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Auction Property

Is The Liverpool Property Market An Antibubble?

If London is in a property “bubble” then I reckon Liverpool is a property “antibubble”.

And I didn’t just make that word up – antibubbles are real!

Unlike their bouncy, floaty bubbly brothers, antibubbles are droplets of liquid surrounded by a thin film of gas (which is the opposite to a bubble which is a thin film of liquid surrounding gas).

But, the key point about an antibubble is that it is a type of bubble which can sink.

Yes, bubbles which sink!

http://www.youtube.com/watch?v=6r_8Pp9WkF0

What has this got to do with the Liverpool property market?

Well, let’s take a look at this property which is coming up for auction and which I think is a classic example of an antibubble.

liverpool flat

I know the property looks quite pretty from the outside – something about it reminds me of a ruby coloured Everton Mint.  Or maybe even a seaside stick of rock.

Unfortunately, it’s not the whole property for sale, just the top floor flat which is a one bed.

Which I guess is probably all you can expect with a guide price of £3,000.

Yes, that was £3k.

Now, back onto antibubbles.

So in 2006 this flat was bought for the princely and over inflated bubble (the proper floaty bubbly variety) price of £125k.

7 years later and the bubble has turned inside out.

Or maybe it just *popped*

Because, the floaty, bubbly bubble price has become a droopy, sinky, antibubble price…loss.

Or maybe that is what is known as a plummeting antibubble.  Or maybe just a belly flop?

Hell, it doesn’t matter what you call it – the fact is the property has gone from a price paid of £125k in 2006 to a guide price of just £3k in 2013: which is a colossal drop of 98.4%  in 7 years of ownership.

Which I reckon has got to be a property antibubble by anybody’s standards!

10 comments
  1. Ian

    It’s amazing how this can happen. £125k to £3k in 6 years just doesn’t make any kind of financial sense for anyone involved. Baffling.

  2. Simon Topple

    I drove past this today and noticed the Barnard Marcus sign. I did wonder how long it would take to appear on here!

    This is a one off and is probably a dodgy mortgage deal or transfer – cant see how,it would be worth 125k at any time in the last decade! £50k maybe, a number of years ago!

    1. Sam

      Ah Simon I was hoping you would tell me more as I know this is your patch. OK, so if we go with the £50k value some years ago – what do you reckon on the £3k guide? Have prices really dropped so much in this area?

      PS. I haven’t included ALL the cheap flats going to auction in Liverpool (£5k guides) watch out for the boards there’s a few around at the mo!

      1. Simon Topple

        I’d want to own the freehold. Wouldn’t be interested in a leasehold in that area, limited resale value on that kind of property. There will be no management company, service charges, proper common areas management. So as a long term strategy at maybe 12k as it is now (it’ll go for around that), with an aim to buy all flats in the building, I’d say go for it. On its own, no chance.

        I’d personally get the while thing and make it a large student HMO – would rent very well and probably a stupendous yield.

        1. Sam

          Yes Simon, I agree with your strategy. I have been looking into the student area around there, however I did notice an awful lot of property on the market to rent – is there enough demand for the supply that seems to be out there?

          1. Simon Topple

            Good question Sam!

            There are a number of issues I think.

            1. Over supply of city centre pod type housing. The council seems to love these,many anything with the word student in it seems to get passed. This is creating an over supply in the city centre, which is affecting areas outside the city centre.

            2. General move towards town – students want to be in town. Better areas such as Wavertree, Allerton and Mossley Hill are taking a bit of a bit. You have to compete on quality now, not price.

            3. Investors are flooding in, due to Article 4 in most other uni cities. They do a good renovation, and will do ok for 2 or 3 years but will struggle eventually. They generally don’t know the areas or their underlying weaknesses.

            It’s certainly worth a look but I’d focus on the areas as close to the city as possible.

          2. Sam

            WOW! What a fantastically insightful comment! Thanks so much for sharing your expert local knowledge, that really is helpful

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