Tuesday, 13 January 2009
The Rich, The Euro and The Assets
"Luxury home values in central London fell in 2008 by the most in more than three decades as the worst banking crisis since World War I decimated demand from the city's financial professionals.
The average value of a house or apartment in London's nine most expensive neighborhoods fell almost 17 percent last year, according to Knight Frank LLP, which tracks prices dating back to 1976"
From a Euro perspective, the UK housing price have lost about 50% of their value in 6 months. 20% in housing price and another 30% in currency as the pound has been somehow devalued.
Regarding currencies, the "English" or even the "Russians" are now out of the equation in maintaining rising price as their currency lost about 30% in a matter of just few months. In reality European assets (Housing, Stocks, Bonds etc...) are too expensive relative to the US, UK and co. So either asset price will have to readjust or currency to plummet to see foreign demand coming back.