House Prices in UK to rise 30% in 5 Years According to Rightmove

Average house prices in England and Wales are set to increase by 30% in the next five years, with the national forecast reinforcing the north/south divide.

See this article from Rightmove. 

The new forecast comes from a collaboration between the UK’s number one property website Rightmove and leading economic forecaster Oxford Economics. It is the most comprehensive house price forecast of its kind ever created, based on property and economic data rather than opinion and short-term market factors. It takes into account both asking and sold prices, surveyor valuations and analytics from the Oxford Economics’ Global, Industry and Regional forecasting models.

The regional forecasts are as follows, with London growing on average by 32.5%.

The five fastest performing areas versus the five slowest performing areas.

Benign Economic Environment Assumed
Of course, these forecasts assume a benign economic environment.  Do not forget that while UK's growth prospects look good, a lot of risks and uncertainties exist.  How would the global economy pan out in the next five years, is not certain.

Impact of upcoming General Election
The UK General Election is also due in 2015.  Again, it is not clear which Party would win, the polls are too close to call.

Don't Buy Blindly
Remember, this bullish prediction is all about averages.  Don't rush in to buy blindly.  In fact, we have not bought anything in London for quite some time now.  There are potential deals and we are looking, however, we have observed that prices are quite high, especially the new-builds that are marketed to overseas.

All that said, it is still good to hear that the market is generally bullish with regard to UK property prices.

Thanks for reading.

London Asking Prices Still On The Rise (May 2014)

There is some data to indicate that prices in Prime Central London are tapering off. But what about the rest of London? According to latest data from Rightmove, these prices are still heading northwards. New seller's asking prices up by average of 3.6% in May.

Annual Change Since May 2008
The next chart shows you the annual change in average asking price since May 2008. Greater London has powered ahead relative to the rest of England and Wales. No wonder that commentators say the UK is 2-country market, London and the rest.

Regional Differences
Let us take a look at the various London regions and their asking prices. Greater London stands out for its high prices, followed by the South East. Maybe there are better opportunities in other regions. I had looked at Liverpool in another blog post but that didn't me too excited. Time to look at other major cities perhaps.

Now let's focus on London. Here are top 5 and bottom 5 where asking prices are concerned. Right on top was Haringey, that is quite surprising. At the other extreme, Greenwich fared the worst. But there is plenty of new builds coming up in Greenwich, so I expect prices to go up.

London Boroughs
Let's look at London by boroughs. At one glance, you can get a good feel which are the more expensive areas.  Right on to is Kensington and Chelsea.  At the bottom - Barking and Dagenham.

Take note that Rightmove data is asking prices, which is different from the actual transacted price. 

Rightmove claims that their website advertises 90% of all homes for sale via estate agents in UK and they get 80 million visits a month.

Happy investing!

Singapore Property Prices Coming Down?

According to this article "Private home prices fall in all districts" (Straits Times 26 April 2014), prices have come down 1.3% in 2014 Q1.  Private home prices fell across the island, the first time in nearly 5 years, with the biggest drop in the city fringe (areas like Bishan & Queenstown).

Glut of Unsold Units
Out of total supply of 80,261 private homes under construction at the end of March, slightly more than 1/3 or 29,482, were still unsold.   This 80,261 number excludes the Executive Condos. After adding the supply of 13,691 EC units in the pipeline, the total number is 93,952 units in the pipeline.  Further, another 11,042 units would soon be added to the pipeline.  This brings the total to 105,000 EC plus private units in the pipeline.  All these exclude HDB.

Also note that Minister Khaw Boon Wan has blogged about ECs.  He said that the take-up rate for ECs has been high and supply has been ramped up to meet demand.  He will continue to ensure that EC scheme stay on track.

The above statistics are from the URA Release of 1st Quarter 2014 real estate statistics - the press release can be found here. (dated 25 April 2014, worth a read)

City fringe was hard hit because developers were offering sweeteners and discounts to move units.

A closer look at the chart - which way is it headed?

Some More Charts from URA Press Release

Residential Price Index by Type - since 1997 Q1 (4Q 98 = 100)

Property Price Index by Type of Property since 1997 Q1 - (4Q 98 = 100)

House Hunting
As shared in my About Us page, we currently live in HDB and we do not own any other property in Singapore.  Looking at our investment portfolio, we are aware that we are under-invested in Singapore. But, is this the correct time to buy?

We have visited a couple of units in recent weeks.  Just today, we visited a few condominiums.

For instance, we saw a couple of units at Southhaven II, a freehold condo, at Hindehe Walk, very near Bukit Timah hill.   The place was pleasant and well kept, however, asking prices were $1.7Mil for a 1,800 sq feet unit unit and $1.6Mil for a 1,600 unit.

Well, we are not prepared to pay these prices.  Maintenance charges were $360/month and we were told that those units could rent out for about $4,000.  The estate agent told us that 40% to 50% of the units were rented out.

Well, we don't feel very inspired to move after viewing the units at these prices.  Oh well, that's just us.

Fundamental Demand and Supply Issues 
We see new units sprouting up everywhere.  Government has greatly stepped up HDB supply.  Just within a 500M radius of our HDB flat alone, we have at least 5 X 35-40 storey blocks being built at a breakneck speed, plus another 4 X 35 storey 99-year leasehold development being built.

Tall HDB Towers

Should You Sell Now? 
In my next blog post, I discuss this issue.  So many homes coming up!

There has also been a sharp drop in new home loans.  Check out this recent blog post. 

I found an article by CNBC from Sep 2013 where the analyst (Barclays Bank) predicted that Singapore home prices could be headed for a 20% correction by 2015.  Time will tell.

Channelnewsasia article (27 Apr) on property developers pulling out stops to boost sales.

Research Report by Property Firm HSR - 50 Projects with less than 50% sold.

Happy Investing!!

Important Disclaimer - . The views contained in this blog and blog post are entirely mine. We cannot be made responsible for any investment decisions you may, or may not, take. Nothing in this blog can be construed as professional investment advice, as we are NOT professional investors and we are ill qualified to give you any advice.  Read the blog at YOUR own risk

5 Signs The London Property Bubble Is Reaching Unsustainable Proportions

A thought-provoking blog article by Mr Ed Conway, the Economics Editor of Sky News.

His article is worth a read, though I don't entirely agree with his analysis.

I just put his main bullet points here, including the chart under point 2 which shows that prices across London have indeed shot up tremendously in the past few months.

1. Prices are rising very fast

2. Prices rises are no longer just in “prime” areas

3. Prices are still high in real terms

4. House prices vs earnings are at historic highs

5. Mortgage burden hardly dropped in London

Happy investing!