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Amazing real estate bubble in London
The one-bedroom cooperative apartments close to Hyde Park from London, and purely decorative high ceilings and a balcony as a selling point.

price of only 150 million U.S. dollars. The price seems high, especially for such a land lease expired in terms of real estate you have nothing.

If looking for a bigger house, you can look at this city's twin duplex apartments, priced at $ 3,300,000. If you're willing to look at ordinary residential area, you can not so fashionable in the south bank of the River Thames to find a modern three-bedroom apartments, there is a real balcony, to see the river, priced at $ 4,000,000.

list of these properties look like three years ago, back in the unreal, dizzying times, are like Lehman Brothers (Lehman), the sub-prime and American International Group (AIG) of the tragedy are still did not happen, then everyone is Furen or about to become rich, not fried apartments, is to manage hedge funds and asset prices seems the only direction is up, up,[link widoczny dla zalogowanych], up.

but it is now housing prices, they contain an ominous message: London may be the largest ever real estate bubble has not burst.

If history, the bubble will eventually burst. Bubble burst at the appropriate time usually, and then plummeted, do not think that there will be any different, you have heard today rationalize,[link widoczny dla zalogowanych], Florida in 2005 and 1988 is already commonplace in Tokyo.

London real estate market actually began to bounce back from nine months ago. UK mortgage giant, according to the Housing Mortgage Association (Nationwide Building Society) data show that house prices now than in 2007 only about 9% below the peak. Including the expanding suburbs included, the average price of 436,000 dollars of residential London. This is even more than the 2006 bubble in the late Shihai high. In the fashion of the central city, that is, as described in this article begins with the location of housing, housing is astronomical.

Overall, UK house prices fell only when compared with the peak about 12%. In contrast, if the family income, the housing bubble than the previous peak in 1989 when the prices even higher.

This is about everyone, including those who never go to the UK, as well as in the real estate market, there is no direct interest, because it is currently hanging in the head of the United States and the world economy One big question: \Large recession end? We are now slowly returned to normal economic growth, rising asset prices on the road yet? Is now located in the center of the hurricane?

No one knows the exact answer. (I do not know, but at least I dared to admit.), But London house prices is one of the most worrying omen: the crisis is not over, there are lots of bad news will follow. Simply that the other shoe has not fallen.

Boston wealth management firm GMO, Chairman, Grantham from the UK (Jeremy Grantham) that Britain's housing bubble could be from Japan 20 years ago one of the largest since the housing bubble. It is noteworthy that the Japanese bubble burst, housing prices have dropped from 1991 in 2005. Last year, fell. During this period, many false signs of recovery. Slump in the early years, many people think that the most depressed time has passed, but the real damage to pour in, prices continue to decline, year after year.

Englishman will tell you that London is unique. Indeed. But every city is unique.

a wealth manager explained to me this week, the London real estate market is a now function as the global financial self-service laundry: the house was all tycoons from Russia and the Middle East, and eager to want your money transferred out of their own country sold out. So what? High prices is high prices. Lose money on high-end residential in London is not lost to a corrupt government than strong.

heat on hedge funds, high prices also played a role in fueling. This new trend seems to come back. If so, this is a worrying thing. Thing we need is another wave of speculative stocks.

But if house prices in London and the uniqueness of Yin Lundun rising economy, so in a way and vice versa. To the city of your anger, every step seems to be big money. One night I came out from the taxi to dig all over the pocket to pay the fare before, I was thinking, how can I support here for so many years.

answer is, I can not, though my income is very good. But I'm in my apartment and the money is the objective ─ ─ 1997 and 2003, doubled the value of my apartment. By 2005, two years after that I sell, the price had almost doubled. Without the bright spot of real estate, the London by ordinary people, countless bars, restaurants and theaters will be boring a lot of cities formed.

this same time,[link widoczny dla zalogowanych], the British Government and the large expenditure in a large number of loans to prevent economic contraction. Last year government bonds rose for five consecutive years, more than 60% of GDP. According to official data, as the current economic activity as a sign of the average wage of public sector employees than the private sector about the wages of similar employees about a fifth of Duo.

market of course, huge expenses for the British worried about the long-term effects. UK government bonds is the default security costs double bonds of Germany or France.

But if you only look at real estate prices,[link widoczny dla zalogowanych], you will never know the situation.

Brett Arends

(Editor's note: The author is Brett Arends, \decision.)