2009 - the year house prices defied gravity

There are some interesting statistics in this Times article published today about the UK property market.

It was the disaster that never happened. The picture at the end of 2008 appeared bleak: property prices had plunged by more than 14 per cent, hastened by the collapse of Lehman Brothers in September, and almost every market commentator forecast Armageddon for 2009.

The article reports that house prices fell (but not dramatically) and have risen again in most areas. Yet still one agent in six had to close their doors due to lack of business.

It's worth reading the whole article especially the last paragraph which caused me to spit out my croissant at the breakfast table:

This month the Nationwide consumer confidence index found that 84 per cent of the public believed that the economic situation would be the same or better in six months’ time. In contrast, many agents suspect that 2009 has been too good to be true.


84% of the general public think that the economic situation would be the same or better in six months time.

As a Spurs supporter since the age of six, I have had to inject my life with a particular brand of blind optimism which defies reality.....it now looks as though this has rubbed off onto the citizens of the UK.

Let's hope they're right.

www.cognacproperty.com

Christmas in Cognac - just plug & play

There is a report in our local paper, the Charente Libre, this week about christmas festivities in the town of Cognac.

As well as the usual wooden cabins, mulled wines and frosty window displays it says that on Saturday we can take the girls through to the town centre so they can "chat live to Father Christmas via satellite".

Technology eh.

Next thing we know the lazy old blighter will be sat at the North Pole, playing on his Wii, while entirely outsourcing christmas to Amazon.

www.cognacproperty.com

French house prices in 2010

It's that time of year again when all the agents, banks, building societies and public bodies make predictions for UK house prices in 2010. Even the BBC are getting in on the act.

Here in France the price of ones house doesn't hold the same kind of compulsive fascination as it does across the channel.  Houses are somewhere that you live and watch your family grow up in.  The French move house far less regularly than us Brits (I have a vague notion that on average we move 16 times in our lifetime but please don't accept that as gospel) and aren't used to seeing it's value bob up and down like a yo-yo.

If there's one thing I've learned during my twenty odd years in the property industry it's that it is an absolute lottery predicting house prices.  All of the august bodies mentioned above have teams of highly paid researchers that crunch the numbers, analyse the statistics and then make a wild guess while adding in all kinds of caveats.

At the start of 2009 almost everyone predicted a year of double digit percentage falls in price. Yet, if the HM Revenue & Customs are to be believed house completions rose from 41,000 in January to 90,000 in October.

The Nationwide say that if prices remain unchanged this month that they will have increased 6% throughout the year. Many other lenders tell a similar story with the Halifax saying that prices are now up for the 5th month in a row.

It's a different story over here in France and the FNAIM are saying that average prices are likely to have dropped by around 5% this year. You can read their latest statement here.

At a local level I'd say that this seems pretty bullish indeed.

Sure, window prices don't seem to have changed much when you trawl around the estate agents, but if you pluck up courage to go through the door and chat to them about actual sale prices you get a different picture and a lot of anecdotal evidence of double digit falls.

It's incredibly difficult to get a clear picture here where real data is so hard to come by.  What is clear is that overseas buyers are scarce and it was they who tended to pay the premium prices.

Locals are still buying houses and while transaction numbers are down the underlying market remains pretty healthy and will be so in 2010 again I'm sure.

What nobody knows is whether the overseas buyers will be back in force next year. If not then prices will remain pretty stable but if they do come back then be prepared for some increases again.

For these buyers to re-enter the market they will need confidence that the world economy is not going to nose dive again and that we're coming out of recession not heading back into it again. Confidence means everything when it comes to buying houses and although it seems to be returning it won't take much to knock it back.

Ultimately the most prudent prediction for house prices in 2009 came from the Council of Mortgage Lenders.  They simply said that it was too difficult to call the market and they refused to get involved.

Guess what.....they're saying the same thing about 2010.

www.cognacproperty.com

Uh oh....why the next banking crisis could be even worse

Just read this in today's Money Week.

As you may have gathered from previous posts I spent most of my "A" level classes trying (and sadly failing) to woo the scrumptious Denise Knox rather than listening to the wise words of my English & Economics teachers.

This is probably the reason why I simply can't get my head around the strategy of the UK simply spending it's way out of trouble. Indeed, my very first post on this blog was about that subject.

Money Week have this to say.....

The more you look at the numbers, the scarier it gets. Fifteen European banks now have assets - and liabilities, too, although bankers don't like phrasing it that way - larger than their home economies. That compares with ten such lenders three years ago. In Britain, for example, Barclays' balance sheet alone is bigger than the country's entire annual output.


and leaves us with this sobering opinion....

But one price move does make sense. It's an old MoneyWeek chorus, but the more you look at the threat of another bank blowout, the more the latest gold price rise – 28% since the start of September – makes sense. Even at over $1,200, it's still not too late to buy. No doubt there will be plenty of corrections along the way (Gold's still looking good), but the current gold bull market is a long way from ending.


Sorry to highlight such negative thoughts but it's enough to get me planning a big extension to my potager*  in 2010.

www.cognacproperty.com

* vegetable garden

Google confirm move into UK property market

Regular readers will realise that I truly think we're on the cusp of a "big bang" in the way we buy & sell property.

This morning's report in the Daily Telegraph says that Google have been in talks with UK agents about a free listings service they are thinking of launching. That shouldn't be too surprising if you've read this or this.

Shares in Rightmove have dropped 10% even though Google refuse to confirm or deny anything. This was the reaction from the Rightmove camp:

Ed Williams, managing director of Rightmove, said: "We provide visibility of brand and logo. Agents are spending money on raising brand awareness, not getting more properties online."


Now, forgive me but I'd have thought that agents don't just spend millions of pounds with him to raise "brand awareness" but do so to generate leads & income.

The crucial thing for all parties (Google, agents & property portals) is to look at things through the eyes of the buyer.

Follow the money and it's the buyer who has it.

They control the board and the companies who realise this will become the "King" & "Queen" while those who don't understand will be consigned to being humble pawns.

www.cognacproperty.com

Fancy a week-end away - try Bordeaux Christmas market

Bordeaux is a wonderful city at any time of year but it comes into its own at Christmas.

The architecture is stunning, the pedestrianised shopping centre is buzzing and the modern tram system makes getting around a pleasure.

The Christmas market is perfectly positioned in the centre of town and has 104 wooden chalets offering every kind of gift conceivable.

There are plenty of fantastic restaurants (the local plonk isn't too bad) and you should be able to get a great deal on a hotel room.  Here are a couple of hotels I'd recommend:

1. Splashing out: Try the "Regent Grand" . It's a majestic hotel opposite the opera house and looks simply sensational when it's lit up by the Christmas lights.

2. On a budget: : Just around the corner is the three star "Hotel Seze Medoc".  It's a small, family run, hotel with friendly staff.  It certainly isn't grand but it's in the perfect position and double rooms are only  €60 a night.

The Christmas market is open seven days a week, 10.00am - 8.00pm (10.00pm on Fridays & Saturdays), full information is available from http://www.bordeaux-tourisme.com/

www.cognacproperty.com

BBCi player in France

It's one of lifes constant irritants that I can't access BBCi player over here, nor get Radio 5 live online.

Now I read that UK Telecom are offering to solve this with their broadband package, you can read a review from the team at FrenchEntrée here.

I have to say that it's pretty tempting and would love to hear from any expats that have switched to this service. 

Having altered my France Telecom/Orange package twice in the last 12 months I'd hate to start the process again unless I really have to.

Dealing with their call centre has to rank as the real lowlight of 2009 (and that's in a year when the "Butcher of Segonzac" gave me root canal treatment without an anaesthetic).

If you've switched to the UK Telecom offer please do let me know what you think by mailing me directly on cognac.property@gmail.com.

www.cognacproperty.com