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Real Estate Briefing 01.Oct 2008

US house prices in sharpest ever fall
Turbulence for owners of foreign property
Commercial property 'Crippled' says CBRE
Chinese property prices could slump
Is now a good time to buy a home?
Russian developers will suffer, says Fitch
Real estate impact to be 'massive'
What will we do when housing market soars again? And it will
US housing woes spread to wealthy
Mortgage lending down 95 per cent
Moscow super-rich pour millions into luxury homes
Dubai property sales to top £100 billion?
UK: Residential development land value falls by a third
World house prices falling
Aberdeen restructures at the top
Villa prices in Dubai rising faster than apartments
B&B fallout will hit mortgages and take prices down further in UK property market
UK: House sellers have to drop prices by as much as 12.5% to get a sale
European REITs rally amid financial market strains
Canada close to buyer's market, but not a bust
UK mortgage lending association abandons short term property price forecasts
Crunch time for green housing
Treveria sees net asset value drop
October may be decisive for China’s real estate industry
Costa Rica real estate market proves to be as advanced as older markets
Decline in new listings brings balance to real estate market
Slide in world property prices alerts investors looking to buy overseas
Hong Kong property tipped to fall
Malaysia: Property market remains soft
Dubai property market isn’t immune to credit crunch
Romanian residential market still has 40% profit
Phillipines: Real estate buyers told to be careful
Property sales surge reported in French region

Posted on 01 October 2008 by Laxman |  Email |Print

From Guardian: House prices in the US posted their sharpest ever annual decline in July, with prices in cities such as Las Vegas falling by almost 30%. According to the Standard & Poor’s/Case-Shiller 20-city housing index, prices were 16.3% lower in July than a year ago — the largest fall in the survey’s eight-year history.

A second measure, the 10-city index, dropped 17.5%, the biggest decline in its 21-year history and the 10th consecutive monthly fall. S&P Index committee chairman David Blitzer warned he saw “no evidence” that the worst housing recession in a generation had reached the bottom….. Full Article: Source

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From Independent: Five years ago, it was easy to predict where the hot property markets would be – you simply had to keep an eye on new airline routes. From Eastern Europe to South America, each time a low-cost or charter company announced that it was launching a service to some previously unknown or unaffordable destination, there was a rush to promote property there.

Investors were encouraged to sink funds into the Caribbean and Florida or obscure corners of France and Italy on the back of cheap and plentiful air travel. Buy-to-letters were enticed to cash in on bargain flights and the predicted wave of tourism such services would also bring. Even if a location was served by only one flight a day, estate agents often claimed this was a sign the destination was up-and-coming…. Full Article: Source

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From Bizplus.ie: Property consultants CB Richard Ellis said that conditions in the Irish commercial property have continued to deteriorate in recent months against a backdrop of weakening economic indicators and financial market turmoil.

According to the October bi-monthly report from CB Richard Ellis, transactional activity is continuing in some areas of the property market with some occupiers finding it an opportune time to be concluding lease negotiations, considering the relative value on offer in the current climate. The property consultants added that some landlords have started to accept slightly lower headline quoting rents in addition to inducements such as rent-free periods and break options to secure lettings in their schemes. However, many occupiers are postponing expansion or re-location decisions until such time as economic conditions improve….. Full Article: Source

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From Homesoverseas.co.uk: Residential property prices in China could plummet by as much as 50% over the next decade, a lead property researcher has projected. Ling Xiuli, a senior researcher with PICC Asset Management Company Ltd, said: “House prices in big and medium-sized cities may collapse at any time, and insurance funds should avoid entering this sector unless housing prices are adjusted.”

Xiuli is also concerned that the disparity between incomes and property prices has become too great, adding: “The house price to income ratio in China is unprecedentedly high in world economic history, and the housing price bubble has hit its peak.”…. Full Article: Source

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From WSJ: For some people, yes. If you… have access to credit; have fat cash reserves; aren’t already over-exposed to real estate; have a secure job or income stream; expect to hold the property for at least two years; then now is an excellent time to buy.

Everyone else should take a breather. The reason: It’s still too early to tell whether the dire predictions many government officials and economists are making about the potential collapse of our economy without a bailout are crying wolf–or if the wolf is really at our door….. Full Article: Source

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From Property Week: Russian developers are likely to be among the worst-hit by a deteriorating financing environment, according to credit rating agency Fitch. Fitch blamed their woes on ‘a large share of short-term debt in their liquidity profiles, their often significant operational cash outflows, limited cash-on-balance sheet and a virtual absence of meaningful committed un-drawn facility headroom’.

Julian Crush, senior director in Fitch’s corporates team, said: ‘At a time when the Russian government has had to intervene to support domestic financial institutions and, with increasing question marks over the ability and appetite of all but the largest Russian domestic banks to maintain current funding levels to the real estate sector, liquidity risks associated with Russian property developers have never been higher’. …. Full Article: Source

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From Pionline.com: The credit collapse and the ensuing deleveraging from financial institutions are expected to have a colossal impact on the real estate investment market. If industry executives are right, fortunes could be made, but also the number of real estate investment managers will shrink because of the lack of available capital and portfolio returns might suffer.

“I don’t think anybody has lived through what we are living through right now unless they are 100 years old. The magnitude is so massive,” said Tim Ballard, chief investment officer of Buchanan Street Partners, a Newport Beach, Calif.-based real estate subsidiary of The TCW Group. “This will affect … job growth, consumption and other things. The S&L (savings and loan) collapse did not have nearly the same effect.” …. Full Article: Source

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From Scotsman: New house sales are at an all-time low, and mortgage providers have upped interest rates and increased the level of scrutiny that borrowers are subjected to – as well as insisting on larger deposits.

As one week has lurched into another, and we have heard the latest vision of doom and gloom, I have become increasingly concerned over commentary on two key aspects – house-price deflation and the spectre of negative equity, and the writing down by major housebuilders of the value of their land banks. Dealing with the latter point first, land banks, by their very nature, tend to be speculative holdings. ….. Full Article: Source

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From Telegraph: Foreclosures on homes worth more than $1 million (£500,000) have nearly doubled since last year and more than doubled on properties worth at least $2 million. Experts have warned that the crisis is certain to worsen as the effects of the job losses on Wall Street are felt on the property market.

So far, the worst hit areas have been “Sun Belt” states such as California, Nevada and Florida, where it is common to find luxury homes now on sale for half their price before they went into foreclosure….. Full Article: Source

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From Telegraph: The figures led to widespread calls for an interest rate cut as early as next week to reinvigorate the housing market. According to the Bank of England, mortgage lending in August fell by 95 per cent compared to the previous month - a drop fuelled by uncertainty over falling house prices and speculation over a possible stamp duty holiday.

There was further misery for homeowners yesterday when a series of lenders indicated they would be raising interest rates due to the turmoil in the money markets….. Full Article: Source

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From Economic Times: The world outside may be in the thralls of crisis, with house prices plunging, markets slumping and banks collapsing; but Russia’s cocooned super-rich can still spare 2.5 billion roubles ($99 million) for a Moscow townhouse apartment within strolling distance of the Kremlin.

Spurred by petrodollars and booming consumer confidence, Moscow’s real estate - where sky high prices can outpace Manhattan and London - has so far avoided following the local stockmarket’s downward spiral, which continued Tuesday…… Full Article: Source

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From Themovechannel.com: Analysts have predicted that by the end of 2008, Dubai will have seen property sales reach £100 billion. Undoubtedly, reaching a milestone of such magnitude can only further endorse this burgeoning market, however it is last years sales that steal the limelight; a year ago property sales to date were at £64 billion, this means that we have witnessed approximately a £36 billion increase.

Where else in the world, can boast such dynamic sales? Oliver Hickey UK and Ireland Sales Director for Profile Europe said, “Dubai has had a record breaking year and there are a number of reasons for this….. Full Article: Source

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From Property Week: Urban development land outside London has fallen by 33% over the past year and by 15% in the past quarter, according to Knight Frank’s new residential development land index. Greenfield sites have fared slightly better, with falls of 30% over the past year and 13% over the past three months.

Yorkshire and Humberside have been hardest hit, with land in worth around half last year’s value. The North-West is close behind, with drops of 41% and 36% reported for brownfield and greenfield sites respectively. Only well-located ‘oven-ready’ plots with planning permission continue to attract interest, but because these remain scarce, any offers are likely to include deferred terms and options….. Full Article: Source

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From Kyero.com: House prices are falling globally and there are signs that the situation is getting worse, recent research showed. During the year to the end of June the cost of property fell in 21 of the 33 countries across the world for which there is reliable data, according to property research group The Global Property Guide.

The group said the Baltic states, the United States, the UK and Ireland were leading the decline. House prices have dived by 33% in real terms in Latvia’s capital Riga, during the year to the end of June, while in Estonia’s Tallinn they have fallen by 14%….. Full Article: Source

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From Property Week: Aberdeen Property Investors has announced a series of changes among its senior management. The London listed fund manager, which grew considerably this year with the €110m (£86.4m) purchase of German open-ended fund manager Degi in January and the £109m purchase of Goodman Property Investors in May, will continue to be led by CEO Rickard Backlund.

But Jon Lekander, formerly chief investment officer at Aberdeen Property Investors, has been appointed as head of the combined indirect investment management team. He replaces the former managing director of Aberdeen Property Investors Indirect Investment Management, Anders Åström, and his deputy Tomas Otterud, who ‘have both decided to leave the enlarged property business’….. Full Article: Source

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From Property Wire: Villas in Dubai have grown in value twice as much as apartments, according to a new report. But apartments still offer the best rental yields, the report from Bahrain-based investment bank SICO highlights.

The upward trend in villa prices is expected to continue as they are in short supply and large numbers of bankers, lawyers, stock brokers and other finance workers moving to Dubai are pushing up demand. ‘This is a reflection of the preference for expatriate families to live in a villa rather than an apartment, with a garden, parking and independent access,’ the report says….. Full Article: Source

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From Property Wire: The fall out from the nationalisation of UK troubled bank Bradford & Bingley will further restrict the choice of lending in the property market, it is predicted. The most competitive deals are being pulled and the cost of mortgages will be increased. Until now B&B was offering the best buy-to-let mortgage deals.

Analysts are warning that between 400,000 and 500,000 of the 1.2 million outstanding buy-to-let mortgages in the UK are likely to require refinancing in the next 12 months. With the values of properties falling and the required rental cover needed to secure new borrowing rising, most borrowers will struggle to meet lending criteria, according to Ray Boulger, senior technical manager at mortgage broker John Charcol….. Full Article: Source

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From Firstrung.co.uk: Across the UK, houses are selling at an average of nine percent below the asking price with sellers in some regions being forced to accept as much as 12.5 percent discount off their advertised price, says RICS research…

As economic fundamentals continue to worsen, the gap between selling and asking prices is widening. In the North vendors are accepting the lowest offers - averaging 12.5 percent below the marketed price. Vendors in the North West, East Midlands, West Midlands and Wales are accepting offers averaging approximately 10 percent below but in London the figure stands at 8.5 percent….. Full Article: Source

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From Reuters: The EPRA/NAREIT Europe real estate index clung to positive territory on Tuesday as property equity investors refused to be spooked by bank failures and deadlock in U.S bailout talks. The index, which comprises the elite of Europe’s real estate investment trusts (REITs), slumped to 2,022 points before rallying to 2,110 points by 1141 GMT, flouting expectations of a share sell-off after talks on a $700 billion U.S bank rescue plan hit the skids.

Franco-Dutch retail specialist Unibail Rodamco — Europe’s largest property company — climbed 1.35 percent to 140.4 euros, while rival Land Securities (LAND.L: Quote, Profile, Research), the UK’s biggest quoted property firm, rose by 2.5 percent to 1,248 pence….. Full Article: Source

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From Financial Post: The Canadian housing market is close to becoming a buyer’s market for the first time in more than a decade, but it won’t be a bust, according to a report by CIBC World Markets. Its projection that house prices will likely fall another 5% to 7% was issued as the real-estate industry was also reporting the number of homes being put up for sale retreated in August from the record levels of the previous four months.

“With new listings down from the recent peak, the resale housing market is stabilizing in most provinces,” the Canadian Real Estate Association said in its latest monthly market report, showing new listings falling 5.4% in August….. Full Article: Source

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From Property Wire: Trying to predict property prices in the UK in the short term is futile in the current economic turmoil, according to the country’s trade association for mortgage lending industry. The Council of Mortgage Lenders has admitted that its May forecast of a 7% fall this year is wide of the mark and says it does not expect the market to recover from its current slump before 2010.

It is now abandoning attempts to predict house price movements because of the uncertainties that surround the market. Its members account for 98% of residential mortgages in the UK….. Full Article: Source

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From Guardian: Just 12 months ago, eco-towns were at the forefront of the government’s plans to build more new homes and reduce carbon emissions. But now, with the credit crunch biting hard and the housing market in real trouble, their future direction looks uncertain. Ministers should shift their green focus to existing buildings — both residential and commercial — which together account for around half of the UK’s carbon emissions.

Gordon Brown first announced ecotowns just over a year ago — before the housing market entered its downturn. Fifteen sites have been proposed, and up to 10 are due to be shortlisted. Five are planned by 2016, and up to 10 by 2020, with each containing between 5,000 and 20,000 homes. But those numbers now look difficult to achieve — as does the government’s overall target of three million new homes….. Full Article: Source

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From FT: Dawnay, Day Treveria, the Germany-focused property management fund, is to change its name following a 19.2 per cent fall in net asset value per share to 91.2 cents. The company’s fortunes have nosedived because of crumbling confidence in the real estate sector as well as its links with the fast-dissolving Dawnay, Day group.

Now directors have said they want to make clear their independence by ditching the Dawnay, Day name altogether. Shareholders will be asked to approve the new name, expected to be simply Treveria, at a general meeting….. Full Article: Source

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From Chinastakes: The looming National Day holiday in October may be crucial for China’s real estate market. In an attempt to kick-start stagnating real estate sales, major cities will be holding real estate expos during the holiday, and buyers will be watching for future price signals.

This fall’s Shanghai Real Estate Trade Fair is widely expected to be the beginning of a new round of price cuts. In China, so-called “golden September and silver October” are a traditionally good season for the sales of all kinds of commodities. But in September this year, Shanghai’s real estate sales volume has continued to drop. In July, trading of newly built housing slumped by 69% over the same month last year, and the average price fell by 24% over the previous month, a record monthly decrease….. Full Article: Source

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From Prminds.com: The Costa Rica real estate market has been in the spotlight for approximately ten years now, but the industry as a whole has matured quickly and offers services comparable to real estate markets that have been active for years.

The present interest in Costa Rica as a desirable investment, retirement, and vacation location has prompted those in the Costa Rica real estate profession to rapidly develop their skills and marketing techniques. The Costa Rica real estate market is booming, especially in the Central Pacific area. Many foreign retirees are selecting Costa Rica as their retirement location, and a growing number of investors are searching for Costa Rica real estate deals…… Full Article: Source

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From Cbc.ca: The number of homes listed for sale across Canada fell in August, indicating the real estate market has reached a comfortable balance, figures from the Canadian Real Estate Association show. In August, there were 74,993 new listings nationally, compared with 80,147 in July. That represents a monthly drop of 5.4 per cent, and a 3.4-percent decline year over year.

“Things are not as bad as some would have us believe. They’re not bad at all,” Gregory Klump, CREA’s chief economist told CBCNews.ca….. Full Article: Source

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From Fly-2let.co.uk: Cash rich Fly to Let investors will be studying the slide in the world’s housing markets to see if there are opportunities to snap up bargains in places where property prices are most likely to rise again in the near future.

According to Globalpropertyguide.com the tumble in the financial markets caused a fall in inflation-adjusted house prices in 21 out of 33 countries during the year to end-Q2 2008. The Baltics, the US, the UK and Ireland led the global decline but the biggest house price declines took place in Latvia, previously a leader of the global house price boom. House prices in Riga have fallen by 21.23 percent in nominal terms during the year to end-Q2 2008, and 33.08 percent in real terms…… Full Article: Source

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From Forbes: Hong Kong property stocks slid for a second day in a row on Tuesday, as mortgage rate rises deepened gloom over the city’s housing market, with new apartment sales slowing to a trickle.

A spike in Hong Kong’s interbank rate, as the money market was sapped of liquidity, prompted HSBC to hike its mortgage rate in the city by 50 basis points on Monday and other banks were set to follow suit. The move jolted many analysts into changing their tune on the Hong Kong property market, with prices now tipped to drop by anywhere between 10 and 20 percent in the next year….. Full Article: Source

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From Bernama: The property market in Malaysia is still soft as higher inflation and the gloomy outlook for the global economy has impacted buyer sentiment. “People are taking a wait and see attitude,” Real Estate and Housing Developers Association (REHDA) president, Datuk Ng Seing Liong said.

The recent government incentives for the property industry has not helped much to spur buyer sentiment, he told Bernama recently. “Probably, there should be more incentives such as the stamp duty waiver for the transaction of houses costing RM1 million and below,” he said….. Full Article: Source

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From Homesoverseas.co.uk: Reports that the Dubai property market won’t be affected by the global credit crunch have been challenged by market analysts, as fears grow that Dubai’s property boom is fast running out of steam, as a consequence of the global liquidity crisis.

Oliver Hickey, sales director of Profile Europe, this week said that “Dubai has not been affected by the global credit crunch,” nor does he expect it to be in the near future. This, he says, is because the majority of people buying property in the emirate are either cash buyers or borrowing money at a low loan-to-value–ratio…… Full Article: Source

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From Financiarul.ro: In Romania, profit in real estate can no longer reach 40%, but an efficiency rate of 40% is enough for serious real estate business, said in a study Andrei Apetrei, general manager of the company Quantum Management and Consulting.

After a few months when the Romanian residential market was dominated by uncertainties, with sudden changes in the mood of buyers and in the pace of sale and purchase, players look calmer now, the uncertainty in the real estate is smaller and smaller. According to a QMC study, the effects of the global financial crisis have been felt in Romania, but they have made us understand that such fluctuations are normal and are aimed at maturing the market….. Full Article: Source

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From Sun Star: Buyers of real-estate properties are warned to be wary doing transactions because they might be dealing with brokers who do not have licenses to sell issued by the Housing and Land Use Regulatory Board (HLURB).

The warning was issued following the HLURB-Cordillera Administrative Region (CAR)’s issuance of the list of projects done by subdivision developers or individual, but without certificates of registration or licenses to sell….. Full Article: Source

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From Propertyshowrooms.com: The French region of Pyrenees Atlantiques is seeing a sudden surge in sales of properties valued between EUR200,000 and EUR350,000 (GBP277,000), it has been claimed.

French property specialists firm VEF has stated that one of its partner agents in the region has recorded such an upsurge, leading it to suggest that those thinking of buying a property in the region within this price range should do so now. VEF stated that at present France is undergoing a property price correction, but this could mean prices going up or down depending on the conditions in each region….. Full Article: Source

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