Market Trends - Property Money Business Consumer
Property Market Trends Down as Investors Continue to Profit
Anyone that has watched the news lately has seen the trend in defaulted mortgages increase. The ripple effect of such defaulted mortgages is less people buying new homes, and thus more homes sitting on the market. While many look at this as a property bubble bursting, some investors continue to thrive despite the downward trend in homeownership.
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UK Housing Market Forecast 2008

The Credit Crunch has been hitting the UK Mortgage Sector hard as many easy credit mortgage deals have been removed from the high street shelves in recent weeks. Despite central bank actions to ease financing terms and increase liquidity, this does not address the real issues of illiquid mortgage related bonds and expectations that the UK Housing Market will slump on the back of a surge in foreclosures.

UK Mortgage Banking Sector - Northern Rock On the Brink of Going Bust

For an example of the credit crunches impact on the UK mortgage banking sector , we need look no further than at Northern Rock. The mortgage banks stock price has fallen from recent highs of £12.58 to recent lows of just £6.20, a drop of more than 50%. Trading on a PE of just 7.5 and a yield of 4% may now make the stock seem enticing, but the mark down is in anticipation of the much higher risk of mortgage defaults and repossessions in the UK as the housing market starts to nose dive. These repossessions (foreclosures) are already hitting the likes of northern rock with expectations of a tripling in the rate over the next 6 months as compared with the same period last year. This surge in repossessions will impact the earnings of the UK Mortgage banks as they make every larger bad debt provisions and issue profit warnings.

This is in addition to any toxic US Sub prime related exposure. Therefore in Northern Rock's case a PE of 7.5 could jump many fold in a worse case scenario.

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Bulgarian property 'set for major price increase'

The price of property in Bulgaria could rise significantly in the next few months, local media have reported.

According to the Sofia Echo, polls by various media outlets have shown that real estate agents across the country widely expect property values to keep increasing.

Some have predicted that between now and the end of the year, the price of property in some major cities could rise by up to ten per cent.

 

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