Gladfish Corporate News

By Brett Alegre-Wood | [fa icon="calendar"] 17-Aug-2018 08:58:07

UK Property News - 17 Aug 2018

Video Transcription:  

Hey, guys. So, welcome to this week's "Property News." I'm here in Thailand's Soi Ta-iad Street, which is basically a fitness street. It's a whole street full of gyms and things like that. Just here for a couple of days, catching up with one of my mates. And yeah, basically shot...I thought I'd shoot the "Property News" from here today.

So our lead story today is all about house prices are actually...well, they've only grown 3% over the last year. Now, that's to June, okay. Now, I said 3.3% last week, which was actually the Halifax data or Nationwide data, I can't remember which one it was. Well, this is the Office of National Statistics, so this is the government figures.

Now, again, you know, these figures, we can quote all different figures depending on who we...you know, which index we use and that sort of thing. And I think the thing to realize with this is that you've got to get to the point where you start to understand this data for what it is, because a lot of the data that comes out isn't really, you know, appropriate to you.

I mean, if you're living in the West Midlands, price is driven, gone up 5.8%. If you're living in London they've gone down about 3%, you know. So, the reality is... And that's the annual rate, not just in June, by the way. So you've got to look at these figures and understand, you know when you're reading [inaudible 00:01:23] the newspaper, they are there for column inches. They're not necessarily there for you, to help you really understand what's going on in the market.

And as I always say, "Get local." You know, if you're gonna look at your data or if you're gonna look at this data, look local.

Now, the interesting thing here is, and what I'm really interested in is the trend, okay? Because if you look right now, you know, 2009, 2008, 2009, you know, we had the falls, the last recession. We're 10 years on from that now, and things are starting to get a bit shaky, and, of course, they are. Because it's a seven to ten-year cycle, and there's lots of politics that are being played out that may have driven that to be a bit longer.

But certainly, for London, you know, London actually, in some areas, is starting to bottom out, which is actually a good indicator of what's to come. So, yeah, we might not see house price growth for another year or two, but with London, you know, London will [inaudible 00:02:13] down, and don't be surprised if London bounces back, you know, once we start hearing this data and few more indices come out and that sort of thing, because that's actually what London really is about.

Now, if you're looking at Birmingham, Birmingham's buoyed up by Chinese investors, okay? So there's lots and lots of money coming in from Asia, and also the, you know, the Middle East, you know. So we've got a lot of money coming in from, you know, Dubai and the Emirates and all this sort of thing. And you're hearing this all the time about developments being bought, and development sites and new development companies backed by, you know, certain people.

And I think this key here really is, you know, these...the investment money is going to these places and that will result in those places being upgraded. And when they're upgraded, you know, they will, house prices will grow. But if you're not hearing about investment being pumped into small little towns in the, you know, nowhere, middle of nowhere, well, I wouldn't be buying there, and I'd be very careful about buying there unless you have a specific strategy that can overcome that, okay?

So I think it's key, you know, things are looking good. You know what I mean? I don't think things are bad at all. It's just the cycle, it's just the trend, you know. And I think when you understand the trend, and when you play that game, then you'll make money. So, yeah. But you won't always make money if you're playing the hold game because the reality is, you're gonna buy and hold for a long time, and when you have to do that, well, you gotta do that.

So, some good news for Birmingham, and actually, really, right now, it's all good news for Birmingham. There's lots of investment going, major investment, major disinvestment. There's lots of interest in properties there. I mean, we're getting the lowest discounts of any area in the U.K., right now from Birmingham.

Why? Because basically, it's hot. There are lots of people moving there. What the demand from, say, Chinese investors, which is, you know, this is a great article here, whereas that was London, it's now on Birmingham, okay? It may have been Manchester a couple years ago, but actually, now it's looking quite, you know, focused on Birmingham.

Manchester's still doing pretty well, you know, there's still lots of money going there, but I think, you know, we hear a lot about Birmingham being the second largest city behind London. Look, yes, they're both really...Manchester, Birmingham, they're so close, and there's so much going on. They're both fantastic places. I think either/or, you know, they're almost interchangeable. So, yeah.

The one point I will make with this is that I think we can read the news and say, "Look, Birmingham." And you go, "I'm gonna invest in Birmingham." Remember, you gotta do it for the long-term. Because if you're doing it for the short term, I don't really believe that by the time you get in, you're gonna see necessarily that capital growth. I mean, it was 5.8% year-on-year, compared to London going down half a percent, you know? So, that sort of thing.

The reality is, is look, you've gotta...if you're building for the long term, and most people buy and hold, in other words, they buy and they're holding it. So, you're not necessarily gonna hold it in the massive growth market.

So, you know, you've got to play this strategy game, where your strategy meets the market and you adapt your mark, your strategy, to meet it. And that is in the purchasing, that is in the exit strategy, and that's in the holding, you know. And when you do that, you win.

So, New Zealand house prices, what they've done now is they've brought in, basically, a ban for pretty much everyone to buy who is a non-resident. So there are some exceptions which are mainly large or apartments in large developments, but effectively, it's gonna be a full-on thing. And the interesting thing is, is they're putting these measures in place, but what they don't realize is that, you know, for instance, in June, only 3% of people that bought were foreigners.

So, you know, will it work? Look, politically, it's a good thing in terms of they will...you know, the locals will appreciate it. Will it actually result in, you know, stabilizing house prices, stopping it from growing? Not really, you know. We'll see, you know. It depends what they add it with, it depends what else happens in the market, but I don't really see it doing a huge amount apart from the politics of it.

And I think a lot of these things these days is more politics than actually, you know, policies that are really going to help.

So just want to build on that story around, you know, political decisions that are affecting the housing market across the world, and this is not just a local thing. This is all across the world. And the interesting thing is, what we're seeing more and more is that politicians are making decisions that appear to be more politically motivated than actually based in fundamentals that are actually gonna change things and really make things different and better. And so that's a real concern, you know. And, you know, yes, it's winning political votes, and yes, it's getting column inches. And I think the problem is with the media these days, is it's become far too focused on elections and being voted in and this, than actual policies that are really going to make a change.

So, sorry, guys, busy street. But, yeah. But no, and you know, that really concerns me, and it concerns me greatly in that, you know, we just need to get back to basic fundamentals and things that are really going to be sustainable in the long-term. I think that's what the problem is. Too many politicians across the world are focused on the next election, how they get voted in and what they can do to be popular.

I really don't see that, you know, some of these things they're doing just aren't gonna work. And they're gonna have a negative effect, they're gonna actually cost more money. So, you know, like a tenant fee ban. You know, "Okay, fine. We're just gonna push rents up." So rents are gonna go up more than wages. You know, that's gonna create another problem. You know, they're not really thinking things through. So, yeah.

Okay. So let's end on the wonderful Brexit. And, you know, this article today really is about Brits are very positive about... Well, actually, I won't say that. They're not very positive. But they still remain relatively positive, okay? That it's not gonna affect house prices that much. And the interesting thing is, most people I speak to, when you actually have a proper conversation rather than like a headline conversation you see in the newspaper, people are like, "You know what? It's mainly [inaudible 00:08:18]," you know. Now, that doesn't mean that things can't go wrong, okay? That doesn't mean that you know, it isn't gonna turn absolute crap. But I think the interesting thing for me is that, you know, it's not as bad as the papers are making it out. They are selling their papers, they're getting column inches, and I think that's the key. When you look at that, you know, that really is what it's about.

So I'm still mildly optimistic, you know, certainly not pessimistic about Brexit, you know. I'm almost on the fence about whether we should or should not, should have or shouldn't have, you know? Yeah, so we'll see, but I think the interesting thing is there is a lot of positivity out there still in the market. Don't believe all these negative headlines.

The fact is, we're in that cycle where house prices are trending down in some areas. They're still going up in others. Those places will slow down, and what you'll find is London will lead out as it always does, you know.

So, all right, guys, that's it for this week from Thailand. I'm gonna head off to the gym now. All right, have a great day, live with passion. And don't forget to subscribe and comment. I respond to all my comments now. So, basically get in there and ask any questions you've got and I'm happy to record a video in response to it if you need it.

All right, great. Have a good day. See ya, bye.

Topics: Investment news Brexit London Property Investment

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