|
|
Post by smrutib on May 10, 2016 9:34:08 GMT
When I started at PP earlier this year, there were hardly any discounts to be found on the secondary market. The few that would come up (3-4%) would get snapped up immediately. But the scenario seems to have changed completely over the past 2 months. We are seeing consistently steep discounts (> 8%) on many properties.
Any idea why that's the case?
- Has PP brought too many properties to the market (relative to their investor base)?
- Are investors fleeing the platform?
- Are people expecting a market correction?
- Something else?
Thanks
|
|
ben
Posts: 2,020 
Likes: 589
|
Post by ben on May 10, 2016 9:41:36 GMT
When I started at PP earlier this year, there were hardly any discounts to be found on the secondary market. The few that would come up (3-4%) would get snapped up immediately. But the scenario seems to have changed completely over the past 2 months. We are seeing consistently steep discounts (> 8%) on many properties. Any idea why that's the case? - Has PP brought too many properties to the market (relative to their investor base)? - Are investors fleeing the platform? - Are people expecting a market correction? - Something else? Thanks I think the first option may be part of it aslo a lot of people buy the property when it is brought at a discount (ie 15% below or whatever it is) and when the property is revalued a few months later at current value try to sell, so it might show a discount on current value but it is still more then they payed for it. Although why you would buy once the property has been revalued I have no idea as with the cost of investing that would pretty much wipe out any profits you may make in the first year and although the property may increase over the next few years doubtful it will increase 10% a year
|
|
|
|
Post by george on May 10, 2016 11:55:01 GMT
I'm going to speculate it's partly (1) too.
But I think there's another effect too. The steep discounts became a regular thing on the secondary market once the first wave of multi-unit geared properties hit their first quarterly revaluation. These property types tend to have drastic uplifts in their value at this point. I suspect large proportions of these properties were bought by people hoping to flip them to get a 3 month 10-15% profit after that first revaluation, and now we are seeing the insufficient buyer demand on the secondary market for all those flippers trying to get their cash out in a hurry leading to steep discounts.
Personally, I wish PP would do a few more small single unit ungeared properties like the used to do the the whole first 9 months or so of 2015. I'm really getting sick of the large scale geared properties that seem to have taken over of late.
|
|
|
|
Post by george on May 10, 2016 15:56:18 GMT
Is it just me, or have PP just removed the ability to sort properties by share price discount percentage, as well as any indication of the nominal share valuation and the associated discount/premium at the secondary market price from the properties page?
Seems like they might be getting worried about the effect the discounts are having on the platform as a whole...
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on May 10, 2016 19:20:36 GMT
Is it just me, or have PP just removed the ability to sort properties by share price discount percentage, as well as any indication of the nominal share valuation and the associated discount/premium at the secondary market price from the properties page? Seems like they might be getting worried about the effect the discounts are having on the platform as a whole... Not just you, I am new to this site, still waiting for my transfer to clear (slowest of any platform I have used for a while). Earlier today the default sort order was by discount and now it isn't and that isn't an option. Worse the front page doesn't even display the discount. Very strange. I am interested in the discounts. I transferred money to invest in some of those with discounts. If I have to click on every one of the 51 listed properties to find the discounts I wont be bothering, I will be testing the speed of transferring the money back again.
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on May 10, 2016 19:42:38 GMT
/Don't know why they have removed the discount bit from the search. Who cares about searching by HPI?
The reason for the steep discounts is that there is currently negative sentiment in the property market. New properties are taking longer to fill as well as secondary market properties.
I am hoping for some huge discounts as think a lot of people will not have invested with any long term thought in mind, and will panic when they can't sell.
|
|
|
|
Post by Financial Thing on May 11, 2016 13:23:07 GMT
Is it just me, or have PP just removed the ability to sort properties by share price discount percentage, as well as any indication of the nominal share valuation and the associated discount/premium at the secondary market price from the properties page? Seems like they might be getting worried about the effect the discounts are having on the platform as a whole... Obviously a naughty intentional move. Currently to a new investor the information appears as if the share prices are rising nicely so to say "hey if you invest with us, you'll see valuation increases". By hiding the discounted shares it as the current display shows more favorable investment outlooks than having discounts plastered all over the place.
|
|
|
|
Post by george on May 11, 2016 13:35:16 GMT
I am interested in the discounts. I transferred money to invest in some of those with discounts. If I have to click on every one of the 51 listed properties to find the discounts I wont be bothering, I will be testing the speed of transferring the money back again. A purely practical response to this: the current share valuation is just the current value of the property divided by 1,000,000. So it's still reasonably easy to see if they are trading at a discount/premium when scanning the property list. Although you do now have to click through to see the percentage discount unless you are incredibly good at mental arithmetic!
|
|
|
|
Post by smrutib on May 12, 2016 7:55:17 GMT
I can understand why they would remove discounts as the primary method of sorting. It presents the platform in a negative light and no one wants that.
But to remove that option completely doesn't inspire too much confidence.
|
|
bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on May 12, 2016 8:50:44 GMT
I can understand why they would remove discounts as the primary method of sorting. It presents the platform in a negative light and no one wants that. But to remove that option completely doesn't inspire too much confidence. I called and asked them and they told me they are concerned that new investors might think that they are getting a large discount to the original price, rather than to the current valuation. (So a property is listed and very quickly valued 20% higher, someone decides to sell his original investment for a 10% profit, but this is shown as a 10% discount. Numbers are rough.)
|
|
|
|
Post by george on May 20, 2016 13:37:59 GMT
And now the "discount %" is back on the properties page, but this time it's relative to their original listing price rather than the current valuation. Interesting.
It seems to be having the effect of driving down asking prices in the secondary market. I wonder if that's what PP were trying to achieve with this, or if it's a side effect of something else.
|
|
ben
Posts: 2,020
Likes: 589
|
Post by ben on May 20, 2016 13:56:04 GMT
I guessing quite a few people complained as they though they were getting a discount on the orginal price when in reality they were not so they have done it this way so that people can see what the orginal price was and what it current price is
|
|
