"New research provides evidence of what many Londoners have long suspected: property prices in London are only partly linked to the local economy."
In the previous post I voiced in passing my suspicion that at least part of the striking demographic shift in the USA, which finds the majority of America's poor now in the suburbs, is due to government tactics to clear out inner city neighborhoods for real estate developers.
The suspicion was grounded in part in my recollection of a conversation John Batchelor had on his radio show back in January about London property values. Here, from the schedule, are notes on the conversation. A podcast of the segment is also available.
Friday 17 January 2014 / Hour 1, Block D: Jason Karaian, qz.com (Quartz), in re: ... How does capital flow from poor to rich countries? In the case of London, it’s considered worldwide to be a safe haven; right now, esp Egyptians. Lucas Puzzle: when people in countries in turmoil look for where to park their cash, they find London to be safe: property will at least hold its value and not likely be appropriated. Whole blocks of fancy homes not even inhabited – lights on sometimes. Entered by cleaners once in a while.
Oxford study: Middle East and Russian buyers concentrate on Mayfair, Knightsbridge, the highest-end; houses passed from one tycoon to another. Southern Europe and South Asia: they go to somewhat less expensive areas and often actually live there. property bubble?? Not – hard to expand beyond the ring road, so there's not much property around on which one can expand; about half the demand is met. The average house price in London is more than $700,000.
Riots in Egypt + recessions in Greece = property boom in London. House prices in the UK rose by a pedestrian 3.5% year-over-year in November, according to the latest data—that is, if you exclude London from the calculation.
Residential property prices in London rose by 11.6%, which is down from 12% the previous month but still frothy by any definition. Including London, British house prices were up by 5.4% in November.
For some time, property prices in London have disconnected from the UK as a whole; London homes are both the most expensive and fastest appreciating in the country. The average London house is now worth £441,000 ($724,000), versus the £248,000 national average.
New research provides evidence of what many Londoners have long suspected; property prices in London are only partly linked to the local economy. Academics at Oxford’s Saïd Business School looked at transaction-level data since 1996 and cross-referenced spikes in prices to economic and political turmoil abroad.