Quaerite Emptor! Is the London Residential Property Bubble about to Unwind and, if so, what are the Implications for Stocks?
I have been struck by a number of recent data points indicating a slowdown in the London housing market. For example, data provided by Savills (Savills Prime London index) show that prime central London residential prices actually fell in Q4 2014. To put this in perspective: price inflation, having flatlined at +0.4% m-o-m in Q2 and Q3, turned negative in Q4, with prices falling by -4.2% q-o-q, taking the price move for the year as a whole into negative territory (-1.3% y-o-y, vs +7.9% y-o-y in 2013). This, I believe, marks the first annual negative price move in prime central London property (as measured by this index at least) since 2008. Continue reading