With apologies to a gangsta rapsta:New York!
Concrete cesspool nightmares are made of
There's nothing to raise house prices
You're subprime in New York!
Word up, it's the real estate posse in effect. In the past, I've argued that the volume of financial transactions in London far exceeds that in New York. This state of affairs contradicts the nauseating introduction of "Live from New York, the world's financial capital" or something to that effect that you keep hearing on CNBC. Having been epicentres of a global financial crisis, you'd naturally expect both cities to fare poorly in terms of attracting residents given how important finance is in both their economies. Among other things, this would be reflected in continuously falling home prices in the wake of the contagion since folks have less reason to live there.
Well, well, well--have I got news for you. While prices for homes in New York have indeed tumbled precipitously since the housing bubble reached it apogee stateside and show very little sign of recovery as illustrated by the Case-Shiller home price indices, things are different in London. As befits a true world capital, folks from all parts of the globe are still flocking to London in droves as evidenced by rising house prices. Aside from demonstrating a diversity of industries other than finance that still thrive, its pull remains relatively undiminished.
Yes, the qualifier that prices considered here are not inflation-adjusted, but the more desirable areas of London (like Westminster where I am, alas, only a renter and not an owner) have already surpassed their boom-period highs in nominal terms:
Resurgent London house prices are on the verge of hitting all-time highs just two years after the banking crisis threatened a "property ice age". Values across parts of the capital have sprung back from the recessionary slump astonishingly quickly and are still rising, according to agents.Call it the Abramovich Effect in honour of the splurge-worthy Russian oligarch. So while the rest of the United Kingdom may be going nowhere in particular, London is still raking in buyers the world over. If that isn't an indicator of being the world's capital, then I don't know what is. For all its foibles, and boy am I tired of them, its attractions are still strong. Remember, it too is the world's most open city as a recent study found.
The average is now three per cent off the all-time high of £352,869 recorded by the Land Registry in January 2008. Trevor Abrahamsohn of agents Glentree International said: "They don't ring a bell as you pass a previous high but if they did it would be ringing now."
In three boroughs, Kensington and Chelsea, Westminster and Camden, average prices are already above their boom-time peaks and in two others, Islington and Hammersmith & Fulham, are just a few hundred pounds adrift. Agents say more rises of five to 10% can be expected this year. In Kensington and Chelsea an increase of 10% would see the average price top the £1 million mark for the first time.
The trend has also been seen far beyond the hot-spots of central London and the banker "bonus belt". The Land Registry figures show that prices in suburban Barnet are within one per cent of their peak, Southwark two per cent and Hounslow three per cent.
Yo Jay-Z, you'd better b**ch slap New York and rap about London instead the way you've dissed the dollar in favour of euros. Unfortunately, the numbers indicate New York is as much of a dump as the rest of the hopeless, hapless United States housing market
