Saturday, April 09, 2016

More Market Failures

Nine Elms regeneration zone
 There is a striking disjunction between the desperate shortage of affordable housing in the capital, and the extraordinary panorama of cranes, pile-drivers and high-rise residential blocks in various states of construction visible from almost anywhere in the city with a view.

Even more extraordinary, at least to someone unfamiliar with London's dysfunctional property market, is the fact that many of the newly completed apartments transforming the skyline are empty, bought off-plan by overseas investors as convenient assets in which to stash their cash. But now it appears that all is not well in the luxury homes trade.

Battersea Power Station
Last month Morgan Stanley warned that prices of new, upmarket London flats could fall by as much as 20% this year, and the International Business Times reported that Chinese investors who bought apartments off-plan in the Battersea power station development are having second thoughts now the time has come to pay the balance on their relatively small up-front deposits. Those in the know are clearly expecting trouble: although pre-tax profits at the estate agent Foxtons only fell by 3% last year, investors knocked 33% of the share price. If these are the first signs of a bursting bubble, it would be good news for anyone who thinks of four walls and a roof as home, rather than an offshore shelter for their dodgy money.

More pictures here.

Construction of Alto Apartments, Wembley