Homeowners across the land are holding their collective breath as daily reports show the housing market threatens all out collapse. The likelihood, however, is that losses over the next year or two will not nearly be enough to reverse the huge gains of the last ten years.
But not every real estate investor is this fortunate. I've put together a list of some of the worst property investments ever. In the unluckiest or most calamitous of cases, the losses run into the millions...
A place in the sun
The brochures were too good to be true. Buyers gazed in wonder at those shimmering golf courses - yet to be built; the beautiful beaches - only a short two hour drive away; the lively restaurants and bars - now abandoned; and those glorious villas - mostly unsold.
Thousands of British ex-pats, wanting to live the dream of eating a full English on their own patio gazing out over the Mediterranean, are facing up to a Spanish property nightmare. Prices have slumped by up to 65 per cent in the last year according to some websites, as the market is struck by a country-wide collapse in house values and massive overdevelopment on the Costa Del Sol. In the most acute cases, Brits who have bought off plan are now stuck with apartments in uncompleted developments they don’t want but can’t sell.
New build city centre flats
Thousands of newly-built urban apartments have flooded the market in recent years, dominating northern city skylines, but now prices are plummeting by up to 70 per cent. New-build blocks attracted amateur buy-to-letters eager to earn a quick buck from the property boom. But now many fear they paid vastly over the odds. One report cites a three-bedroom apartment in Kelso Heights, a development near the University of Leeds campus in the centre of the town, which was recently sold for £71,000. It was bought in 2006 for £237,999. Flats in certain developments in areas such as Manchester, Newcastle and east London have also fallen in value by 40-50 per cent.
Land banking
Investors have lost thousands of pounds to “landbanking” firms in recent years. Dodgy companies buy tracts of greenbelt land, then sell chunks of it to individuals on the promise that when houses need to be built on their acres of countryside, the value of the land will soar. This will happen a couple of years after their purchase, investors are told to convince them to hand over cash. However, it isn't that easy to get rich quick. It emerged that many of the schemes fell within areas that local authorities said would never gain planning permission for new homes, or at least not in the lifetime of the devastated investors.
World's largest shopping centre
Investors in the new shopping malls opening in west London, Liverpool and Bristol over the coming year will hope the centres prove more successful than the world largest and possibly emptiest mall, in Donguan, southern China. The gigantic centre opened in 2005 and is four times the size of Bluewater, in Kent, with 6.5 million sq feet of retail space. However, the owners who sunk millions of dollars into the project have persuaded only a dozen stores to open. Still, shoppers dispirited by the lack of retailers can instead take a trip down a Venetian canal leading onto a replica St Mark’s Square, enjoy a ride on the indoor roller coaster or grab some food under a giant 80ft mock-up of the Arc de Triomphe, all added in the vain attempt to increase foot fall at the mothballed mall.
Hope you've not invested in any of the above !
You are as well investing locally, especially in the smaller Moray towns, like Lossiemouth, where prices are still stable and there's no large developments planned to take down average house costs.
Have a good weekend,
Mr Jackson.
Posts
