasguru]

And you think that will help you?

The boom in house prices in many areas abroad has been caused by Brits (and others) seeing house prices in their own country rocket, looking to invest elsewhere, either because they can't afford to buy at home or to invest even more.

I really don't believe that the stupid prices paid for, e.g. skiing apartments in Bulgaria, that are 30 times what the locals can afford to pay, will stick when the Brits (etc) stop buying there.

Tim

Anyone would think that Brits are the only people with money to spend in the world
There are many reasons why you may invest in a currently underpriced area:

(1) the area is of outstanding, relatively undeveloped natural beauty within a short flight of mainland Europe (Dalmation coast)
(2) or an underpriced capital city in an important country (Berlin)
(3) or in an emerging economy that is also a tourist hotspot and local millionaires playground (Goa)

etc. etc.

And there are many reasons to invest, capital growth, rental income or simply to have a holiday pad. And it depends if you are looking for short, medium or long term returns.

[Francko]

Eastern Europe? I keep hearing about cheap property in Romania. Or one of those commie countries.

Nahh mate, latvian prices have already started to go down and soon will be for Estonia and Lithuania. Did you know that to get a decent small flat in the center of Vilnius you need at least 200.000 pounds? That doesn't seem in line with an average salary of less than 500 quid each.

[tim123]

Aye. Although I have invested in property abroad.

And you think that will help you?

The boom in house prices in many areas abroad has been caused by Brits (and others) seeing house prices in their own country rocket, looking to invest elsewhere, either because they can't afford to buy at home or to invest even more.

I really don't believe that the stupid prices paid for, e.g. skiing apartments in Bulgaria, that are 30 times what the locals can afford to pay, will stick when the Brits (etc) stop buying there.

Tim

[DimPrawn]

The problem with these "so called" property hotspots abroad is that the prices are only being pushed up by the speculative rush to get into the market.

You try selling up with a fat profit further down the line when everyone realises there is no real demand outside of the speculators desire to get into the market.

Easy to buy, hard to sell on.

[wendigo100]

Eastern Europe? I keep hearing about cheap property in Romania. Or one of those commie countries.

[Clippy]

Nah there are 4 countries you should not touch with a barge pole: US, UK, Ireland and Spain.

Agreed but the US is looking good, no?

House prices tanking, strong £.

Next guess is South America.

[sasguru]

NY, NY?

Nah there are 4 countries you should not touch with a barge pole: US, UK, Ireland and Spain.