Reply to: House prices have dropped by over 50%!!!

[AtW]

the Localism Bill actively encourages property developers to openly bribe parishes with cash for "community projects" as a payoff for the development.

Well, better the community will get a "bribe" rather than some councillors.

[AtW]

Apparently a lot of soldiers/contractors in Iraq are loading up on the Dinar

Fools.

If I was a soldier in Iraq I'd be loading up on extra ammo.

[centurian]

I'm not sure this really changes anything. Locals have always been able to object to planning applications. Which means that building new houses is mostly impossible anyway. The only ones allowed are the big developers with a decent supply of brown envelopes to the local authority. Same as before really.

And that's what properly developers are already saying. That even as things stand - everyone always says "no" anyway. Any more "power to the people" and "mostly impossible" will become "almost completely impossible"

The rule changes mean that the brown envelopes can become nice clear ones instead as the Localism Bill actively encourages property developers to openly bribe parishes with cash for "community projects" as a payoff for the development.

The problem for the property developers is that it is then put to a local referendum as to whether the development can proceed. Now the original plans called for 90% approval - which will be nigh on impossible no matter how much of a bribe is offered - might just as well ban all housing development outright. But even a 50% will be tough - there will be a hard core of "no" activists, whereas the rest may be quite indifferent.

On the whole, I think we're going to see significantly few houses being built - cue another bubble.

[Freamon]

An explosive housing market there for sure...

Investment into Iraq seems to be the next accident waiting to happen. Apparently a lot of soldiers/contractors in Iraq are loading up on the Dinar, expecting the govt to revalue it upwards. There are even investment forums on the web dedicated to speculating in Iraqi Dinar and other Iraqi investments, some of them are pretty high traffic now.

[AtW]

Iraq! (look at what 150k gets you in Mosul !, WHAT A BARGAIN!)

An explosive housing market there for sure...

[monobrow]

So let me just get the chain of events right here:

1) brits can't afford to buy houses
2) house prices collapse

Is that right?

nah, you've missed a few key points

1) Brits can't afford to buy anything
2) Somebody much cleverer than me works out how to package debt in such a way to make money out of selling it on. In a game of pass the parcel that never stops with no downside (until September 2008 that is)
3) Debt is so cheap, everyone borrows!, my hamster gets 25k credit card from MBNA!
4) Mortgage companies pass on the love, house prices skyrocket
5) Your local postie earning 25k a year has 500k of mortgages including 5 buy to lets
6) Ohh, is a bubble forming in the UK?
7) I know, lets buy a property in spain!
8) Cyprus, Croatia, Iraq! (look at what 150k gets you in Mosul !, WHAT A BARGAIN!)
9) Bubble bursts? boo hoo, those naughty bankers cheated me out of my life savings and now i'm in negative equity. lets stop their bonus'. lets riot etc
10) I know, lets do the same thing again!

something like that, got bored towards the end but you get my drift i'm sure

[AtW]

that has caused housing in spain to be unaffordable for brits

So let me just get the chain of events right here:

1) brits can't afford to buy houses
2) house prices collapse

Is that right?

[monobrow]

It's price in euros that's dropped numpty!!!

actually, I think you'll find it's because the pound has weakened and the euro (to name but one) has significantly strengthed that has caused housing in spain to be unaffordable for brits and hence the knock on effect. I read a stat somewhere that 70% of all property transactions in spain were done by brits, so yes you could argue the pound "dropping" was a factor in this.

couple that with historically high interest rates in spain, the global recession (blah blah blah) & here we go, perfect storm.

Fear & Greed, gotta love em.

[AtW]

So where do you recommend I buy a holiday villa then?

Ask DimPrawn, he is an expert in villas - he had one in Cyprus, very cheap apparently - one of those "good deals" you can find in disputed territories with Turkey

[MarillionFan]

It's price in euros that's dropped numpty!!!

So where do you recommend I buy a holiday villa then?

[AtW]

I think the theme there is that the pound has dropped.

It's price in euros that's dropped numpty!!!

[Sysman]

The Spanish market has collapsed since 2007, with prices of new coastal homes and older houses in inland "white villages" popular with British buyers plummeting 50% or more.

...

Barbara Wood, a buying agent acting for Britons, bought a seven-bedroom home in the tourist hotspot of Ronda; it was advertised at €1.5m (£1.25m) but the seller accepted €850,000. An Estepona villa had a €750,000 price tag but went for €485,000.

She says: "Discounts of 20% are way too little. Few sellers have the guts to advertise an asking price close to what they actually take, so buyers have to wade through masses of property with daft asking prices."

British developer Taylor Wimpey reports business has been better in 2010 than in 2009, but the firm still has flats at Puerto Pollenca on Mallorca, originally priced at €467,000, that are on sale for €215,000. Spanish developers have similar offers. British eco-property website Greenmoves.com has a three-bedroom country house at Castellón near the Costa Azahar, boasting solar power and an orange grove, reduced from €124,000 to just €90,000.

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So house prices dropped by over 50% in Spain, with nice climate, pools etc - WTF is so fundamental that holds up house prices in this country?

I think the theme there is that the pound has dropped.

[OwlHoot]

What, you think a Somali refugee thinks along the lines of: "well I was going to seek asylum in Britain but I've heard they're not building many houses over there anymore so I'd better go somewhere else"??

Perhaps not, but the Government has more of an incentive to curb the trend if housing is in short supply and thus more expensive.

[Freamon]

Quite right too I say - If they could build new properties by the million then the immigration floodgates would really open. So as well as saving the countryside, these so-called NIMBYs some people scoff at are helping keep immigration in check (much to the irritation of politicians of all shades - they all want to let in millions of would-be gratitude voters).

What, you think a Somali refugee thinks along the lines of: "well I was going to seek asylum in Britain but I've heard they're not building many houses over there anymore so I'd better go somewhere else"??

[OwlHoot]

By introducing their NIMBY's charter which means people can (i.e. will) veto new house builds in their area. Their fluffy manifesto language says they want to ensure that new houses are built where they are welcome - which is basically nowhere, because no-one wants new houses built around them as it devalues their own homes (increased supply etc.).

Quite right too I say - If they could build new properties by the million then the immigration floodgates would really open. So as well as saving the countryside, these so-called NIMBYs some people scoff at are helping keep immigration in check (much to the irritation of politicians of all shades - they all want to let in millions of would-be gratitude voters).