Property Recycling Share Discussion Threads

[screamer] 12/5/2004 15:48

I reckon there is another (barely mentioned) factor preventing the imminent onset of a 'correction' in the property market i.e. inherited wealth. Think about it, all the people who dived in to the property market in the early eighties under "right to buy" schemes are now (sorry to be a tad morbid) beginning to die off. The effect of this is that insurance policies are paying out and properties are being inherited by offsprings etc etc. So a lot of Mr & Mrs Averages now also have mum & dads or granny Averages property proceeds (or shares of) to put down as deposits. Just a thought.

Screamer

[enochthenocker] 06/5/2004 13:03

I go to Holland and Germany occasionaly and outside of the big cities domestic rents seem quite low in relation to house prices. However, that's just a gut feeling, I've no real data to prove or disprove it. So, I wonder, does anyone know the yields from domestic property in the more advanced Northern European countries?

[energyi] 06/5/2004 07:17

Historical Parallels?

We are forever being told that today's housing market bears little resemblance to the one that precipitated the last crash. But in an influential report published in April 1989, the economists Mike Fleming and Joe Nellis criticised the "obsession" with the house price to income ratio, noting that "there are good reasons for arguing that this historic norm may no longer be applicable in today's economy".

They focused instead on alternative measurements that "give a better picture of the affordability of home ownership". Such measures, they concluded, had not been "unduly damaged" despite rising prices.

Two months later house prices began to fall. They didn't start climbing again until July 1995.

[kbass] 27/4/2004 01:31

nah, 5.2% gross does not appeal.

[itsourpete] 26/4/2004 21:37

£600 - No - now £650

£90k - No now £150k

8% gross? Who cares when you look at the above figures!!!!

Pete

[energyi] 25/4/2004 06:39

"Rentals yields are £600 / month for a £90k house -
thats 8% gross and in a desirable area"

STILL SEEING that?

[energyi] 01/3/2004 16:28

If you want to catch the top:
1) watch volume: a higher high on LOW volume is bearish
2) try to buy Puts, if they exist



Today's volume: higher than prior day, with new High on close.
Give it another day or two, I would suggest

[energyi] 23/2/2004 17:49

Bubble-Loania is the new name for London

[energyi] 23/2/2004 17:47

I'M LICKING MY CHOPS...
"with thousands of new landlords chasing a static supply of tenants".

BUYERS wondering where all the houses have gone will find an answer in the latest buy-to-let figures. They have gone to landlords, every one.
Buy-to-let lending has soared from £24 billion to £39 billion in the past 12 months, as landlord numbers have gone up 48 per cent. The total number of buy-to-let loans now tops 400,000, compared with 275,000 a year ago.

And it shows no sign of slowing down. A report published this week by the specialist buy-to-let lender Paragon Mortgages shows that landlords plan to grow their portfolios by 9 per cent this year - the equivalent of one extra property per landlord surveyed

...MORE: (kingfish - 21 Feb'04 - 18:02 - 20496)

[energyi] 08/1/2004 15:54

Watch Wimpey too


Here's Bovis

[bumpy dog [new]] 08/1/2004 12:57

AFX today:
LONDON (AFX) - Abbey PLC said it is confident of a satisfactory outcome for
the year as it posted first-half operating profits of 28.39 mln eur, up from
20.42 mln.

The group reported a pretax profit of 28.81 mln eur against a 21.18 mln
profit a year earlier as group turnover rose to 91.5 mln from 87.2 mln. It
declared an interim dividend of 10 cents a share compared with 7.5 cents.

Its housebuilding division completed 354 sales during the period with a
turnover of 81.52 mln eur, generating an operating profit of 26.17 mln eur.
The division is on course for significantly more sales in the second half,
it said.

[bumpy dog [new]] 07/1/2004 12:54

AFX news today:
Bovis Homes meanwhile, took on a penny to 454 after the housebuilder
reiterated that it is in a good position to deliver another set of positive
results in 2004. Cumulative reservations are over 10 pct ahead of the
comparative position in 2003, it said.

[bumpy dog [new]] 06/1/2004 19:54

Today's AFX Mkt Roundup:

And housebuilders were weak today, running in to some profit-taking ahead of
the Bank of England's interest rate decision due on Thursday, although few
commentators expect any change in UK monetary policy.

Bovis Homes -- expected to issue a trading update tomorrow -- shed 14 pence
at 453, while Redrow lost 11-1/2 pence at 323-3/4, Persimmon fell back 15-3/4
pence at 513-1/2, and Berkeley Group gave up 22 pence at 856

[energyi] 31/12/2003 11:09

Want to see WMPY over 400P before shorting

[enochthenocker] 31/12/2003 10:56

If the dollar continues its swift decent against the Euro then Europe will have little option but to cut its own rates. That will stop any imminent rise in UK rates and possibly even force us to reduce. Looks like the Fed aren't going to blink at the fall in this high rollers poker game and they'll force our hands. In this scenario not only will property not fall but it's odds on that it'll rise.

[energyi] 31/12/2003 10:49

TWOD ticked over old highs & gave it back...

[energyi] 30/12/2003 16:58

SURE, Sure... "It's Different this time..." ?

"But the CEBR argues that just because house prices have crashed in the past, does not mean they will crash again. It says the last market collapse in the 1990s was caused by the combination of soaring interest rates and high unemployment.

CEBR economist Andrij Haluska said: 'At the moment we can see either one or the other happening. It's extremely unlikely they will both come together.'

He says with interest rates so low, people can still afford to keep paying their mortgages - even if the size of the debt in relation to their income is getting bigger."

WHAT HIS NOT TALKING ABOUT is...
That Disposable income is falling as Taxes rise,
and Events happen (influencing oil prices, for example) , which can
BLOWAWAY his comforting assumptions. They usually do

[energyi] 30/12/2003 16:56

House prices 'on the precipice'
Stephanie Bentley, Daily Mail ... 30 December 2003

OLD on to your hats, homeowners. House prices are going to fall next year. So says City think-tank Capital Economics, which challenges the views of the big building societies and housebuilders.

Capital Economics thinks the property price balloon is about to burst. It predicts that prices are going to crash 20% from their peak over the next three years.

The slump will start in the middle of next year. By the final quarter of 2004, prices will be down 2% on the same three months of this year.

Nonsense, says the Centre for Economics and Business Research consultancy. It cannot see what will trigger a slump and sides with building societies the Nationwide and the Halifax, predicting house price inflation of nearer 8% or 9% next year.

...MORE:

[energyi] 26/12/2003 11:29

GOLD vs. PROPERTY
(excerpt):
Description of the Problem
The move into real estate and (non-PM) stocks may seem to many PM investors like a trivial (and enjoyable) problem to be dealt with at leisure once PMs skyrocket. However, if fiat currency is collapsing, the traditional unit of account will be useless too. For example, if your PM holdings cost $50,000 and have risen to $500,000, is it a good time to buy a rental property that has fallen from $200,000 to $100,000? How about if the property has instead risen to $400,000? (It is not at all clear whether and to what extent a deflationary collapse in prices will be preceded by a hyperinflationary blow-off.) How is the psychology of your decision-making process affected if your $200 of weekly groceries now cost $400, and a tank of gas is $500? (Smaller consumer essentials are likely to rise under either asset price inflation or deflation merely as a result of financially disrupted supply networks.)

Is it therefore advisable to sit back and wait until real estate prices have stabilized before making purchases? No, because the opportunity may be less than you imagine. Allow me to explain. Unless you are already wealthy, you are holding PMs with the hope of radically improving your lifestyle. In concrete terms this usually means obtaining financial freedom - not having to work at a job you dislike. The supremacy of fiat currency stands in your way. However, the death of fiat currency may not occur in one stroke. Consider the following scenario: gold spikes to $2,500 per ounce, followed by the President announcing that the dollar is to be backed 10% by gold. This announcement might come the morning after the nationalization of all US gold mines and all foreign and domestic gold held in US banks.

My calculations indicate that a $2,500 gold price would be sufficient to achieve a 10% backing of a $1.3 trillion M1 money supply.3
...
Valuing a Small Rental Property Using Historical Ratios
A logical starting point for projecting the value of property after a fiat collapse is to look at what prices were just before the beginning of modern fiat currency. Several famous dates come to mind, but I think the best date to use is 1913 (the year the Federal Reserve was created).
...
Real estate will always sell at a premium or discount to the national average, depending on location. One could likely determine the local adjustment ratio based on today's prices, as such a ratio would remain unchanged in all but the most extreme post-fiat scenarios. As well, if fiat currency doesn't vanish all at once, valuing a property in silver still has use as a second check on the property's fiat dollar price.
...
If we know the average gross rent, the typical ratio of net rent, and the expected (or required) rate of return, we should be able to arrive at a market value for a typical rental property. Based on my research, average annual rent in 1909 was $55 per year (40 oz Ag), 50% of this was net profit to landlords after all expenses, depreciation etc., and the return on their investment would likely have been around 6%. This suggests that the typical rental property would sell for 333 oz Ag under normal market conditions.

How does this compare to today's prices? Many readers of this website would agree that today's real estate is overvalued. According to official statistics I've seen reported (secondhand), in 2002 the average house in the United States sold for $158,000 (31,600 oz Ag, at $5.00/oz Ag). The average house today is likely larger and more luxurious than the average rental property in 1909, but probably not by a factor of 90 - or even 9. Let's take a closer look at how I arrived at my input values.

...MORE:

NOTE:
333 oz. x $410 / $1.76 = £77,573
versus Ave.UK Prop.=£ 130,000 (could fall by 40%?, or Gold rise by 67.5%)

[niggle] 20/12/2003 02:25

zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

[bumpy dog [new]] 03/12/2003 12:44

AFX News:

Housebuilders were higher as well today, with Bovis Homes standing out, up
11-1/2 pence at 455 after Citigroup Smith Barney hiked its rating all the way to
'buy' from 'sell'.

[energyi] 02/12/2003 14:33

Short KGN at 330P.

[energyi] 02/12/2003 13:01

Well done, Royce.

I think the Renting Bears will have the last laugh.
Ive been waiting for the moment to short the Property Index,
and it may be very soon