Glasgow and the 2014 Commonwealth Games

[zoe]

Now that it's been announced that Glasgow will host the 2014 Commonwealth Games which will inevitably bring investment into and publicity for the city, is anyone here considering investing in Glaswegian residential property?

 

[MichaelDes]

Is anyone here considering investing in Glaswegian residential property?

To invest in Glasgow following its Commonwealth win is a one way loss for any type of property. Not only are prices at best stagnant with falls more likely but rents present negative cash flow at 70% mortgage cost before depreciation and white goods etc. In reality the bid contest was a against a lame third world country whose new capital replaced the more cosmopolitan Lagos [11 million]. Some property speculators in Africa would have definately gambled following Abuja winning as it had more to benefit from a positive result.

Manchester may have got a bit of a feel good factor from its time although not much but in the long run its property market ended up in a serious tail spin. The UK scene remains a dangerous market for any speculation, the downside outweighs the upside signifigantly on all factors. All the same congratulations are still in order. The event will be a success, the Glaswegians are one of the warmest, most fun crowd you could mix with.

 

[slamdunkin]

I would not invest in Glasgow following its Commonwealth win. It was a against a third world country whose new capital replaced the more cosmopolitan Lagos [11 million]. Some African property speculators definately would have gambled following Abuja winning, it had more to benefit from a positive result.

Manchester though got a bit of a feel good factor from its time, but in the long run its property ended in a tail spin. The UK scene remains a dangerous market for any speculation, the downside outweighs the upside signifigantly. All the same congratulations are still in order. The event will be a success, the Glaswegians are one of the warmest, most fun crowd you could mix with.

what?? Thats plainly nonsense - got stats to back that up?

I will definately be buying something in Glasgow - not sure which part of the East End I will be doing it in yet

 

[ringledman]

what?? Thats plainly nonsense - got stats to back that up?

I will definately be buying something in Glasgow - not sure which part of the East End I will be doing it in yet

No its not. Manchester went up after the 2002 games merely because the whole country was rising in the boom.

The games had little effect themselves on prices.

Anyway prices have done virtually nothing in Manchester since 2004. Those who bought apartments in the city centre are probably down on what they paid.

As for glasgow and the 2014 effect forget it. UK property has already started to fall.

 

[zoe]

I should add I specifically mean houses, not apartments. I wouldn't be interested in purchasing an apartment anywhere.

Glasgow house prices seem quite low. For example, they're much much cheaper than Belfast.

 

[ringledman]

I should add I specifically mean houses, not apartments. I wouldn't be interested in purchasing an apartment anywhere.

Glasgow house prices seem quite low. For example, they're much much cheaper than Belfast.

the price of a house, apartment, garage, shed whatever is irrelevant compared to the price of the equivalent elsewhere. A comparison means absolutely nothing.

Its amazing how everyone here thinks that because the price of a place is cheaper than Belfast or Dublin then that equates to good value.

What are all the economic signs saying about UK property? One thing. Its going down.

Valuations at their highest for decades against earnings. Earnings growth often less than inflation. Banks unwilling and unable to lend high multiples anymore. Bank unwilling to lend to each other for less than 6.5%. Growing reposessions. People on fixed rates from 2004 now having to remortgage and pay twice what they did before. The signs all point down.

Do you even know what the average wage is in Glasgow???

 

[zoe]

Do you even know what the average wage is in Glasgow???

This article is a year old but states

In Glasgow, costs are lower by comparison, but prices are still an average of 5.3 times salary

http://thescotsman.scotsman.com/index.cfm?id=1393922006


Whereas this Belfast Telegraph article relating to NI property states

Japanese property prices were around ten times average incomes before they burst, the sort of ratio we are nudging in Northern Ireland

[broken link removed]

 

[simon@empire]

A look at the social problems here alone gives a good indication why prices are cheap; there are high levels of unemployment and crime, but most worrying is the fact that male life expectancy in parts of the East Glasgow is 53.9 years (Calton District), which is a good indication of the poor quality of life experienced locally. That has been quoted as being 7 years less than life expectancy in Iraq. This seems unbelievable until you go there, but once you are there it's easy to see why the area has been chosen for the Commonwealth Games because this type of investment is badly needed to improve the areas and the lives of the local people.

Simon

 

[ringledman]

This article is a year old but states
http://thescotsman.scotsman.com/index.cfm?id=1393922006


Whereas this Belfast Telegraph article relating to NI property states
[broken link removed]

Sorry Zoe I didn't mean to come across in the way I did.

Here is my view on it -

The historical average UK yield on a residential property is around 7-8%.

The current UK yield is probably around 5%.

Over the long term prices always revert to their mean. So I believe that one of two things has to happen in the UK.

1) Rents rise by 40%-60% to bring the current yield in line with the average and prices rise nothing in the mean time. How likely is such a gain in rental??? It would take many years for such an increase in rents to occur in light of today's low inflation and low earnings growth.

Or,

2) Prices fall significatly to bring the yield back to its average.

Personally I think it will be a bit of both. I believe we will see a decade of rising rents with prices stagnating in nominal terms and falling in real terms.

 

[slamdunkin]

No its not. Manchester went up after the 2002 games merely because the whole country was rising in the boom.

The games had little effect themselves on prices.

Anyway prices have done virtually nothing in Manchester since 2004. Those who bought apartments in the city centre are probably down on what they paid.

As for glasgow and the 2014 effect forget it. UK property has already started to fall.

land reg postcode price index would suggest otherwise