Real Estate Update-1

Real Estate Update-1

We are halfway through the year. How are things turning out?

I said at the end of last year that I expected house prices in the UK to stay much the same, or drop about 5%. So far, that’s how things are going. I dont envisage any change over the next six months.

I said that prices in Spain would drop between 10% and 15%. Once again that is what has happened. It’s happened slightly quicker than I expected, but that pattern will continue. Those of you who read all my stuff will know that I expect the price of an average 2/3 bed flat on the Spanish coasts or the Algarve to stabilise at prices in the €60-70k zone. Anyone paying more than that is throwing money away. I have noted that prices have already dropped to €75k for two bed flats in some of the tourist destinations. We still have a way to go.

I have also suggested that there has been a change in buying habits and I expect a severe contraction in the holiday home market in Europe. I dont think the retirement home market will change, but holiday homes have become a liability rather than an asset. It’s a market that is over.

I said I had no idea how the euro situation would pan out, and I still dont know, except that I did foresee politicians hanging it out (kicking the can down the road — extend and pretend — or whatever terms you prefer). That is how things are going. How long this mucking about can go on I still dont know, maybe another year, maybe more, who knows.

One thing is clear, things are not getting better, they are getting worse.

At the end of last year there were rumblings that Italy’s largest bank was on the verge of collapse. It’s been propped up, sort of. There have been worries that France is bankrupt, and Spain is too. However you look at it the whole thing is a total mess. That is not a good basis on which to do business across frontiers, or to get involved in property dealings.

The UK is no better off. The country’s debt equals its entire annual output. That’s suicidal. The traditional view is that once the figure goes above 90% you are on the road of no return. Maybe the country can work its way out of the mess. Unfortunately, the trading partners on whom we depend are broke. You cant increase sales to people who have no money. That spells a long period of languishing economic patterns. We are dependent upon the people using that pesky currency the euro, and the euro is losing value on a daily basis. As it loses value so the UK loses export cash, and so the £ looks more and more frail. In this situation we all go down together.

Let me go back a bit. The average boom period for the UK property market is about seven years. The average hiccup period is about 2/3 years. The average full-on property crash lasts 7-10 years. This situation is worse than that, thus we are looking at more than ten years to get things back on track. At one stage I suggested 2015-2020 as a likely period for the return of a positive housing market in the UK. That’s a guess and so isn’t worth much, but if asked to guess now I would say that is looking increasingly optimistic. A return to the good times much before the end of this decade is unlikely.

Let’s have a look at some simple maths. You all know I love trying to make figures stack up.

Because of the abnormally low interest rates set by central banks across the world, savers are having a hard time. That means money is being taken out of banks and put into other areas to get better returns. That is causing bank assets to drop drastically at the same time that their securities (mainly real estate) are losing value. That means the whole banking system is on skid row.

Remember we live in a capitalist society which rests upon a solid banking system. That means our whole economic way of life is threatened. That is not an academic matter, it’s serious.

The entire developed world’s banking system and currencies are flying by the seat of their pants. Put another way, we have no security of value anywhere in the western monetary system. We are all betting blind. It’s fun late at night playing contract whist and bidding blind, but it isn’t much of a way to win tricks.

I cant possibly deal with this whole question in one short blog, so next week I shall bombard you with a whole list of frightful figures. I dont want to frighten you, but as I never tire of saying, the bad news is more important than the good news. If you have the bad news you can at least prepare yourself.


Paris -2


We were supposed to be visiting the Eiffel Tower at night so we could see it lit up. That went also for the Flame of Liberty, a copy of which became the Statue of Liberty in New York Harbour.

It’s a long time since I went up the tower, and surprisingly it seemed bigger this time round. It does look impressive with all the lights ablaze, and even more so when they flash on and off, and the crowd bursts into applause as the lights run up the metalwork.

It’s a lot of steps. And then we’d only arrived at the first balcony. To be quite honest the view isn’t much better the higher you get. Paris is largely a low level city.

It’s a lot more steps up to the second balcony. For those who are clapped out at this stage there is a lift, if you’ve previously taken the precaution of paying for it and have the requisite ticket. Good luck.

It took us over an hour to get back down again because the girls refused to use the steps, and millions of us queuing for the lift down was not fun. By the time we hit the metro the darned thing had closed so we had to flag a taxi home, and arrived back at quarter to two.

Now you know why last week’s bulletin was a bit delayed.

The bridge of locks is back close to Notre Dame.

We tried to see the Flame of Freedom the following day, but it was dreary and misty. Also, lunch was a bit disappointing because I couldn’t find a restaurant selling a meal of frog legs. Somehow a KFC isn’t quite the right alternative.

Next week I shall be back in my beloved Spain, travelling through that largely unknown area of Murcia, and getting stuck into some serious wine tasting.

Paris -1


I’ve just got back from a jaunt around Paris and the Pas de Calais. I was taking two teenage girls to see the delights of France, and they walked me off my feet.

I must admit to finding their view of life to be frighteningly different from mine. When I was a kid we made fun of the typical American tour, which maybe took in six capital cities in a week. I remember a couple of comedy sketches about that particular phenomenon.

“And there coming up on the left is Florence. That’s Florence in Italy…… Yes ma’am, we crossed over into Italy last night….. You didn’t notice? That’s because it was dark madam. And now we are heading for the capital city of Rome. Florence? Oh, that was back there. You missed it.” And so on.

It seems that’s no longer funny, that is how things are. When I was a kid we used to go to Stonehenge and the girls dressed as white witches, and we had mystic rituals on the sacred stones. Now you walk round the outside close to the barbed wire and take photographs to prove you’ve been. Stonehenge? Nowadays it’s just a photo. We used the place for its original purpose. Life has changed.

The girls had a list of things they wanted to see. I think I ought to rephrase that. They had a list of things they wanted to photograph. Rameses II, the girl without her arms, the Mona Lisa, the Eiffel Tower at night, and so on.

Armed with a metro map, I thought we should get through quite easily, but I’d forgotten just what a tangle the Paris metro is. They need a better map, and they need a better way of highlighting the interchange stops.

The Louvre has changed a bit since I was last there. We didn’t have the central Pyramid before, nor did we have a rush-hour of tourists. I remember ambling around the place having the rooms almost to myself. There certainly wasn’t another soul in the snuff-box room. I’d warned the kids that it was large so they had this list of things to photograph. That means painting was ‘done’ with la giaconda. By the way can anyone tell me what the big attraction is? I cant see it at all. It’s just a boring old bat with no eyebrows who looks as if she’s just farted at someone she doesn’t like.

Anyway, after miles of corridors and staircases we managed to cover all the essentials on the list and the requisite number of photographs was achieved while I sneaked views of some very nice cuneiform writing, some especially old and brightly coloured Egyptian artwork, and some ancient coffins. I didn’t see anything from my hero Aknaten, but then I have visited the Cairo Museum and Tel el Amarna, so no worries. But I have to admit that every time I see that amazing stuff from four or five thousand years ago I’m blown away.

Next we went across the road to the Cathedral. I was going to hire a pedal taxi but €20 to go a mile is a bit steep. He brought it down to fifteen, but I wasn’t buying that either.

Once again it was like the metro at rush hour. I cant see what the attraction is. It’s just another church with columns and a few stained glass windows, but not particularly special. The rose window was nice, but…. when you’ve seen six hundred and forty two rose windows, this one is just number six hundred and forty three.

I lost the girls, and had to sit in the cold outside the exit waiting for them to finally appear. Then we went up to Monmaitre to photograph the Moulin Rouge. The metro runs under the main road, and there are grills which give a nice updraught, and you can stand on the grill and do a Marilyn Monroe, that is if you’re wearing a dress. All the girls were wearing trousers. How boring can you get? This is bohemia. This is fun country. This is sex city. Huh, trousers!

We were too tired to climb up to the Sacre Coeur but no problem, the pictures from the road up the hill were just fine.

That’ll do for one day. Part two next weekend.