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Over in the US, the New York Times reports that ‘Large investment firms have spent billions of dollars over the last year buying homes in some of the nation’s most depressed markets. The influx has been so great, and the resulting price gains so big, that ordinary buyers are feeling squeezed out.’ There are many pundits who think – hope – that the same may be about to happen in Spain and that this will be the turnaround trigger.
For example, we note one story – of many – that ‘A planned sale by Sareb, the Spanish state-organised bad bank, of a portfolio of property homes, mostly in the regions of Andalucia and Valencia, has attracted interest from a host of private equity buyers. These are understood to include the US funds Apollo, Lone Star and Blackstone. It seems like the moment when it starts to happen. The flow of deals has been zero so far, but this should be the opening of the doors for a lot of transactions.’ We are familiar with agents and others who whistle loudly in the dark but there is a growing sense that there may be some big sales coming.
In London, we note that Mayor Boris Johnson sets out that, as the population will reach 10 million by 2030, 400,000 new homes are needed in the next 10 years. Is it going to happen? Hard to see.
Helen Evans, chief executive of the Network Housing Group, one of the largest housing associations in London, calls it well, ‘Affordability in London is no longer just an issue for the unemployed or minimum wage workers, it is a problem for the majority of young professionals and working families who are dealing with house prices rising at 3 to 4 per cent annually but pay packets in London shrinking by 3.9 per cent over the last five years.’
Supply-demand-price – you cannot beat the basic economic principles; over at London Property Alerts we’re looking at the 16 hottest locations over the next five to 10 years. Sign up to London Property Alerts to find out more.
We cover down under locations; Australia is very popular. Peter Koulizos, property lecturer and author, aka thepropertyprofessor.com.au, makes some interesting points about hotspotting. Let’s quote. ‘I have sourced data from the ABS to help determine how each of the capital city markets has performed in the five years from March 2008 to March 2013. Sydney – 15.1 per cent. Melbourne – 16.1 per cent. Brisbane – 0.0 per cent. Adelaide – 5.3 per cent. Perth – 6.4 per cent. Hobart – 3.2 per cent. Canberra – 15.0 per cent. Darwin – 40.7 per cent.’
‘However, this doesn’t mean that every suburb within these capital cities have performed poorly. I have used data from RP Data to compile the list below which highlights just a few suburbs from each of the five major capital cities which have performed relatively well over this five year period. Sydney (15.1 per cent). Arncliffe – 35.3 per cent. Campsie – 34.8 per cent. Ashfield – 31.4 per cent. Marrickville – 31.0 per cent. Can you see a common theme in these outperforming suburbs? It’s their location. All of the suburbs above are relatively close to facilities (CBD) or near water (beach or river). Suburbs in these types of locations (especially those close to the CBD) tend to do well in almost any market as this is where the demand for property, relative to supply, is the greatest.’ Good advice.
All for now. See you over the weekend with the latest property introductions.