Berkeley Share Discussion Threads

[quepassa] 12/10/2016 18:27

Seems to me that Berkeley will be entering a housing market storm imminently where economic instability will hurt upmarket housing.

Remember the 7 year property cycle.

All good things come to an end.


ALL IMO. DYOR.
QP

[jrphoenixw2] 12/10/2016 18:08

It's far better sourced than the unattributed guff from the doomsters lol

[cancun tango] 12/10/2016 16:33

Confidence won't return by PRing weak vested interest puff pieces like this.

[jrphoenixw2] 12/10/2016 10:27

From an article in today's Telegraph titled 'Signs of recovery in the buy-to-let market as Chinese investors pile in':

...'Rightmove’s head of lettings Sam Mitchell said: “Investor activity has bounced back following the stamp duty changes, though some agents report that many are looking to knock sellers down on their asking prices to make up for the additional stamp duty they now need to pay."
Meanwhile, Chinese property hunters are piling into the UK, looking for investment opportunities due to the weak sterling.
Juwai, a Chinese listings website, said that buyer inquiries on British property climbed by 12.2pc in September alone. This is 90pc higher than the same month last year.
Bernie Morris, EMEA president of Juwai.com, said: “We believe that London will remain the top destination for investment, and that it will receive increasing investment flow.
"Despite that absolute growth, we expect London’s share of total investment to decline gradually as Manchester and other cities become more successful at attracting Chinese buyers."'

[anley] 12/10/2016 10:04

I think NOT as BKG homes are all in excellent positions and with £ weakening again my City solicitors tell me that the "overseas" buyers are back in the market for quality and that is what BKG does well.

I do agree with MONTYHEDGE but BKG don't do small nasty modern apartments........

[essentialinvestor] 12/10/2016 09:59

anley is correct in so far as BKG have highlighted market uncertainty
on the last couple of statements.


They are reducing capacity and appear to have dramatically slowed down
land acquisition.

Question of whether short term you think the share price reflects this, or not.

Overseas buyers have the benefit of a significant price cut on recent GBP weakness.

[montyhedge] 12/10/2016 09:50

No they won't, reason London is saturated with apartments.

[anley] 11/10/2016 11:42

But that, in a way, was what BKG were saying months and months ago in their annual report..........do not forget that this company has for over 40 yeards read the property market really well and today the company has £3b of forward sales - no O/D - a credit limit with banks of £500m and has shut/sold sites in the last year.

London will sell to foreign buyers - its nearly 15/20% cheaper than before 23 June 2016!

[quepassa] 11/10/2016 10:04

Today's FT. Page 11. Interesting article headed: " Home Truth- Knight Frank feels impact of Brexit vote as profit dips".

A fall in earnings but this is an extract from the article which is important reading:

" Knight Frank said transactions for homes priced above £750,000 fell 20% in the post-referendum period from a year earlier, although there were signs of improvements as more potential buyers register to view homes. "

This incidental information gleaned from upmarket Knight Frank adds further tangential evidence of a swiftly cooling market for expensive properties.

We are de facto entering a period of protracted,undeniable and inevitable economic instability due to Brexit.

History has taught that buyers back off in times of economic instability and uncertainty. The extortionate hike in SDLT on expensive homes has put a further dampener on already weakening demand.

Matters will be exacerbated by City and other professionals not being entirely certain whether their employers may part-relocate to mainland Europe.

My personal view is that we are on the cusp of entering a particularly difficult period for expensive housing - whilst cheap/affordable/high density housing will be in greater demand.


ALL IMO. DYOR.
QP

[bluemango] 10/10/2016 23:54

Odey now reducing their short position, according to shorttracker. Last two updates have been reductions/buy backs, and in fairly quick succession.

[jfk69] 10/10/2016 20:43

I was also looking at site earlier, in particular at how many were reserved/sold for the future developments. Not as many as I would have hoped. I have also noticed a marked increase in advertising via banner ads for their properties of late.

Telegraph

"The shares may look cheap, trading on eight times forecast earnings, but for cyclical shares we prefer to use a cyclically adjusted ten-year average of earnings. In which case the shares are trading on a not-so-cheap 20 times average earnings."

[quepassa] 10/10/2016 19:09

RCT.

All I can say is try this please:-


Go to the Berkeley website.

1. Hit the RED SEARCH button.

2. Just using the moving price bar and no other filters, do two searches

a) Properties zero to £500k
b) Properties £500k to £5m+



Search a) produces a result of "17 developments and 111 properties" and seach b) produces a result of "39 developments and 284 properties".

Try it for yourself. It only takes 20 seconds to do.

From these two results, it baffles me that average selling prices could be £500k.

From their own search criteria , many, many, many more properties and developments feature higher than £500k.

Once you have done this, I'd be interested to hear your insights on the £500k figure. Because for me, it doesn't figure!

Moreover when you set the slide-bar on £1m to £5m, I still get very large numbers thrown back at me of 27 developments and 174 properties.

Seems like they may currently have not insignificant inventories of £1million plus properties at a time when SDLT is negatively impacting the market.

Please let me know your thoughts.



Thanks.

QP




ps just to be completely thorough, their website shows:

£0-£250k 3 developments and 11 propoerties
£250-500k 16 and 100
£500k- £750m 19 and 65
£750 - £1m 19 and 47
£1m-£2m 23 and 115
£2m - £5m+ 18 and 61


in total, they are currently showing 111 properties at less than £500k and a whopping 288 properties more than £500k.

This would not equate to average prices of £500k.(unless perhaps the expensive properties aren't shifting)

[panic investor] 10/10/2016 18:34

Barnes - excuses ?

[value king] 10/10/2016 18:31

That little chart top right looks like a small head and shoulders since July.

[barnesian] 10/10/2016 18:19

Annual report says "The changes to the average selling price are a result of mix with
Berkeley completing two student developments in the current year, one in Bath and one in London which together comprise 638 units."

[rcturner2] 10/10/2016 18:06

QP, £500k is the average price, so if they are selling some at high prices you mention, then they are clearly selling many below that average as well. From the stats in the final results the big stuff must be a tiny part of their business, unless you are saying that they make most of their profit at the top end?

[jockthescot] 10/10/2016 17:31

sold my Mountview Estates and bought some more here in my SIPP. 5 year view with the macroeconomic situation and the shortage of houses in London and the UK as a whole, I don't think I can lose.

These may have further to go down in the short term, but they'll be way ahead in 5 years time.

Jock

[spirito] 10/10/2016 16:32

I wished I'd bought after the crash and this , although not as good is still very good .

[jrphoenixw2] 10/10/2016 15:43

I was thinking the same earlier Spirito [though at 200/2384 at time of writing that's c8.4%!]

[spirito] 10/10/2016 15:24

Divi approaching 8% time to buy more me thinks.

[rcturner2] 10/10/2016 13:07

From final results it was £515k. So I'm not sure its that big a deal as you make out.

[rcturner2] 10/10/2016 13:06

QP, what is Berkeley's average selling price? I think they are below these levels are they not?

[quepassa] 10/10/2016 13:02

As an example of the increasingly difficult market, luxury developer Octagon have been trying to flog this newbuild property for 15 months since May/July 2015.

No luck so far.

Originally marketed at £8.95million.

Now reduced to £6.95million and still no sale

www.octagon.co.uk/homes/london/highgate/the-grove


Since 2015, Osborne hiked SLDT to sky-high levels.



Under the new SLDT tax regime, tax on this £6.95million property would be as follows and it is jaw-dropping:


1. SINCLE OWNER with NO OTHER PROPERTY three-quarters of a £million: £747,750

2. If you own a second property - and let's face it, that is very likley to be the case such as a rental flat, SDLT is almost a £million : £956,250

3. If you purchase through a Company, SDLT is £956,250


These extorniate SDLT tax rates are having a seriously negative impact on the upper end of the market.


You even have to pay SDLT on a new property at the second-property rate before you may have sold your existing house/flat and then claim a refund.

Combined with Brexit worries, this is having a real dampening impact on expensive properties.

There is a demand from overseas buyers/bargain-hunters as a result of the recent sterling collapse in very, very narrow areas of the market but there is little supply as sellers are discouraged by SDLT to move.

It is a terrible market for expensive properties.

Certain new-build luxury flat developments in Central London are being down-sized ( eg instead of 10 x 3 bed flats, it is being reconfigured to 15 x 2 bed apartments) in order to attract lower budget buyers and bring properties into lower SDLT tax bands.

The market for expensive properties is being stifled whereas the contrary is true for cheap properties.

Upmarket deveopers are in for a really tough time.

ALL IMO. DYOR.
QP

[rcturner2] 10/10/2016 12:16

QP, fair enough :-)

You have called this one correctly so far.