I am trying to sell my apartment in London and I am getting a first hand view of how disfunctional the market has become. We first had a Greek cash buyer who offered the full asking price (which we thought ourselves was too high at 20% over the 2007 peak valuation) but they disappeared with no explanation. We then had an offer at our new reduced price (still 15% above the 2007 peak) which fell through yesterday on account of the person who is buying being advanced another $150,000 by her parents and hence being able to afford a better area. Life is definitely easy for some people.
We now have a new buyer at a slightly lower price who is again a cash buyer bankrolled by her family.
On the other side we are looking at a project on the market for 20% below the 2007 peak valuation which has been reduced twice. It need I am fairly sure that we will lose a bit of money, at least on paper, at some point but it is in a perfect area and near an extremely good state school so has life quality and financial advantages beyond pounds and pence. It also might be a good long term hedge against a monetary over-reaction by the BofE egged on by the next government.
I am not sure what all this means. My initial thoughts are that central London prices are at bubble levels and the lack of "normal" buyers (UK based 20% down types) is symptomatic of the lack of affordability at the bottom of the chain. I have also seen many properties which have been on and off the market a few times as deals fall through and I interpret this as a sign that the banks are unwilling or unable to close deals at these inflated levels (maybe someone has learnt a lesson or two - you can but hope). It would appear that for whatever reason that their is a high degree of instability in the market, like a liquid approaching boiling point and this cannot be a good thing.
No comments:
Post a Comment