It'll be fun if they put what monthly cost would be to "own" if you bought today versus what the same place would cost to rent.
(Hint - you could rent any of these gems for a fraction of the cost of owning)
I can vouch for the 1-bed in London going for a million - the place they show in Primrose is actually cheap compared to Chelsea. And rents here are relatively expensive too - still a fraction of cost of 'owning' but expensive.
That will change as thousands and thousands of bankers, traders and financiers lose their jobs these next few months, the bonuses dry up, and the easy money goes away. Rents will come down, but home prices will fall even faster.
The housing crash in England and in countries around the world will be historic. Never before will so much paper wealth have disappeared so fast.
It hath been foretold.
January 05, 2008
Forbes: A sampling of what $1 million will buy you today (gee, I wonder what they would rent for)
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7 comments:
Ha! A million bucks won't buy anything but crap anymore.
is it possible to have deflation in some asset prices such as residential and commercial real estate, and at the same time inflation in food stuff and gasoline prices?
S'funny - I'm having a conversation with some people back in the UK on another website about just this.
They're all pretty much in denial - sort of like people were here a year or two ago.
You get the usual 'Top 10 Reasons' why it will never go down with the added spin of 'but WE'RE not the US!', 'What has the American Sub-Prime Market got to do with us?'
Sigh.
is it possible to have deflation in some asset prices such as residential and commercial real estate, and at the same time inflation in food stuff and gasoline prices?
Not only is it possible, but it is likely to happen with a credit crunch. Things like RE and automobiles depend on credit. With less credit available, prices will come tumbling down. Another thing is that people can put off buying RE, automobiles and appliances so that demand can drop for years. People can rent or stay in their old house a few more years. They can drive their old car or use their old appliances a few more years. They cannot put off buying food and gas.
It's odd though, when you scroll through those cities and their million-dollar homes, it makes $500k for a 2-bed condo look like a bargain. Which it most certainly is not.
I feel like this is just another subtle way that the MSM supports the REIC, whether it is deliberate in this instance or not.
If the Boomers are expecting Gen X or Gen Y to fund their retirements by buying their dumpy properties at exorbitant prices, they've got a big surprise ahead. I think at this point,younger people will be content to just drop out of the rat race altogether, rent and live a full, happy life which doesn't involve debt and excess.
I have banker friends in London, cap rate there is 2% meanwhile GBP deposits give 5%, but property always goes up ;), they have given up timing the market as people like us have been saying SELL for 3 years now, so far we are wrong in their eyes. also $1mil isnt alot anymore in GBP, this is land of in $usd terms $4 for a small coffee at starbucks
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