The London Real Estate Bubble Is Back—and It's Scary
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The bubble is back: A man browses property on display at a London real estate agency.
LONDON—The one-bedroom co-op apartment is only a short walk from Hyde Park, and it boasts high ceilings and a purely decorative balcony.
Yours for a mere $1.5 million. It seems quite a high price, especially for a property whose ground lease will eventually expire, leaving you with nothing.
If you're looking for something bigger, you can get a duplex with two bedrooms in the center of town ... for $3.3 million. And if you're willing to slum it a bit and cross the River Thames to the unfashionable South Bank, you can get a modern three-bedroom apartment with a genuine balcony, and views of the river, for $4 million.
Looking at the real estate listings here is like stepping back in time to that unreal, giddy world of three years ago—before Lehman, before subprime, before AIG. Back to a period when everyone was either rich or on their way, either from flipping condos or running hedge funds, and the only direction was up.
But these prices are now, and they contain an ominous message: The London real estate bubble, arguably the biggest one of all, still hasn't popped.
