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Real Estate Briefing - Archive | October, 2008

Indian realtors seek govt help in times of crisis

Posted on 30 October 2008 by Laxman  |  Email |Print

From The doyens of the country’s real estate sector — K P Singh of DLF and Ramesh Chandra of Unitech — recently met top UPA government functionaries to seek higher tax breaks on housing loans and easier lending by banks to the sector.

The meeting comes in the wake of these companies seeing a massive erosion in their market capitalisation. Singh and Chandra recently came together to call on a leading UPA minister and top Congress politician to sound him out about the travails of the real estate sector, which has seen realty prices falling and credit for builders disappearing. …. Full Article: Source

Middle East no longer a safe haven

Posted on 30 October 2008 by Laxman  |  Email |Print

From Malaysian construction players which had sought refuge in the high-growth markets of the Middle East may now no longer regard the region as a safe haven in the face of the global credit crunch.

Analysts said the local construction companies looking to replenish their order books with jobs particularly from the Middle East were likely to find the road to that region bumpier than it used to be, primarily due to funding issues there. …. Full Article: Source

Commercial real estate buyers not biting at current prices

Posted on 30 October 2008 by Laxman  |  Email |Print

From Turmoil in the credit markets and economic weakness has virtually frozen the commercial property markets, with buyers reluctant to commit as prices fall and sellers refusing to deal unless forced to by financing constraints, a panel of real estate financiers said.

With vacancies predicted to rise for nearly all property types and rents expected to fall, office, retail, hotel and industrial holdings are likely to drop in value in the coming year, making it difficult to underwrite any transactions, the panel of experts said at a meeting of the Urban Land Institute here. …. Full Article: Source

Cambodia: Property market should revive in 2-3 years: official

Posted on 30 October 2008 by Laxman  |  Email |Print

From Ministry of Economy and Finance official Hang Chuon Naron says that Cambodia’s weakened real estate market is likely to be back on track within two or three years.

“I hope the real estate market in Cambodia will return to normal within the next three years,” Hang Chuon Naron told Prime Location on the sidelines of a recent conference on initial public offerings in Phnom Penh. He also said that the global financial crisis and the recent slowdown in construction in Cambodia were the causes of the sluggish market. …. Full Article: Source

The housing bust: Signs of a bottoming out?

Posted on 30 October 2008 by Laxman  |  Email |Print

From Time: The last piece of the last residential construction crane in Miami is coming down this week. Don’t expect to see another crane in this city for a decade, says Peter Zalewski, a real estate broker and founder of Condo Vultures, a realty intelligence service.

Miami is both a metaphor and model for once torrid real estate markets that melted in the subprime debacle. Miami developers threw up some 23,000 units beginning in 2003, many of them bought by speculators who thought they could flip them for a quick profit. Some did. …. Full Article: Source

Spain’s mortgage market continues to struggle

Posted on 30 October 2008 by Laxman  |  Email |Print

From The beleaguered Spanish mortgage market has continued to take a battering this week after the Spanish Housing Association announced that the number of mortgage transactions has continued to fall.

The number of house transactions in August fell by 36 percent compared to last year, which signalled that the situation is getting worse. …. Full Article: Source

China’s real estate market continues to slide

Posted on 30 October 2008 by Laxman  |  Email |Print

From CCTV: Recent new lending policies from the Chinese government don’t appear to be having much effect on propping up the battered housing market so far.

To breath life back into the housing market, the central bank last week cut taxes, mortgage rates and down payments to make purchasing easier for home buyers. But dealers say they have not spotted any changes to the market, that has been in downturn for almost a year. …. Full Article: Source

House prices will hit last year’s peak in 2013

Posted on 30 October 2008 by Laxman  |  Email |Print

From House prices in the UK will not hit the peak they were in 2007 for another five years, according to predictions from the Centre for Economic and Business Research (CEBR).

Forecasts from the group also suggest that a trough at the end of 2009 will see house prices fall by 25 per cent from their highest point last year, it has been reported. …. Full Article: Source

Cyprus re-unification talks hold key to future property boom

Posted on 30 October 2008 by Laxman  |  Email |Print

From As leaders of the Greek Cypriot and Turkish Cypriot communities continue their talks on the re-unification of Cyprus debate over buying property on the divided island also continues. Passions run high.

Cyprus is not only physically divided, it has come to represent the emotions of two different nations - the Greeks and the Turks, a strong Mediterranean brew that exists on an island divided into the internationally recognised Republic of Cyprus and the ‘occupied’ Turkish Republic of North Cyprus. …. Full Article: Source

Australian listed real estate investment trusts are world’s worst performers

Posted on 30 October 2008 by Laxman  |  Email |Print

From Australia has the worst-performing listed real estate investment trusts in the world, according to a global study. Of 16 countries with mature real estate investment trust (REIT) markets, Australia has delivered the worst returns to investors in the past year — with an average loss of 48.71%.

That compares with an average loss of 21% globally. Australian REITs also had the worst performance over three years, delivering a loss of 6.55%. …. Full Article: Source

Commercial property values fall 7.2% in 8 weeks in UK

Posted on 30 October 2008 by Laxman  |  Email |Print

From UK commercial property values have fallen by 7.2% in the last eight weeks according to global real estate adviser Cushman & Wakefield. Figures in its latest Business Briefing:

UK Property Investment Market also show that average prime UK yields have increased to 6.49% as at mid-October, the highest since 1993. The report concludes that whilst the UK remains at the frontline of the global financial crisis it is continuing to see a rapid adjustment in pricing. …. Full Article: Source

Abu Dhabi’s real estate sector set for continued growth

Posted on 30 October 2008 by Laxman  |  Email |Print

From The unique strengths of Abu Dhabi mean the Emirate’s real estate sector is poised for continued growth despite the global downturn, said Sorouh’s Managing Director, Abubaker Al Khouri.

Al Khouri outlined the strong market fundamentals which ensure demand will remain strong over both the short- and long-term. These include an economy which is experiencing high levels of GDP growth, a booming population and recent liberalisation of the real estate sector. …. Full Article: Source

Belgrade property prices tumbling in region

Posted on 30 October 2008 by Laxman  |  Email |Print

From B92: The price of new flats in Podgorica has been cut by half. Only Belgrade is holding firm: prices have leveled out, and are likely to fall by 5-10 percent in the coming year. Nonetheless, the global financial crisis has checked skyrocketing property prices in the capital.

However, there will be no dramatic drop in real estate prices, as was the case in the U.S. and parts of Europe, and what reductions there are will be in five to ten percent increments on a yearly basis. …. Full Article: Source

US house prices will fall 30% before upturn

Posted on 29 October 2008 by Laxman  |  Email |Print

From Times Online: American house prices fell at their fastest rate on record as Wall Street braced itself for at least another year of real estate misery.

According to the S&P Case-Shiller US index — widely viewed as the most authoritative measure of American residential real estate values — house prices across the 20 US cities surveyed fell by 16.6 per cent in August compared with the same period the year before….. Full Article: Source

Demand starts to edge in on the tumbling market

Posted on 29 October 2008 by Laxman  |  Email |Print

From However dire the mortgage and property market is – and it is pretty dire – there are always some bright spots. Not everyone is a first time buyer looking for a 90% loan and there is demand from existing owner occupiers, second home buyers and investors – most of whom are waiting to see where house prices settle.

‘Some of our professional landlords are already in the market and have been able to negotiate deals at up to 25% below the 2007 prices,’ says Lee Grandin, managing director of Landlord Mortgages….. Full Article: Source

Canada house market lags US crisis by 2 yrs -Merrill

Posted on 29 October 2008 by Laxman  |  Email |Print

From Reuters: The Canadian housing market is edging toward a major downturn as overbuilding is adding to already “voluminous” supply, Merrill Lynch economists said on Tuesday.

Economists David Wolf and Carolyn Kwan said developments in the Canadian market lag similar developments in the U.S. market by about two years. They said the ramp-up in Canadian construction may even be larger than it was in the United States, with more units, largely condos, being built in each of Toronto and Vancouver than in all Canadian cities combined a decade ago….. Full Article: Source

US and European institutional investors still growing property allocations

Posted on 29 October 2008 by Laxman  |  Email |Print

From Institutional investors in Europe and the US are increasing their allocation to property, according to private equity company JE Robert Companies.

In a survey published today, JER said 60% of 245 executives from financial institutions, endowments and foundations, who were surveyed, said their mandates for property were growing….. Full Article: Source

China, S.Korea need to do more to avoid housing crash

Posted on 29 October 2008 by Laxman  |  Email |Print

From Reuters: China and South Korea have moved to prop up their frazzled housing markets but probably need to do much more to avoid major price slides that could ruin developers, damage banks and threaten the region’s economies.

The Chinese government, fearing a price bubble, was in market cooling mode only a year ago, squeezing developers with a clampdown on loans and hatching moves to stamp out speculation….. Full Article: Source

Gulf governments will intervene rather than see property bubble burst

Posted on 29 October 2008 by Laxman  |  Email |Print

From The intervention of governments in the Middle East to stop the property bubble from bursting is inevitable, according to analysts.

Sunday’s intervention of Kuwait’s central bank to guarantee deposits and its bailout of the country’s largest banks is the first in the oil-rich Gulf but won’t be the last….. Full Article: Source

Bank of England predicts 1.2 million property owners will fall into negative equity

Posted on 29 October 2008 by Laxman  |  Email |Print

From Over a million British properties could fall into negative equity as house prices drop faster in the UK than in the US, the Bank of England is warning.

About 1.2 million British households could suffer outstanding mortgage debt higher than the value of their home, it said in twice-yearly Financial Stability Report….. Full Article: Source

Kuwait could emerge as attractive option for UAE-based developers

Posted on 29 October 2008 by Laxman  |  Email |Print

From UAE-based developers said yesterday they are open to the idea of investing in Kuwait’s real estate sector, but a cautious approach is what they intend now.

“We look at opportunities everywhere and even Kuwait would be an option. However, we need to understand the rules and regulations of the country whenever they are passed,” Mohamed S Binbrek, Group Chief Executive Officer, Dubai Properties Group said….. Full Article: Source

UK: 71% rise in home repossessions

Posted on 29 October 2008 by Laxman  |  Email |Print

From Independent: The number of homes that were repossessed during the three months to the end of June soared by 71 per cent compared with a year earlier, figures showed today.

The Financial Services Authority said 11,054 homes were repossessed in the three months to the end of June, compared with just 6,476 during the same three months of 2007….. Full Article: Source

Capital Gate to enter Guinness Book of Records

Posted on 29 October 2008 by Laxman  |  Email |Print

From As construction of Capital Gate continues in the UAE capital city, Abu Dhabi National Exhibitions Company (Adnec), which is developing the iconic building, and RMJM, project architects, have submitted a joint application to the Guinness Book of Records to recognise the tower as the “most inclined in the world.”

Capital Gate leans westward an astonishing 18 degrees; by comparison the Leaning Tower of Pisa leans less than 4 degrees. Because of its unique posture, the tower is being constructed on top of an incredibly dense mesh of reinforced steel….. Full Article: Source

Try before you buy in Portugal

Posted on 29 October 2008 by Laxman  |  Email |Print

From The Vigia group in Portugal, are offering prospective purchasers in the opportunity to test drive property in their popular Parque da Floresta Golf and Leisure Resort on the Western Algarve in Portugal, by renting for three-months.

The company are hoping that the possibility of checking out a home before committing to buying will prove an attractive option in these uncertain economic times….. Full Article: Source

Bailout ‘won’t stimulate commercial property sector’

Posted on 29 October 2008 by Laxman  |  Email |Print

From The government’s £37 billion bank recapitalisation plan will not have a significant effect on the commercial property downturn, Capital Economics has said.

Earlier this month, the treasury announced that public money would be used to buy equity stakes in three major UK banks: RBS, HBOS and Lloyds TSB. This could mean that 60 per cent of RBS and 40 per cent of a merged Lloyds TSB/HBOS would be in government control….. Full Article: Source

Real-estate slump thrusts lenders into unfamiliar roles

Posted on 29 October 2008 by Laxman  |  Email |Print

From WSJ: Mezzanine lender Dominion Capital Management LLC didn’t anticipate developing shopping centers when it lent $170 million to developer Premier Properties USA Inc. But that is what Dominion is doing after Premier fell into bankruptcy court last spring.

Dominion, a small lender based in Atlanta, foreclosed in April on Premier’s 11 shopping centers, which were in varied stages of development. With them, the lender inherited a pile of problems: anxious first-mortgage holders; millions of dollars in contractors’ liens; and one new center where allegedly faulty construction forced retailers to vacate….. Full Article: Source

Black Sea Property Fund delays Bulgarian resi scheme

Posted on 29 October 2008 by Laxman  |  Email |Print

From The Black Sea Property Fund has delayed the start of its residential development Evergreen in the Mladost region of Sofia because of adverse market conditions in the country.

The AIM-listed company said that any termination fees or penalties from this delay will not have a material impact on the company. It said that the property will be retained by the company in its land bank and the board will decide what to do with it in due course….. Full Article: Source

Thailand: Property funds seen as relatively safe haven

Posted on 29 October 2008 by Laxman  |  Email |Print

From Property funds may be one of the last asset classes that can still offer relatively stable returns for nervous investors over a medium-term outlook, according to fund managers.

Property funds, while exposed to an economic downturn as much as any sector, can represent a sound investment option considering that many offer guaranteed returns for the first several years of 5% to 9%….. Full Article: Source

UK markets to struggle into 2010

Posted on 29 October 2008 by Laxman  |  Email |Print

From The nations’ real estate markets will bottom out next year but will continue to struggle to recover through 2010, according to a report by the Urban Land Institute and PricewaterhouseCoopers.

The Emerging Trends in Real Estate 2009 report, which cites real estate experts from across the country and was released Oct. 21, says commercial property in particular will suffer over the next year and faces its worst market since the recession of the early ’90s. Commercial property values could plummet another 15 percent to 20 percent from their highs of mid-2007, the report said….. Full Article: Source

Nigeria: Bearish trend threatens real estate sector

Posted on 29 October 2008 by Laxman  |  Email |Print

From The bearish trends in the Nigeria capital market threatening to cripple the Nigerian economy seems to be having effect on the real estate sector of the economy as well.

This is due to the fact that land and property owners have refused to sell off their properties for fear of not being able to invest in the stock market….. Full Article: Source

Competitive mortgage lending

Posted on 29 October 2008 by Laxman  |  Email |Print

From FT: The most competitive mortgages came from HSBC during the third quarter of this year, with only Yorkshire Building Society coming close as a rival, according to analysis by Mform mortgage company.

The other lenders to make up the top five in the most consitstently competitive lenders were Nationwide, Newcastle Building Society and the Halifax….. Full Article: Source

Fewer defects in new build properties in Spain

Posted on 29 October 2008 by Laxman  |  Email |Print

From New properties in Spain have fewer defects as buyers become more aware of their rights and are prepared to challenge developers, according to a new report.

The top two defects found in a survey of 700 new properties built by 51 developers between April 2007 and December 2008, were walls and ceiling defects (39%) followed by tiling (35%) especially levels and damage….. Full Article: Source

Canada: Reits face credit squeeze, analyst warns

Posted on 29 October 2008 by Laxman  |  Email |Print

From The prosperity and growth of Canada’s lodging real estate investment trust sector is “at risk” because of reduced access to capital, according to a report from Blackmont Capital analyst Trevor Johnson.

He notes lodging sector trusts usually use a debt to equity ratio of 45% to 70% to finance acquisition growth but that type of credit is just not available today….. Full Article: Source

Gulf property developers gear up to transform Tunisia’s capital city

Posted on 29 October 2008 by Laxman  |  Email |Print

From AFP: Armed with a mass of petrodollars, Gulf construction companies stand at the vanguard of a property boom in Tunisia, which is opening itself up to foreign investors.

Diggers are busy tearing up the wider Tunis area, which is braced for vast urban development, as the government tries to boost economic growth to offset the country’s spiralling unemployment. The largest project, launched in September and christened “The Mediterranean Gate,” will house Africa’s tallest tower according to Farhan Faraidouni, the head of Sama Dubai property development company, a subsidiary of Dubai Holding….. Full Article: Source

Now is time to buy listed real estate

Posted on 29 October 2008 by Laxman  |  Email |Print

From FT Adviser: Now is a “once in a lifetime” opportunity for investors to purchase cheap, listed real estate, according to Simon Hedger, senior portfolio manger at Principal Global Investors.

As the credit crisis came into full effect, listed real estate in the UK and Western Europe has fallen by as much as 60 per cent, but is now on the cusp of a recovery, according to Hedger….. Full Article: Source

Vanke posts 13% profit drop as property market slows

Posted on 29 October 2008 by Laxman  |  Email |Print

From China’s largest real estate developer by market value, Vanke, has reported third-quarter profit down by 13.4 percent from the same period last year due to a slowing housing market.

The Shenzhen-listed company said it would be impossible to reach its annual target of a 15-percent net profit rise from 2007’s 4.84 billion yuan (708 million U.S. dollars). The third-quarter profit of 2008 was 215 million yuan (31 million U. S. dollars)….. Full Article: Source

AXA freezes three mortgage funds

Posted on 29 October 2008 by Laxman  |  Email |Print

From AXA New Zealand has frozen three mortgage funds worth $225 million in a bid to prevent a run on its funds.

It has frozen the funds for 30 days in response to fears that people will withdraw their funds to switch to investments covered by the Government’s deposit guarantee scheme. At present, most managed funds are not included in the scheme….. Full Article: Source

Credit crunch hitting French property market

Posted on 29 October 2008 by Laxman  |  Email |Print

From The appeal of the French natural landscape, the cuisine and fantastically laidback lifestyle has been luring Britons across the Channel for years.

France is still one of the most visited nations by us Brits, and what’s more it’s a country that so many of us love with a lasting passion that we actually want to make a more permanent home there….. Full Article: Source

Australia: Mortgage funds should become banks if they want guarantees

Posted on 29 October 2008 by Laxman  |  Email |Print

From Australian Prime Minister Kevin Rudd has suggested that if mortgage funds want a guarantee on investor deposits, they should apply for banking licences.

But Mr Rudd remains firm on excluding “market-linked products” in general. Deposit guarantees are a hot topic for mortgage fund managers across the Tasman, where around $A24 billion of investments in Australian mortgage funds have been frozen to stop investors withdrawing their money….. Full Article: Source

Kenya: Property market now faces a bubble burst

Posted on 29 October 2008 by Laxman  |  Email |Print

From Kenya’s classiest houses are set to suffer falling prices for the first time in a decade as inflation, falling remittances and tighter mortgage terms squeeze cash out of the market.

Property marketers say apartments in Nairobi’s leafy suburbs and build-to-sell bungalows in Mombasa may be hit hardest, as global economic meltdown hits Kenyans abroad, limiting their participation in the local market….. Full Article: Source

Mortgage options plummeting

Posted on 29 October 2008 by Laxman  |  Email |Print

From UK Press: The number of different mortgage deals available for people with only a 5% deposit has dived by nearly 50% during the past week.

There are now just 40 home loans available for people borrowing up to 95% of their home’s value, down from 75 just a week ago - a 47% fall. There has also been a steep drop in the number of 90% deals on the market, with these falling to 261 now from 324 last week….. Full Article: Source

House prices will take years to recover from slump

Posted on 29 October 2008 by Laxman  |  Email |Print

From House prices will not reach the 2007 levels at which they peaked, until 2013, the Centre for Economics and Business Research (CEBR) has announced.

The centre has predicted that prices will continue to fall, reaching their lowest in 2009, and decreasing in value by 25%, resulting in 2.5m homeowners facing negative equity….. Full Article: Source

REITs are worth it in the long-term

Posted on 28 October 2008 by Laxman  |  Email |Print

From IPE: Real Estate Investment Trusts (REITs) are still solid, long-term investment choices despite their recent poor returns, according to Standard & Poor’s (S&P) latest global property and REIT report.

Financial data provider S&P has unveiled data showing REIT yields increased in the third quarter of 2008, as Asia-Pacific REITs recorded the highest yield of 8.7%, while the US REITs generated a lower yield of 5.23%….. Full Article: Source

UAE property prices set to fall

Posted on 28 October 2008 by Laxman  |  Email |Print

From FT: Property prices could fall in the United Arab Emirates but local banks would be able to handle the long-expected downturn, the country’s central bank governor said.

“A real estate correction could happen, but UAE banks are cushioned… the banks are safe,” Sultan Nasser al Suweidi, the central bank governor, said at a conference held by the Arab Monetary Fund in Abu Dhabi, the capital of the UAE….. Full Article: Source

US: As home prices fall, sales rise

Posted on 28 October 2008 by Laxman  |  Email |Print

From Single-family homes sales jumped 8.5 percent in September compared to the same time a year ago, according to The Warren Group. The September increase was the first in 11 months.

Despite an uptick in sales, year-to-date median home prices are off by 14.3 percent, according to the company, which tracks the data. A total of 30,983 homes were sold from January through September compared to the same period last year when 36,130 homes were sold….. Full Article: Source

World’s next great cities

Posted on 28 October 2008 by Laxman  |  Email |Print

From Forbes: Thirty years ago, Shenzhen, China, was little more than a fisherman’s port. A decade ago it had blossomed into a small regional shipping center.

Today, it handles more container ships than Dubai, New York and Tokyo combined, according to data from the American Association of Port Authorities. It also boasts China’s second-largest stock exchange….. Full Article: Source

Dubai property market on edge amid global slowdown

Posted on 28 October 2008 by Laxman  |  Email |Print

From Dubai’s long, lucrative property boom is hitting rough times, with property-flipping speculators and hopeful foreign buyers increasingly worried as easy oil money and quick profits dry up.

It’s far from clear, though, if a bubble has truly burst or if the once red-hot market is simply cooling. “I saw fear take over,” said Timur Usmanov, a real estate agent for Dubai-based Monshaat Properties, about investors who recently tried to flee the market just two or three years after diving in….. Full Article: Source

Chinese property stocks plunge to near all-time lows

Posted on 28 October 2008 by Laxman  |  Email |Print

From IHT: Chinese property stocks plunged to near all-time lows Monday, with Guangzhou R&F sliding 22 percent and China Overseas Land down almost 13 percent, despite government steps unveiled last week to prop up the housing market.

Analysts and dealers said they had not spotted any changes to the fundamentals of the companies or new moves by Beijing. “Investors might just be throwing in the towel,” said Eric Wong, an analyst with UBS….. Full Article: Source

Canada:Real estate industry braces for downturn

Posted on 28 October 2008 by Laxman  |  Email |Print

From Tough times lie ahead for Canada’s residential real estate market next year, with a brighter picture for 2010, industry officials predicted.

A crowd of more than 1,000 real estate agents and brokers gathered at the Toronto Real Estate Board’s (TREB) annual general meeting Monday for a pep talk aimed at worried salespeople, many of whom have yet to live through a downturn….. Full Article: Source

London-listed property funds squeeze Bulgarian projects

Posted on 28 October 2008 by Laxman  |  Email |Print

From Two funds listed on the alternative investment market (AIM) of the London Stock Exchange said they would slash real estate investments in Bulgaria because of the ongoing financial crisis.

Black Sea Property Fund gave up its Evergreen gated complex that it planned to build in the country, while Bulgarian Land Development (BLD) has slashed the number of apartments it agreed last year to buy in the Paradiso Verde 2 complex in the Bansko mountain resort….. Full Article: Source

October 2008
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