Berkeley Share Discussion Threads

[malcolmmm] 04/10/2016 11:51

I think a little patience here will pay off

[r ball] 04/10/2016 09:03

Crown law has a lot to do for it as well. Would you want to invest in a country where the legal systemIs opaque and assets can be stripped from you (yes Spain I'mThinking of you and the off plan villa development on land without proper permission)

[jrphoenixw2] 04/10/2016 08:16

Also note what this wall of investment money is doing to overseas property. Since English tends to be their 1st foreign language it tends to go to English speaking countries. Canada for example, you'll have read of late what Asian money is doing to property prices there. Aus east coast, Sydney and the Gold Coast etc. London.

Each of these are seen as safe-haven, just like wearing 2 pounds of gold bling. But they demonstrate sophistication [+bragging rights], and generate an income.

So developers have chanced upon a virtuous circle. New wealth in Asia seeks a safe-haven > developers sell off-plan starting in Asia and pre-finance new developments on the cheap.

[garycook] 04/10/2016 08:08

RCT LOL.Its all about the Rights mate.If you can afford them Ha Ha Ha

[rcturner2] 04/10/2016 08:04

lol monty you made the same moronic point earlier in the thread and got shot down then

do you have everyone else on filter?

[jrphoenixw2] 04/10/2016 08:02

An element of the burgeoning middle-class wealth in Asia. When I until recently was living in South East Asia and would visit the [suburban] town centres, it would be normal to see some pop-up stand by an agent for London new-build property.

So in answer to 'who's buying?', that's clear as a bell to me, Asian middle-class wealth that considers a London/SE property as an aspirational purchase, a safe-haven asset, and something to brag about.

Think about it from their perspective. If you live somewhere that's being forced via globalisation away from [mix/match as you please>] autocracy, fascism, communism, dictatorship, closed markets, complete state control of everything - and where you fear that might return again any time soon, then what would you do with your new-found wealth? IME and roughly chronologically it's 1) buy a gold Rolex to show off to your friends 2) buy a Ferrari to show off to your friends and neighbours 3) buy a big home 4) start parking money offshore including in 1st world property. Buying such property to them, is second only in perceived safety to buying physical gold. And I take it you have some inkling of the 'thing' Asian's have for gold and the reason for it.

[montyhedge] 03/10/2016 22:26

Just get on the train to Waterloo, it's over supply of two bed, two bath apartments, thousands who is going to buy?

[jrphoenixw2] 03/10/2016 16:09

My 2c on that is that BKGs target customers are perhaps more likely to be foreigners, including discretionary foreign investors. A good amount of the latter are buying for London/South-east safe-haven status, and discretionary spending can re-direct itself very quickly. But you might conclude the Brexit vote tarnishes that safe-haven status in the near-term. If so we're going to need to see a period of future good results to fully convince those property buyers, and investors in this stock that the sky hasn't fallen in.

[markth126] 03/10/2016 15:45

Why do you think bkg are lagging behind other house builders? Bdev, tw. And psn have flown recently yet this is much flatter?

[raffles the gentleman thug] 03/10/2016 11:55

Supportive article from The Spectator, arguing the case that house building should be one of least affected industries by Brexit:

We’re in a post-Brexit building boom
The prospects for housebuilders are much brighter — but their shares still look cheap

Interest rates rocketing back to 1990s levels. Foreign investment funds fleeing for Frankfurt and Paris. The pound in free-fall, and the government slashing spending as a consequence of a collapsing economy. Foreign-born construction workers returning home in horror. Amid all this chaos, estate agents would be about as popular as Donald Trump in Mexico City, building sites would be closing down, and house sales would be less frequent than Southern Rail trains.

Yes, if you rewind to the beginning of summer, that was the consensus on what would happen to the building industry if the electorate was crazy enough to vote to leave the EU on 23 June. And yet, like so many of the cataclysmic Brexit warnings, events have not unfolded that way. In fact, it is now becoming clear that bricks and mortar will be one of the sectors that does best from the Brexit boom. Why? Because house prices will keep rising, planning restrictions should be eased, the government will boost spending, and on the labour supply aside, the industry will be one of the least affected by exclusion from the EU single market.

In the immediate aftermath of the referendum result, the view in the market was that construction, and housebuilding in particular, was doomed. Companies in the sector lost up to 40 per cent of their value, wiping £8 billion off businesses that included well-known names such as Taylor Wimpey, Persimmon, Barratt and Berkeley. It was always a bit hard to work out the logic of that sell-off: it looked more as if the market had just decided to trash someone, and builders happened to be the most convenient target.
Insofar as anyone could make sense of it, investors seemed worried about the warning from former chancellor George Osborne, dark overlord of Project Fear, that house prices would fall by 10 to 20 per cent in the event of a Leave vote.

If that had happened, it would indeed have spread carnage throughout the sector. Building a house takes a long time, and if its value is going down with every day the bricklayers and roofers are working on it, and if buyers are holding off because they think prices will be cheaper next month, then the economics of the industry are grim. Fortunately, however, that proved no more accurate than all the other predictions of imminent disaster. House prices have sailed on upwards much as they were doing before the vote — that is to say, up a bit, but not dangerously fast.

After the dust has settled, the outlook for housebuilders, and the construction industry more -generally, now looks a lot brighter. There are five reasons why:

First, while there may yet be damaging long-term consequences from leaving the EU, in the short term it has given the economy a boost. The Bank of -England has cut interest rates and relaunched quantitative easing, while the market’s sharp devaluation of the pound has helped exporters. Lower interest rates and a faster-growing economy should feed through quickly into healthier house prices — and those are the most critical factor in keeping the sector -buoyant. Even if the economy does flag next year, which is what most pundits still expect, it would be no surprise if the Bank and the government pumped money directly into the building industry, as they did with the Help to Buy scheme in the last recession.

Second, expect to see more infrastructure projects launched. In the wake of Brexit, the government has abandoned its target of balancing the books by the end of this parliament. We’ll see what chancellor Philip Hammond comes up with in his Autumn Statement, but it looks likely that he will ramp up spending, especially if it counts as investment. Expect the go-ahead for some headline-grabbing new projects, from a decision at last on London’s new airport runway to an upgrading of our creaking power network. Again, that will be a huge boost for the big construction firms.

Third, the labour supply will keep flowing. As we all know, Eastern Europeans have come over to Britain in their hundreds of thousands to work in the -building trade. Overall, 12 per cent of workers in the UK -industry are foreign-born. If that was suddenly cut off, the industry really would suffer. No one, including the government, has any clear idea what Brexit will look like yet , but even if free movement of European workers is ended, it now looks likely to be replaced by a work-permit system. So it’s highly unlikely that the supply of skilled construction workers will -suddenly dry up.

Fourth, the Leave vote has persuaded the political establishment that a huge segment of the electorate is fundamentally unhappy with the status quo. A big part of that is the slow-motion housing crisis. Homes have become increasingly unaffordable, while near-zero interest rates and the QE boost to asset prices are making the problem worse.

Right now, demand massively outstrips supply: we build about 150,000 houses a year, but need at least 220,000 to keep pace with a rising population and new household formation. If net immigration comes down as a result of Brexit — a big if — then it still won’t mean we have an excess of housing supply. The main bottleneck is a thicket of planning laws and regulations that hinder new building. Most of it has nothing to do with the EU, but leaving could still be the -catalyst for ripping up the red tape. If so, building would be a fast-growing industry again.

Finally, it will soon be clear that the construction industry is one of the most detached from the EU. Building, which accounts for almost 8 per cent of Britain’s GDP, is the second least internationally traded sector— the only one with less international involvement, rather obviously, being government. Nobody exports houses or roads. Nor are its supply chains bound up with the EU: most building materials are manufactured in the country where they are used, because cross-border transport costs are too high.

Many manufacturers will certainly notice the -difference if we leave the Single Market, but few builders will. They don’t sell anything in Europe, and they don’t buy much from Europe either.

Indeed, since the referendum, the sector’s results have all been positive. Barratt chief executive David Thomas said, on releasing results in September, that simply ending uncertainty has helped improve its performance. Its pre-tax profits were up 21 per cent year-on-year. Redrow reported profits up 23 per cent. Berkeley said sales of some new homes had been deferred ahead of the vote but had caught up since, and that the impact had been minimal.

That confidence is reflected in share prices. -Redrow has recovered from its post-referendum low of 294p to slightly more than 400p. Barratt has bounced from 388p to 488p. The same is true across the sector. But they are mostly still significantly down on where they were on 22 June. That looks crazy. There is no logical reason why the builders should be worse off once we are out of the EU — and plenty of reasons for thinking they might well do considerably better.

[zho] 02/10/2016 11:10

Couple of interesting articles (imho):

A huge new wave of Chinese investment in overseas housing may be about to flow into the global market.



Meanwhile, over in Canada …

Vancouver charges an extra 15% to any overseas investor buying property there. The short-term impact on house prices has been startling – but will it last?

[malcolmmm] 30/9/2016 16:32

Over a 5% swing from lows today Whew, hopefully the tide has turned.
Hope no one shorted today.

[raffles the gentleman thug] 30/9/2016 15:16

Brilliant timing catswhiskas ... I am going to start following your posts cos your the pessimistic tone of your message market the best buying opportunity of the day !!!

[malcolmmm] 30/9/2016 14:02

Buy the dips

[catswhiskas] 30/9/2016 12:48

We really need something positive right now to stop the rot as this and tw are turning into right piles of horse dung 🐴

[raffles the gentleman thug] 30/9/2016 11:29

Yep .. over 40% of Persimmon's sales are Help to Buy related vs. practically zero for Berkeley. But its month end and the market unprepared to work this out.

Conservative party conference supposed to be starting this weekend, so be interesting to hear their views ..

[malcolmmm] 30/9/2016 11:01

Persimmon is doing pretty well and they are more reliant on help to buy schemes. very nice yield here bought some more for my pension fund. Have noted another rating this morning.

Shares of Berkeley Group Holdings PLC (LON:BKG) have earned a consensus rating of “Hold” from the fourteen research firms that are currently covering the stock. Two investment analysts have rated the stock with a sell recommendation, four have assigned a hold recommendation and eight have assigned a buy recommendation to the company. The average 1-year price objective among analysts that have issued a report on the stock in the last year is GBX 3,406.46 ($44.46).

[malcolmmm] 30/9/2016 10:43

Other help-to-buy schemes will continue until 2020, including the five-year, interest-free equity loans available for up to 20% of the property price when a buyer has raised their own 5% for a deposit. However, that scheme is only available for new-build homes

[montyhedge] 30/9/2016 10:28

Now impossible for first time buyers.

[panic investor] 29/9/2016 16:03

slightly !

[arja] 29/9/2016 11:43

so what happened today to knock the building stocks ? A bad news announcement maybe ?

[jrphoenixw2] 28/9/2016 08:35

That's BREXIT uncertainty + ramped up SDLT + developers sitting on their land-banks rather than building.

Significant dates coming up:
Government Autumn Statement [SDLT implications?] 23-Nov
'Half year results for the six months ending 31 October 2016 will be issued on Friday, 2-Dec 2016.'

[raffles the gentleman thug] 28/9/2016 06:15

Interesting article in FT this morning re developers shifting toward the building of smaller and less expensive flats in Central London, to counteract falling demand for luxury flats brought on by stamp duty rises.

The remarkable statistic is that the number of new homes in Central London has dropped by 58% over the first half of 2016, compared with the second half of 2015 - from 8,760 down to just 3,670.

[w1ndjammer] 27/9/2016 12:43

bought 2 lots this morning 2516 nice divi

WJ.