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Real Estate Briefing - Archive | July, 2008

Emerging Asia property market is still strong

Posted on 31 July 2008 by Laxman  |  Email |Print

The latest RICS (Royal Institution of Chartered Surveyors) global commercial property survey shows falling of tenant demand at a faster pace in the developed world in the second quarter of 2008. Tenant demand fell across all property sectors in the developed world. The retail market seeing the weakest tenant activities in the developed world, a pattern mirrored across most developing markets outside Emerging Asia where demand strengthened. Transaction volumes and capital values plummeted as the commercial property market suffered under financial liquidity constraints, says the RICS Global Commercial Property Survey, published today (31 July 2008).

Over 17% chartered surveyors reported a fall than a rise in tenant demand across the globe as the effect of the credit crunch deepened. The worst hit areas were North America, Australasia and Western Europe and to a lesser degree Developed Asia. In Western Europe, the net balance of surveyors reporting a fall in tenant demand fell to -27 percent from -22 in Q1, while in Australasia and North America it fell to -35.5 and -36 respectively. All sectors suffered with the retail market the most depressed area and the office sector dropping to a further low…. Full press release: Source

ING Real Estate launches global fund of funds

Posted on 31 July 2008 by Laxman  |  Email |Print

From ING Real Estate Select has announced that the London Pensions Fund Authority (LPFA) is putting up £150mln (EUR 191mln) as seed investor in the global multi-manager’s Orisis Property fund. ING Real Estate Select, the multi-manager business of ING Real Estate, said that Global Oisiris is one of the first open-ended, core balanced, global fund of funds to come to the market.

ING Real Estate Select said that the fund will invest across the global real estate markets seeking best in class funds in the unlisted sector and boutique managers who are specialists in their niche markets. The fund is open to institutional investors with a minimum investment of EUR 7.5mln and targets a net return of 8-10%.

Nick Cooper, global CEO of ING Real Estate Select, said: ‘I believe we have created a fund which will appeal to investors seeking to diversify out of their domestic real estate markets through a tax efficient structure which minimises investor administration and filing requirements. With countries around the world at different stages of their property market cycles, we are now well placed to offer investors the benefits of entering these various markets, which is something we have until now only been able to offer our clients in a segregated account format which requires a larger amount of capital.’

Property economist warns of 25-year slump

Posted on 31 July 2008 by Laxman  |  Email |Print

From A property economist warns it could take 25 years for house prices to recover from a projected 35% fall. Bearish analyst Capital Economics said house prices would fall 35% over the next three years and provided the market was stabile, prices would not reach 2007 levels until 2036.

Capital Economics said its comments reflected the property market’s overvaluation at the peak of the boom. The economists argued that even with above average house price growth, the squeeze on mortgage credit and the economic downturn will slow any recovery.

‘This is not a forecast but an illustration…it makes the point unless you rely on another unsustainable boom the climb back [to 2007 house prices] could take a very long time,’ said Ed Stansfield, property economist for Capital Economics….. Full Article: Source

US house prices suffer record falls in Case-Shiller home index

Posted on 31 July 2008 by Laxman  |  Email |Print

From The May S&P/Case-Shiller Home Price Indices are now out. Data through May 2008, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show annual declines in the prices of existing single family homes across the United States generally continued to worsen in May 2008.

For the second straight month, all 20 MSAs posted annual declines, nine of which are posting record lows and 10 of which are in double-digits. Both the 10-City Composite and the 20-City Composite are reporting record low annual declines.

Although individual cities topped at varying times, the top-10 and top-20 city composites peaked in a June-July 2006 timeframe….. Full Article: Source

Negative equity threat to 1.7 million properties

Posted on 31 July 2008 by Laxman  |  Email |Print

From The spectre of negative equity on a scale not seen since the housing crash of the early 1990s is about to haunt the nation again, with unknowable but certainly dramatic political and economic consequences.

According to research from the Standard & Poor’s credit agency, some 1.7 million homeowners – one in seven – will see the value of their home fall below the outstanding balance on their mortgage in the next year.

The gloomiest prediction circulating the City would see that number ballooning to 3.7 million households – almost one in three. Prices are already 9 per cent off their peak.

Meanwhile, and partly as a result of the widespread gloom around property, consumer confidence has fallen to lows last seen during the slump of the 1970s. Then, as now, consumers are facing steep rises in energy prices, the latest being Centrica’s announcement of a 35 per cent rise in British Gas bills, with their electricity prices up by 9 per cent….. Full Article: Source

U.K. mortgage report sees pain into 2010

Posted on 31 July 2008 by Laxman  |  Email |Print

From A key report on the U.K. mortgage-market crunch on Tuesday said it will take a couple of years for the market to normalize. The review, commissioned by the British Treasury and led by former HBOS Chief Executive James Crosby, said in its interim report that lenders will remain “severely constrained.”

“In my opinion, such a shortage of mortgage finance will persist throughout 2008, 2009 and 2010,” Mr. Crosby said in a letter to the U.K. Chancellor of the Exchequer, attached to the report.

The Bank of England reported earlier in the day that U.K. mortgage approvals fell to a record low in June and net consumer lending hit a nine-year trough. Mortgage approvals fell to 36,000, the lowest since records began in 1999….. Full Article: Source

UK overseas property investors increasing

Posted on 31 July 2008 by Laxman  |  Email |Print

From property investors who buy abroad are not put off by the rising cost of travel and are looking further afield to buy, according to a new report.

Two-thirds of second home owners with property abroad are concerned about the impact of climate changes but they are not willing to cut back on travelling to their overseas property, the survey by Savills Research and, has found.

There are currently 425,000 UK owned overseas properties, which reflects an increase of 35,000 units during 2007, with the total value of UK owned foreign property now worth £58 billion, the survey found.

Overseas property investors are not just increasing, they are also going further afield to buy. Dubai, the Far East and the Caribbean are becoming more and more popular….. Full Article: Source

Austalia: House prices are a bubble waiting to burst

Posted on 31 July 2008 by Laxman  |  Email |Print

From recession is the biggest threat to Australia’s real estate market. Are house prices going to crash in Australia as has occurred in the US? Based on West Sydney University economics professor Steve Keen’s regular Debtwatch newsletter, the answer is probably yes.

The doubling in real terms in house prices in the past decade is a bubble waiting to burst. According to Keen, the bubble is based on speculation financed by debt. Keen claims it is effectively a “Ponzi scheme” where dividends are paid out of new rounds of capital injected into the scheme instead of the non-existent profits. The scheme collapses when there are no new investors to pay the dividends….. Full Article: Source

Indian PE funds focus on realty

Posted on 31 July 2008 by Laxman  |  Email |Print

From Sectors with cheap valuations are on the radar of most private equity funds, most of whom are flush with funds. Owing to the market slowdown in the first half of the year, most PE funds did not deploy cash. Deals clinched in the last few weeks indicate that PE funds are targeting real estate, education and infrastructure companies.

Recently, Bahrain’s TAIB Bank acquired a 26 per cent stake in Anant Raj Industries. Lightspeed Ventures and Sequoia Capital invested $18 million (Rs 76.3 crore) in, followed by JP Morgan, which has picked up a 33 per cent stake in Alok Infrastructure’s Special Purpose Vehicle.

“Real estate, as a sector, has corrected a lot and probably we could see some more correction but there is no dearth of demand. Price has now become attractive for some of the good companies in the sector. One will see lots of deals going forward,” said the country head of an international PE fund. The Bombay Stock Exchange’s Realty Index has crashed more than 60 per cent this year from its peak of 13,848 as on January 8, 2008….. Full Article: Source

Behind the boom and bust of real-estate player Vesta

Posted on 31 July 2008 by Laxman  |  Email |Print

From A firm that acted as a middle man in a popular real-estate-investment strategy has closed its doors, leaving investors scrambling to recover millions and pointing to flaws in the largely unregulated industry.

The latest problems in the industry involve Vesta Strategies LLC of San Jose, Calif., which closed its doors this month and has yet to return millions of dollars of client money.

Vesta was founded in 2004 by Chicago businessman John Terzakis and his partner, Robert Estupinian. Prior to starting Vesta, Mr. Terzakis had a history of failed real-estate deals and soured relationships — information Mr. Terzakis isn’t required to disclose to potential clients. Now the two men are accusing each other in separate lawsuits of diverting millions of dollars from Vesta for personal use….. Full Article: Source

Middle Eastern real estate bubble trouble?

Posted on 31 July 2008 by Laxman  |  Email |Print

From There has been a lot of talk lately about a Middle Eastern real estate bubble. Is all the talk just a lot of hot air, or is there more to it that that? Warnings about real estate bubbles rarely seem to be out of the news as economists fret about consumers spending more than they are saving and governments grapple with inflation. However, most market watchers admit that they are now looking at a new type of economic phenomenon as the developed Western markets slow down and emerging markets hot up. Add a plunging dollar, soaring inflation, high commodities prices and a real estate boom on side of the world and a virtual economic collapse and investors are finding themselves in unfamiliar economic grounds.

Fierce competition amongst banks and mortgage lenders in the US, Spain, Ireland and other parts of Europe led to consumers being offered mortgages under the most ridiculous circumstances. Some mortgage applicants could not even afford to put down a cash payment, yet were still offered huge loans that were well beyond their abilities ever to pay back….. Full Article: Source

Chrysler deal fails to ignite US investment

Posted on 31 July 2008 by Laxman  |  Email |Print

From Middle East investment in US real estate is expected to be flat or down this year despite the $3.7 billion acquisitions of New York’s Chrysler Building and the General Motors Building.

Investors from the Middle East have spent $2.7 billion on U.S. assets in the year to date, according to data from real-estate research firm Real Estate Analytics Inc. At that pace, full year sales will be significantly below last year’s $8.2 billion.

The current investment climate has given cash-rich Gulf governments an edge over other investors as the cost of debt remains high in the wake of the global credit crunch and US property prices continue to slump, although prices have held up in Manhattan….. Full Article: Source

Sunshine 100 may postpone HK IPO

Posted on 31 July 2008 by Laxman  |  Email |Print

From Sunshine 100 Group, a Beijing-based Chinese developer, will probably postpone its initial public offering (IPO) in Hong Kong due to the weak market conditions, sources cited Fan Xiaochong, vice-president of Sunshine 100, as saying.

Earlier reports said Sunshine 100 planned to get listed in Hong Kong by the end of this year. Fan also noted the company is trying to expand its financing channels so as to amid China’s credit-tightening measures.

Sunshine 100 is also reportedly preparing to issue high yield debt overseas. Deutsche Bank AG and Credit Suisse are likely to be appointed to arrange the deal. Sunshine100 is also in talks with several domestic and overseas investment banks on possible investment possibilities, including Canada’s largest fund company CDP….. Full Article: Source

Key Hungarian property market index stagnates in second quarter

Posted on 31 July 2008 by Laxman  |  Email |Print

From Economic think-tank Ecostat’s Real Estate Barometer, a measure of sentiment on Hungary’s property market, inched up four-tenths of a percentage to 46.0pc in Q2 from the previous quarter, Ecostat director Pal Belyo said at a press conference on Wednesday.

Mr Belyo said the slight increase is tantamount to stagnation, adding that property investors - who are feeling the most the drop in retail purchase power - are the least optimistic among market players. Ecostat sees little chance of a significant rise in demand for homes this year.

Demand for small homes is seen continuing to drop, and the new home market is expected to remain a buyers’ market….. Full Article: Source

Property investment - Back to the future fundamentals

Posted on 31 July 2008 by Laxman  |  Email |Print

From The great bete noir of property investors - Roger Bootle (he who forecast 25% falls in house prices over 4 years ago - since when prices have risen rapidly) is back! He adorns the Daily Telegraph with his column and is feted for his wisdom and foresight - just 4 or 5 years out of whack by timing!

However, Roger’s come-uppance hasn’t fully arrived yet. Even during these terrible times and complete lack of credit, house prices have fallen (on an annual basis via the land registry) a mere 1%. That is 96% less than Roger’s forecast. …. Full Article: Source

How to shake off the mortgage mess

Posted on 31 July 2008 by Laxman  |  Email |Print

From Where are the hosannas for Congress’s handiwork on housing? Nobody expected it to solve anything, but it’s worth understanding why.

By CNBC’s count, the federal government has already made roughly $1.4 trillion available to refinance mortgage debt since the housing meltdown began. That makes this week’s bill, which adds another $300 billion to the pot, seem a mite anticlimactic. The key word is refinance. Even if this money helps prevent foreclosures, it’s aimed at houses that people want and that would likely resell even if foreclosed. Hardly touched is the real problem of tens of thousands of houses financed during the subprime boom that are unoccupied, unwanted, falling apart, built on spec, mortgaged on spec and abandoned on spec.

Washington has practically monopolized the business of financing and refinancing home sales for willing buyers and sellers, but it does nothing about the homes going rancid on the shelf, souring the value of the nation’s entire housing stock and mortgage debt. …. Full Article: Source

Bulgaria mortgage volumes pull level with consumer loans

Posted on 31 July 2008 by Laxman  |  Email |Print

From The size of the Bulgarian banks’ mortgage portfolio has now equalled consumer credits on their loan books, data of the central bank by the end of June 2008 shows.

Mortgage loans topped 6.765 billion leva by the mid-year mark, compared to 6.802 billion leva in consumer loans. The share of mortgages in total household loans is up to 41.6 per cent from 25.8 per cent three years ago.

Mortgage lending has outpaced all other banking segments, posting end-June growth rates of 72.4 per cent and 74.6 per cent in 2006 and 2007, respectively. That momentum subsided somewhat to 64 per cent by the end of 2007 and then further to 53 per cent by mid-2008. The consumer loan share in the banks’ retail exposures stood at 41.8 per cent at end-June versus 56.3 per cent three years earlier….. Full Article: Source

Review targets property managers

Posted on 31 July 2008 by Laxman  |  Email |Print

From Property managers will face Government scrutiny amid growing concern over a lack of accountability. Associate Justice Minister Clayton Cosgrove announced the move to review regulation of property managers yesterday as part of a political deal with New Zealand First and the Green Party to save the controversial Real Estate Agents Bill.

The bill, aimed to bring greater accountability to the real estate sector, has been reported back from a parliamentary select committee after receiving about 1100 submissions from the the industry and the public. Concerns centred on the role of the Real Estate Institute of New Zealand (Reinz) and the decision to exclude property managers from the legislation.

The bill strips the institute of its regulatory powers and sets up an independent body to oversee the 18,000 agents. Reinz lobbied hard to water the bill down and include property managers, accusing Cosgrove of a high-handed and combative approach….. Full Article: Source

SA: Property dip leads ooba to cut staff numbers

Posted on 31 July 2008 by Laxman  |  Email |Print

From South African bond origination group ooba has become a victim of the ailing residential property market, with the group confirming yesterday it intended to retrench head office staff.

In an internal e-mail to staff sent on Monday, chief operating officer Rhys Dyer said the group “ had to issue notice of contemplation of retrenchment letters” to a number of staff at head office. Ooba — formerly Mortgage SA — employs 730 people.

“In total, 30 staff in head office are affected,” said Dyer. Ooba CEO Saul Geffen confirmed yesterday the e-mail had been sent to staff and there was now consultation taking place with the affected staff members….. Full Article: Source

Ireland: Property prices fall further as Dublin second-hand homes drop by 10.4%

Posted on 31 July 2008 by Laxman  |  Email |Print

From average cost of a new house was just over 3 per cent lower in the first three months of this year than in the same period last year, according to new figures from the Department of the Environment.

Prices of second-hand houses suffered a sharper fall of 5.4 per cent, but the greatest decline was in the price of second-hand houses in Dublin which were 10.4 per cent lower in the first quarter of the year than in the same period of 2007.

The price of new houses in the capital fell by 4.8 per cent.Galway bucked the national trend with a 4.6 per cent increase in second-hand house prices….. Full Article: Source

HSBC, Nan Fung to invest $100 million in Taiwan property market

Posted on 31 July 2008 by Laxman  |  Email |Print

From A fund jointly raised by HSBC Holdings PLC and Hong Kong textile and property conglomerate Nan Fung Group plans to invest US$100 million in Taiwan’s commercial property market, the Commercial Times reported Wednesday, citing Wyatt Choy, the fund’s investment director.

The investment will be for three to five years, and the fund may seek additional investment funds from Hong Kong brokerage and fund manager Sun Hung Kai Financial and Singapore’s retail and property-investment conglomerate Metro Group, which are also interested in Taiwan’s real estate market, the Chinese-language newspaper said.

…. Full Article: Source

Fitch study points to high CMBS risk

Posted on 31 July 2008 by Laxman  |  Email |Print

From More than half of investment grade commercial mortgage-backed UK transactions could be at risk of default if the downturn in the property market is as bad as many analysts fear.

According to a Fitch study of the commercial mortgage-backed securities rated by the agency, a crash in UK property prices as bad as the last big downturn in the early 1990s would affect 35 of the 67 outstanding investment grade transactions.

But the level of loss will be much less severe, with just 7.4 per cent expected to be wiped off the overall £32.8bn ($64.9bn) of outstanding securitised loans in the UK rated by Fitch….. Full Article: Source

Bush signs housing bill as Fannie Mae grows

Posted on 31 July 2008 by Laxman  |  Email |Print

From President George W. Bush on Wednesday signed into law a sweeping rescue package aimed at resurrecting the housing market from its worst slump since the Great Depression and stabilizing the two largest mortgage finance companies.

The new law launches a $300 billion government initiative to refinance troubled mortgages, and boosts oversight of Fannie Mae and Freddie Mac, which own or guarantee almost half the country’s $12 trillion in home mortgage debt.

It expands a line of U.S. Treasury credit for the companies, and gives the government the option to take equity stakes if they ran into trouble.

Lawmakers ironed out the law over the past month to stem a crisis in investor confidence over the two companies, which were created by Congress to keep mortgage money flowing. The companies are trying to strike a balance between expanding earning power and providing finance for the mortgage market against containing losses that have eroded their capital….. Full Article: Source

UK: Incentives for new build property buyers

Posted on 31 July 2008 by Laxman  |  Email |Print

From Property investors in the UK are benefiting from a range of incentives being offered by developers who are desperate to sell their new homes. And it is likely to continue as a new report shows that building contractors are not passing on the increase in costs of materials and wages, thus keeping the price of new buildings down. They are choosing to absorb the extra costs in an attempt to fill order books.

Incentives being offered to those buying new homes include part exchange, deposit paid, fees paid, moving costs paid, mortgage subsidies, guaranteed rentals and even a guarantee of future prices.And in some cases developers are offering carpets, curtains and light fittings as well as cars and holidays.

‘No one is likely to choose a home solely because of the incentives available….. Full Article: Source

UK: Average home price expected to fall £50,000

Posted on 31 July 2008 by Laxman  |  Email |Print

From The housing market slump will wipe £50,000 off the value of the average British home and plunge one in seven homeowners into negative equity, influential new research suggests.

Some 70,000 mortgage-holders already owe more than their homes are worth after the near-10 per cent falls in house prices over the past year, Standard & Poor’s (S&P), the credit ratings agency, said. It forecasts that prices will fall by a further 17 per cent, or £30,000, by next April, putting 1.7 million borrowers into negative equity. A 17 per cent fall in prices would take the value of the average house to about £150,000, down from £199,600 in August last year, according to Halifax figures. S&P said that for every further percentage point decline in house prices, between 60,000 and 180,000 extra homeowners could fall into negative equity.

The news came as a poll showed that consumer confidence had tumbled to a 34-year low. The GfK/NOP index measuring attitudes to personal finances and Britain’s economy fell to -39 this month, down from -34 in June and the lowest level recorded since the series began in 1974….. Full Article: Source

Kuwait’s Global launches Mushaa Real Estate Company

Posted on 31 July 2008 by Laxman  |  Email |Print

From Global Investment House (Global) announced today the launch of Mushaa Real Estate Company (Mushaa) with a capital of KD30 million. Mushaa will present a series of distinctive real estates in the GCC markets utilizing the concept of Hisas Al-Mushaa.

This will be followed by Mushaa’s expansion and entry into other markets. Mushaa’s operations and activities will be Sharia’a compliant.

With regards to Mushaa’s excellent opportunities, Mr. Omar El-Quqa, Executive Vice President at Global said: The real estate sector is growing at an unprecedented level in the region, and is expected to continue growing. The real estate sector is also the fastest growing in comparison to other sectors, especially the hospitality segment which is strongly correlated to GDP”.

He further clarified that the opportunity is still there for a considerable demand for Islamic timeshare, a sector which is under-represented in this region….. Full Article: Source

Dragons Den millionaire invests in Italian property

Posted on 31 July 2008 by Laxman  |  Email |Print

From The man who became the first millionaire on the popular TV show Dragons Den with his clever electrical device is now investing in property. Peter Moule, an entrepreneurial businessman whose £1 gadget for protecting electrical connectors is an international success, has spent €600,000 on a luxury property in Italy.

It was while travelling on business that he decided a second home overseas would be a perfect retreat from his hectic lifestyle. He wanted unspoilt countryside but within reach of the beach and snow capped mountains.

Now he and his wife Beverley have invested in an apartment in the 13th century village of Colletta di Castelbianco in Liguria which had been restored by award winning companies Colletta di Castelbianco Srl and Realitalia….. Full Article: Source

Foreign countries offer investment in Sinpas

Posted on 31 July 2008 by Laxman  |  Email |Print

From A wide range of foreign countries, including Iran, Qatar, Belarus and Turkic republics, have recently shown interest in investing in a Turkish real estate investment trust. The Sinpaş Real Estate Investment Trust, or REIT, managers met last week with an Iranian committee, which included the country’s minister of public works and Belarusian businessmen, to discuss details of the forthcoming projects. Meanwhile, the company also became partners with Qatar’s most influential real estate investment company, Barva. The company will realize investments in Iran, Qatar, Belarus and Turkic republics under the name the Sinpaş Construction Industry.

We have evaluated the opportunities to launch real estate projects in Iran during our talks with the Iranian committee. In addition, we have carried out talks with Belarusian businessmen concerning the initiation of real estate projects in Istanbul, said Ahmet Çelik, a board member of Sinpaş Construction Industry. Besides, we have been conducting a preliminary investigation for the construction of a big ceramic factory in Belarus. We will also cooperate with Qatari real estate company Barva on project sites of Turkey’s Mass Housing Administration (TOKİ), located in Zeytinburnu. We have not reached a conclusion concerning the details of the project, but a hotel or a shopping center might be built on the area, he added….. Full Article: Source

Subprime lending not main trigger of real estate bubble

Posted on 31 July 2008 by Laxman  |  Email |Print

From Critics often point to subprime mortgage lending – the funding of home loans to borrowers with less-than-perfect credit – as the culprit in the unsustainable boom in U.S. home prices that eventually derailed the real estate and mortgage markets.
But new research led by UC Irvine’s Paul Merage School of Business Center for Real Estate suggests subprime loan products themselves may not be the primary cause of U.S. home prices’ rise and fall.

Instead, the considerable 2003 pullback of government-sponsored financial service corporations Fannie Mae and Freddie Mac from the credit market and their replacement by aggressive, private mortgage securities issuers in late 2003 had a significant impact on home prices and was more responsible than subprime lending for the drastic price runup that peaked in early 2006….. Full Article: Source

Australian house prices to fall 10% in the next year

Posted on 31 July 2008 by Laxman  |  Email |Print

From Property research company Australian Property Monitors has predicted house prices will fall 10% across the nation in the next 12 months as a result of high interest rates and the looming economic slowdown.

The firm’s median house prices statistics for the June quarter revealed that Sydney house values dropped by 2.1% during the quarter, while Perth houses slipped 2.8% and Melbourne fell 0.6%. Brisbane fell 1.3% and Canberra prices slipped 0.6%.

The only bright spots were Adelaide, where prices increased 0.4% during the quarter, and the smaller markets of Hobart (up 0.2%) and Darwin (up 0.9% markets).

“The June quarter housing data is the weakest we’ve observed since 2004. This quarter we recorded widespread falls across Australia’s major capitals, and we expect this trend to continue,” APN general manager Michael McNamara says….. Full Article: Source

UK: House prices ‘will rise again in 2011′

Posted on 31 July 2008 by Laxman  |  Email |Print

From North East house prices will continue to fall for the next two years before property values start to improve again in 2011, housing experts claim. nyone selling a house in the region in 2009 can expect offers 5.1% lower than they would have received had the economy not started to slow down.

The National Housing Federation commissioned independent experts Oxford Economics to forecast house prices in the wake of the credit crunch. They predict that by 2010 thousands of pounds will have been wiped off the value of North East homes, with the average property selling for £132,900.

But they say the recovery will start before the end of that year, 2011 will see modest rises and here will be large rises in 2013 – yet the North East will continue to see homes sell for an average £100,000 less than in England as a whole….. Full Article: Source

Hedge funds are buying up delinquent mortgages

Posted on 31 July 2008 by Laxman  |  Email |Print

From Guess who holds your mortgage now? It’s your friendly neighborhood hedge fund. Dozens of hedge funds, private equity groups and other investors have plunged into the beaten-down mortgage market in recent months, buying tens of thousands of distressed loans and foreclosed properties around the country. They hope to profit from the woes of banks and other investors holding mortgages that have plummeted in value as home values sink and defaults soar.

They are buying them from Wall Street investment banks eager to rid themselves of bad assets. Merrill Lynch & Co., for example, said this week it would sell mortgage-linked investments once valued at $30.6 billion for just $6.7 billion to Lone Star Funds, a distressed-debt investor in Dallas.

Many of the hedge funds, run by former Wall Street and lending industry executives, claim they can do a better job than banks or other investors of modifying mortgages at terms that consumers can afford….. Full Article: Source

US home prices drop by record 16% in May

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From has been no overall home price increase in any month since August 2006, according to a today’s housing index. American house prices fell at their fastest rate on record in May, declining 15.8 per cent compared with the same month the year before.

According to the S&P/ Case-Shiller index of residential property values - widely seen as the most authoritative measure of US house prices - there has not been an overall home price increase in any month since August 2006.

The main index, which measures house prices in 20 cities across the US, recorded a 15.8 per cent drop, while the other, narrower Case-Shiller index which monitors 10 cities, showed a 16.9 per cent decline in property prices. That fall is the sharpest since the 10-city index was first calculated 21 years ago….. Full Article: Source

Land Registry confirms housing market slide

Posted on 31 July 2008 by Laxman  |  Email |Print

From Rapidly worsening conditions in the housing market were officially confirmed yesterday by Land Registry figures showing that year-on-year increases in house prices all but ground to a halt last month.

The official figures showed that on a monthly basis house prices in England and Wales fell by a further 1 per cent last month, wiping just over £1,800 off the value of the average home.

The latest steep decline in prices cut their annual pace of increase on Land Registry data to a meagre 0.1 per cent - the lowest rate since its records on monthly price moves began in April 2001. June’s price fall came on the heels of a revised 0.6 per cent drop in average home values in the previous month and marked the tenth consecutive month of decline in the market….. Full Article: Source

Green housing policy must be more radical

Posted on 30 July 2008 by Laxman  |  Email |Print

From : The government should seek to provide greater environmental benefits, says Rynd Smith. The tougher green design and planning standards announced by the government last week for eco-towns are laudable, but far from radical. They can be achieved without too much trouble, and few of them represent real cutting-edge thinking on sustainability. Perhaps most underwhelming is that the standards apply only to eco-towns: many of the targets proposed by the government last week should be the aim for all new housing development.

The government wants the average house in an eco-town to be within a 10-minute walk of frequent public transport and neighbourhood services. It wants one worker in every home to be able to get to their job by walking, cycling or catching public transport. It wants every eco-town building - whether commercial, public or residential - to achieve a zero carbon rating. Those targets are already achievable for nearly all of the 3m new homes the government wants built by 2020. If we are to achieve a sustainable future, targets need to be mandatory across the board….. Full Article: Source

World Bank says NZ first in world for online property transactions

Posted on 30 July 2008 by Laxman  |  Email |Print

From By the end of 2008 it will be possible to lodge 98.6 percent of property transactions online, leading to the World Bank ranking New Zealand first in the world for ease of registering property transactions.

New Zealand is followed in the rankings by Armenia, Saudi Arabia and Lithuania.It became mandatory from August last year for all documents relating to the sale, purchase, or mortgage of land to be lodged electronically, and hard-copy lodgement is no longer available (with a few exceptions).

Some users however, particularly surveyors, have complained they can’t access all the information they need online, and that much of the hardcopy documentation has been moved from provincial centres into centralised locations….. Full Article: Source

House inflation close to zero

Posted on 30 July 2008 by Laxman  |  Email |Print

From House price inflation fell close to zero in June, the Land Registry said yesterday, in further evidence of the difficulties in the property market.

Like the FT house price index, the Land Registry’s data are based on the prices of properties sold in England and Wales. These figures have consistently shown slightly higher house price inflation than the main mortgage lenders.

But the trend in all house-price measures has been the same. House prices have fallen most months this year and there is no sign yet of any recovery.

Prices were 1 per cent lower than in May and only 0.1 per cent higher than in June 2007…. Full Article: Source

How to invest and profit in a falling real estate market

Posted on 30 July 2008 by Laxman  |  Email |Print

From There is no doubt that it is more difficult to profit from a falling real estate market in the short term. However, some of the most successful real estate investors in the world made their money by buying when everyone else said to sell. While the overall market is declining, there are still countless opportunities for great returns if you look in the right places and time your purchase well. This article will give you enough simple tips to determine whether it’s time to start buying or keep looking. Regardless of market or region, you’ll learn how to love the opportunity that a slow market creates.

Focus on the regional market: Every region has a unique story to tell. Edmonton, Alberta has enjoyed a huge increase in home prices over the last few years. Now they’re experiencing a cyclical plateau that will probably last into the Q3 or Q4 of 2008—and then house prices will pick up again. This is where your knowledge and research earns you great dividends. Target your area and review the economic fundamentals that fuel it. Look for:…. Full Article: Source

KKR unveils real estate ambitions

Posted on 30 July 2008 by Laxman  |  Email |Print

From Real estate, mezzanine debt and public equities are on the agenda for KKR, according to an investor presentation released in conjunction with the firm’s plans to go public.

Private equity firm Kohlberg Kravis Roberts is looking to expand its activities into real estate, mezzanine debt and public equities, just weeks after unveiling platforms for fixed-income and infrastructure asset management.

According to an investor presentation related to its plans to list shares on the New York Stock Exchange, KKR will also expands its activities to include real estate as well mezzanine and public equity. The firm announced it will continue to expand into Asia and add new geographies, including Latin America.

The firm does not specify further what its activities will include in these new businesses, other than to state that the new activities will “leverage” the KKR “brand.”

Several of the largest private equity firms, including The Carlyle Group and The Blackstone Group, also have real estate investment arms. KKR has lagged many of its competitors in rolling out branded affiliates. …. Full Article: Source

Hong Kong home sales may drop as share prices decline

Posted on 30 July 2008 by Laxman  |  Email |Print

From Hong Kong’s apartment transactions may fall to a 10-month low in July, then drop further, on concerns that accelerating inflation and a slumping stock market may push prices down, analysts said.

Transactions in 10 of Hong Kong’s biggest housing complexes, used by many analysts as a benchmark, fell to 27 last week from 33 the previous week, Centaline Property Agency Ltd. said. Total home sales in the city may drop to 6,100 in July, the lowest number since September, from 7,167 in June, Centaline said.

“This will probably continue for the whole of the third quarter,” said Louis Chan, managing director of residential properties at Centaline. “We’re looking at between a 3 and 5 percent correction in prices within the quarter.”

Home values have tracked Hong Kong’s economy, peaking in the second quarter of 1997, then crashing in the Asian financial crisis, leaving many homes worth less then their mortgages for years. …. Full Article: Source

Indian real estate prices in bubble zone

Posted on 30 July 2008 by Laxman  |  Email |Print

From The question that bothers a lot of prospective home buyers is whether they will miss the bus if they wait any further. However, the right question should be: Can I afford to buy a house today? Even if you are one of those blessed ones, the thought should be: Is it a fair price for the house? Your house might not be an investment, but does that mean you should pay any price for it?

The entire real estate boom took off in 2003 on the back of very low interest rates and low prices. However, the situation has changed now with realty prices going up 3-4 times, while interest rates are 60-70% higher. Incomes have certainly not grown four-fold in the past four years….. Full Article: Source

Fannie Mae Announces M-F Financing Modifications, Record $2B in First Half Volume

Posted on 30 July 2008 by Laxman  |  Email |Print

From Fannie Mae is working on a number of enhancements to its multi-family financing offerings, including a combined construction-permanent financing product.

The agency says it is cooperating with several DUS lenders who have construction lending expertise to combine construction financing with permanent debt. “The construction-to-permanent product will offer a seamless, lower cost execution and more certainty for the construction of new multi-family properties,” Fannie Mae states.

Currently, only HUD offers a multi-family construction-permanent loan, under its FHA mortgage insurance program. HUD’s combined financing requires one underwriting and approval for both loans, with the construction loan rolling over to permanent loan. Despite major improvements over the years, customers still complain HUD’s processing of the insured loan product can be cumbersome depending on the market….. Full Article: Source

Abbey becomes UK’s biggest mortgage lender

Posted on 30 July 2008 by Laxman  |  Email |Print

From Abbey, the high street lender owned by Spanish banking giant Santander, wrote one in three of all new mortgages in the three months to June, catapulting it above Halifax-owner HBOS to become Britain’s biggest mortgage lender in the first half of the year.

Warning that house prices will fall 5pc-7pc this year and against a backdrop of a shrinking mortgage market, Abbey more than doubled net lending to £8.3bn in the six months to June, from £3.6bn last year. For the half-year as a whole it wrote 25.6pc of net new mortgage lending.

Abbey’s dominance has been helped by rivals drawing in their horns to bolster their balance sheets. Figures from the Building Societies Association yesterday showed the mutual movement removed £526m from the market in the half as they attempted to shrink their loan books, having provided £1.32bn of new home loans last year. In total, net mortgage lending is forecast to halve to £55bn this year.

Analysts do not expect Abbey to replicate the exceptional performance of the past three months but do believe it will continue to take market share. The lender currently accounts for 9.7pc of the mortgage market and is forecast to write 15pc to 20pc of net new lending in the second half…. Full Article: Source

Two years before UK property market recovers

Posted on 30 July 2008 by Laxman  |  Email |Print

From The UK property market will continue to see prices falling for the next 18 months and recovery may not begin until 2010, according to an analysis of the current downfall.

The worst case scenario is that it could be even worse than the last major downturn in the 1990s as prices have fallen further but it will not be as bad as in the US or Spain.

‘If you look at the UK market as a whole you are seeing prices fall, with the exception of Scotland for various reasons. And I think the reality is that we should expect prices to fall further over the next year to 18 months,’ said Liam Bailey, Head of Research at Knight Frank.

He said prices have fallen much quicker than they did in the 1990s. ‘The assumption for most people is, if prices fall it’s not ideal, but actually the best and most important thing is we get churn in the market, that deals are done, and this time round it seems to be much quicker and much harder than it was in the 90s,’ he explained….. Full Article: Source

Home Prices Hit Four-Year Low

Posted on 30 July 2008 by Laxman  |  Email |Print

From The S&P/Case-Shiller index reports that in May, home prices plunged to 2004 price levels, wiping out four years of appreciation. Home prices in May plummeted 15.8% from a year earlier, to 2004 price levels, wiping away four years of appreciation, according to the S&P/Case-Shiller 20-city home-price index released July 29.

Analysts have become increasingly pessimistic that a bottom to the market will arrive anytime soon. The S&P/Case-Shiller report is only the latest evidence that home prices are swinging backward with at least as much force as they swung the other direction during the boom. Places that had double-digit increases a few years ago are now seeing prices drop by as much as 28% in a year.

Peter Schiff, president of Darien (Conn.) brokerage Euro Pacific Capital, said prices could slide to levels last seen before the housing boom began in the early 2000s.

“Demand is way below where it was eight years ago; supply is way above,” Schiff said. “Why should prices be substantially higher than they were in 2000? The Dow isn’t where it was in 2000. Stocks are worth less than they were. Why should real estate stand out as worth more?” … Full Article: Source

Property awards for Ocean Village

Posted on 30 July 2008 by Laxman  |  Email |Print

From Gibraltar’s Ocean Village has been internationally recognised by receiving awards for its unique development. Competing in the prestigious CNBC Europe & Africa Property Awards 2008, the results just announced reveal Ocean Village has been awarded Best High-Rise Architecture, Best Interior Design and Best Apartment.

The accolade for Best High-Rise Architecture was awarded in recognition of the distinctive design of Royal Ocean Plaza, featuring balconies of blue glass that surround the expansive terraces of each apartment. The judges were also impressed with innovations of construction, the provision of large communal spaces and the integration with landscaped gardens and pools. The high specification of design, fixtures and finishes has been further acknowledged by Ocean Village winning awards for Best Apartment and Best Interior Design. The awards will be presented at a gala dinner held at The Sheraton Park Lane Hotel in London on 27th September…. Full Article: Source

US property downturn is good news for conservationists

Posted on 30 July 2008 by Laxman  |  Email |Print

From The downturn in the property market in the US is good news for one group of people - conservationists are buying up historic and scenic land once earmarked for development. The Trust for Public Land, a national not for profit organisation that helps conserve land as parks, historic sites and rural areas, has recently secured almost 1,000 acres of land in Georgia, Oregon, Minnesota and Massachusetts.

And it is currently trying to ’save’ beaches on the north shore of O’ahu, Hawaii, home to the threatened green sea turtle and endangered monk seal.

‘It is the green lining of the current property market,’ said Will Rogers, president of the Trust which uses a pool of money to buy property until other land trusts and governments can raise enough money to buy it….. Full Article: Source

Positive outlook for commercial property in Scotland

Posted on 30 July 2008 by Laxman  |  Email |Print

From The outlook for commercial property in Scotland is a “positive” one when compared to regions just south of the border, it has been suggested.According to Steve Georgiou, director of Property Executive, commercial property in the north of England has a much “gloomier face” than in Scotland.

He points out that while the residential market is Scotland, like the rest of the UK, is “struggling”, commercial property developers remain “positive” about the future.As for commercial property across the UK as a whole, in comparison to residential property, Mr Georgiou insisted: “Commercial is the way at the moment, without a shadow of a doubt there’s more of a positive outlook.”

Earlier this year, Halifax reported that the biggest property price increases in the UK last year were seen in Scotland.Prices rose by 13.1 per cent in 2007 compared to the UK average of 5.2 per cent, the building society’s data revealed…. Full Article: Source

Direct commercial property investment ‘better than Reits’

Posted on 30 July 2008 by Laxman  |  Email |Print

From Direct investment in commercial property can yield better returns than investing through real estate investment trusts (Reits), it has been claimed. According to the British Council of Offices (BCO), Reits may not be giving commercial property investors the best returns for their money.

Figures from Investment Property Databank show that commercial property returns fell by 1.5 per cent in June compared to a decline of 0.7 per cent in May.But BCO chairman Mr Oakley said he suspects the average fall in Reits share prices already exceeds the fall in capital values on commercial property.

“Had you spent £100,000 on commercial property in January 2007 and had you spent £100,000 on a listed property company, you would be feeling a lot happier with your direct property investment rather than your Reit,” he remarked.

The Reita quarterly property investment perspective, published in May, predicts that UK property stocks will fall by a further 15 to 25 per cent this year…. Full Article: Source

Spain building permits dive 57 pct from last year

Posted on 30 July 2008 by Laxman  |  Email |Print

From Permits issued for building new houses in Spain plummeted 57 percent for the year to May from a year earlier, the College of Architects said on Tuesday.

In a further sign that Spain’s decade-long construction boom is over, the College said 143,918 permits were granted in the first five months of 2008, down from 336,263 in the same period of 2007.

The property downturn is one reason Spain’s economy has swiftly ground to a near halt, having been one of the fastest growing in Europe last year.

Spain’s largest property developer Martinsa Fadesa (MFAD.MC: Quote, Profile, Research) has filed for administration and other large Spanish property estate firms are struggling to refinance heavy debts…. Full Article: Source

July 2008
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