With all the flats (sorry “apartments”) going up in the centre of Manchester over the last few years I’ve been predicting a price crash for a while now. It may now be happening, with a 15-20% drop in values in the last year, according to one property firm. I still don’t have enough money to buy one of the newly cheapened properties, so I’m not going to investigate any further than the MEN story about it. But I know a man who might, and I’ll see if he wants to give deeper analysis.
“But I know a man who might, and I’ll see if he wants to give deeper analysis.” Is that what you meant when you mentioned the story briefly to me this morning?
I’ve been saying for a while that there is (or soon will be) an over-supply of flats in the city centre and that a price crash is immanent.
In addition to the over-supply, the after-effects of the credit crunch mean that there is a reduction in demand as borrowers find it harder to get money.
Both of these factors have been well documented over the past few months – MEN seems to have missed the boat slightly – the BBC ran a story a while ago suggesting that nearly a quarter of the apartments in Beetham’s Tower were up for sale and before that, manchesteronline had an article about a two bed apartment in the centre for under 130k.
I would expect that talk of house price drops will soon become a self-fulfilling prophecy as sellers sit and wait for prices to fall and buyers become ever more desperate to get out.
It would also follow that rents will become cheaper – it is a competitive market and if one person has managed to buy somewhere cheap and can therefore afford cheaper rents, other landlords may have little choice but to follow. Unless they decide to pocket the difference of course.