…Even better, overlap real estate and token investment in the double dip.
Now: This month. It is the best time to invest in UK real estate, an opportunity
Now: This week. It is the best time to invest in cryptocurrency tokens, a double opportunity.
I. The dip and upward trend of UK Housing Price, an opportunity
The UK housing price had been affected by the Brexit uncertainty, with loss of demand for a period of time, the housing price temporarily lowered to a dip in the trend. This dip, however, is temporary.
Based on the long-term average housing price in London, from the graph below, we can see that there is a long-term steady upward trend of growth despite increased short term fluctuations under the influence of the Banking Crisis.
Like XRED described in the white paper, the London and UK housing price is very undervalued for the time being and will increase over time following the trend above.
According to Financial Times, Countrywide: UK’s largest real estate agency group, predicted in Aug 2016 that the growth of house price in London would experience the biggest falls, especially the most expensive ones. “Prime central London prices, which fell by 5 per cent in 2015, would fall by 6 per cent this year and stay flat in 2017 before rising by 4 per cent in 2018, it said.”
If this prediction is true, it means that the fall will be the most significant till 2017 and would pick up in 2018 and this low point would be the most cost efficient time to make an investment. Luckily, we already see an increase in the real estate data.
According to another article from Financial Times, citing Halifax. “British property prices showed signs of a pickup last month, posting their best monthly rise of the year… but still posting the worst quarterly performance in nearly five years”. Yes, 5 years and especially worsened by the uncertainty of Brexit, causing it to be a dip. Though, we can see that the previous prediction could be already taking an effect that was coming earlier than 2018. “UK house prices rose 0.4 per cent in July after a 0.9 per cent contraction in the previous month, said Halifax — the biggest climb since the end of 2016 and outstripping a forecast of 0.2 per cent growth. The average price of a British home is £219,266 according to the index.” This upward adjustment was an auspicious sign that the dip is going to belong to the past.
Bloomberg has an article supporting the upward trend: “London’s Poshest Area Leads Rebound in Home Values”. The article shows an image of the percentage increase in housing prices with red and purple having more increase and blue and teal having less increase. The article stated that “values in Kensington & Chelsea surged 24 percent in June from a year ago to an average of 1.4 million pounds ($1.8 million), according to data from the UK Land Registry data.”. The Royal Borough of Kensington and Chelsea is the smallest borough in London and the second smallest district in England. It is an inner London borough of royal status and one of the most densely populated borough in UK.
II. The dip and soaring of cryptocurrencies, the double opportunity
From the bitcoin price graph we can see that there are two dips in the bitcoin prices in the past 3 months. These dips are significant and accidental, and are unlikely to occur frequently within 3 month periods that often. Though we can foresee another future split in November, the effect is yet to know. We will discuss the second dip, the recent one, as the opportunity on top of the housing dip as the double opportunity.
The first dip was caused by SegWit. Segregated Witness, which proposed to solve problems and issues with Bitcoin, including transaction malleability and scaling. The dip was worrisome for a while. On Aug 1, bitcoin forked into two cryptocurrencies, bitcoin and bitcoin cash and the price continued soaring.
The Sept 14th dip was caused by the Chinese ban. Chinese authorities were cracking down on the domestic cryptocurrency exchanges and ICOs. The ban was causing plenty of investors to short sell and the expectation of the cryptocurrencies to be temporarily low. However, expectation of cryptocurrencies is still very high in the overall market.
On Sept 20th MarketWatch reported that Bitcoin and Ether stabilized after the dip. “A single bitcoin BTCUSD, +7.12% was worth about $3,987 on Wednesday with its market vale rising to $65.7 billion.” “Ether’s value was at $27.4 billion, compared with a recent low at about $21.6 billion last week. Across the broader digital-currency segment, the total market value of an array of cryptocoins was at $137.8 billion, with bitcoin representing about 52% of that value, Coinmarketcap data show.”
After successfully stand the two unexpected and serious dips that do not happen frequently, the Bitcoin price still increases. We are still speculating the future split in November, as the price keeps going up. Though as of now, right after the second dip, the price is still relatively low while having already been on the way of recovering.
III. Conclusion
The UK housing dip recovery + the Chinese ban dip recovery happen to create a low point for buying in cryptocurrencies that are based on real estates. Such as the cryptocurrency XRED: X Real Estate Development.
XRED is currently in the Presale stage and its ICO starts on 1st November, 2017. XRED’s fund manager will buy sites with adequate room for movement in pricing while having the investors enjoying the low property volatility of real estate. It is a safe haven for investors compared to other cryptocurrencies in the market. XRED aims at sites with inexcess of £1–3m profits, and has a built-in safety net of the profit from development, from 15–25% profit on cost and in some cases higher. This is because XRED has access to “off-market” sites due to connections and reputation from past fast and high quality performing development projects.
These off-market sites are only offered to a select few. During the interview, XRED CEO Kevin Hollands said: “Our circle of property agents is retained by the sellers for fast and genuine offers only from people with funding in place or cash ready, without a bidding war”. XRED has the benefit of being large scale with significant purchasing power compared to, a typical family purchasing real estate, thus gaining you more profit margin. For example, “if someone has 3 or 4 development sites to sell that means a lot of buyers can only bid on one. Seller would let me buy all 4 at a lesser cost. More profit for investors.” This also mean that there is a wider range of development site selection and a quick turn around for the fund and the investors. Mr. Hollands said “I have just been involved as an advisor on a 24 apartment site in Clapham London. All apartments sold off plan and just a “show apartment” originally when bought resales were at £950 sqft. They sold for £1050 sqft. This gained them an extra £2m profit on original GDV.”
XRED’s CEO Kevin Hollands has more than 30 years of experience and his company KGH has developed many quite interesting projects. Such as Apple Apartments in Baker Street, a conversion of 6000sqft of offices to 5 luxury Apartments. The Beatles used to own it in the 1960`s. It has a £10.5m GDV (Gross Development Value)
For another example, the company developed in very exclusive areas like Tavistock at Covent Garden in Central London (quite near Soho & ChinaTown), a conversion of 6000sqft of offices to 4 luxury apartments, where The CEO of Prudential bought the Penthouse Apartment for £6m. GDV of Tavistock itself was £17m.
More pictures for development projects by KGH can be found at https://www.kghconstruction.co.uk/our-projects/
Mr. Hollands predicted optimistically “Real Estate is like Bitcoin, it has its ups and downs, but in the long term, it will always rise.”
If you are interested in XRED, please visit the website here: https://xred.co
