Prime London Property Prices |
Have you noticed how almost everything gets cheaper?
Mobile phones, computers, washing machines, cars.
There are occasional spikes in prices but over time, pretty much everything gets cheaper (especially in inflation adjusted terms)… except for property prices which keep going up dramatically.
There are several reasons why property prices confound economists and city analysts, but that is not the focus for today. What I wanted to highlight is the unbelievably rapid pace of technological progress.
This is from Peter Diamandis:
“Here’s a historical example to illustrate the power (and accuracy) of Moore’s Law. In 1971, Intel came out with its first commercial product, a 4-bit CPU called the Intel 4004 integrated circuit. The 4004 had 2,300 transistors with a gate length of 10,000 nanometers, and computer power of about 740 KHz.
By this time, each transistor cost about $1, on average.
Today, the cost of a single transistor is about 1 billion times less than it was in the 1970s, and you can fit a staggering number of them on a single chip. For example, in 2022 NVIDIA released its RTX 4090 graphic processing unit (GPU), which consists of 76 billion transistors. And that’s not even the most powerful chip on the market. Apple’s M1 Ultra boasts an incredible 114 billion transistors.
In just 50 years, the technology experienced a 100-billion-fold improvement, right on schedule for Moore’s Law.
Here’s a quote from Moore himself I absolutely love that captures the significance of this trend:
“If the auto industry advanced as rapidly as the semiconductor industry, a Rolls Royce would get half a million miles per gallon, and it would be cheaper to throw it away than to park it.”
The next few decades will see extraordinary change at an ever-increasing rate including transportation with flying autonomous taxis and sub-orbital travel. The question is: “How will this affect property prices in Prime Central London and other global cities”?
Most of the answers you will read in the press will be hopelessly wrong.
The problem is that most people who comment in the press lead far more interesting lives than me, so haven’t studied what drives property prices. And the forces that do move property prices are far more powerful than “the headline of the day” – whatever that may be.
But if they don’t know the underlying forces – which have been well documented by the likes of Fred Harrison and Philip Anderson – how can they possibly make price predictions that are nothing more than a knee-jerk reaction to a passing event rather than the underlying forces that have driven property prices since the reign of Henry VIII.
There are some notable exceptions, but much of what you will read in the press in the coming months, i.e. property forecasts for 2024 and beyond, are not worth the paper on which they are written.
Which is not dissimilar to the relentless forecasts of recession we had for 2023!
If you would like to discover more, you can start by requesting a complimentary copy of my book, The Insider’s Guide To Acquiring £1m to £100m Property in London, which will give you a massive advantage over the estate agents, sellers and other buyers in the market.