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Real Estate Briefing 09.Oct 2008

Russian investors putting their money into international property
America's luxury foreclosure capitals
Falling property prices sees European funds’ lives extended
UAE commercial property market slowdown
IMF: UK recession coming and house prices to fall up to 30%
Global financial crisis really hits property market in India
DIFC invests $ 817 mln in Dubai Pearl
House price falls spur confidence in pensions
Philippines: REITs to encourage investments in stocks
US home prices to drop 8.3% in '08
Ireland: Average house price fell 11% - survey
China market regulation is ‘new risk to property investors’
New Spanish property index is laughable
Hotel REITs drop
India: PE deals in realty space may lose steam
Axa launches overseas property fund
Financial insecurity may slow Toronto condo construction
McCain mortgage buyout too expensive, says Obama
Liquidity fears and merger rumours spread around Middle East markets
Indian realty funds find sweet spot as financing becomes hard to get
Residential property prices: "worst fall in 16 years"
Brazil Fund Funcef to invest in real estate as stocks plunge
Sydney property buoyant in slump
Study shows more European property funds defer liquidation
Pacific Star taps Mideast for US$1b
As world's economy crumbles, Dubai keeps on building
How does global financial crisis affect Estonian real estate market?
Investment opportunities rise as UK house prices slide
Honolulu commercial real estate market ranks high
Riyadh house prices rocket 90 percent
US cities offer incentives for green property owners
UK: Construction barometer hits new low
Sicilian property may be boosted by golf tourism growth
Turkey still a good property market

Posted on 09 October 2008 by Laxman |  Email |Print

From Property Wire: Russians are investing heavily in overseas property buying in the French Riviera, Spain and Central London. As the Russian stock market continues to suffer they are taking their money out of stocks and shares and looking for prestigious properties to buy as a long term investment.

But they have quite specific requirements, according to real estate agents. Access to an international airport, security and modern facilities all matter….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Forbes: Just because a neighborhood is full of swimming pools and luxury cars doesn’t mean the guy around the corner is making his mortgage payments. Take plush Laguna Niguel, Calif. This South Orange County community has 61,891 residents and borders glamorous beach cities like Laguna Beach and Dana Point, but it has the highest number of bank-owned properties–210–of the ZIPs we examined.

These foreclosures have likely contributed to the decline of the area’s median home price, which has fallen by $52,750, or 7.2%, to $679,500 in the last year….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Property Week: Fund managers are opting to extend the lives of their European non-listed property funds rather than sell assets into a falling market, a survey by the European Association for Investors in Non-listed Real Estate Vehicles (INREV) has shown.

Of the funds due to terminate between 2008 and 2010, 29% are planning to liquidate compared with 52% in 2007, INREV’s Fund Termination study for 2008 said. In comparison, 59% of fund managers are planning to continue the life of their funds….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Arabian Business: Commercial real estate markets in Dubai and Abu Dhabi witnessed a slight slowdown during the third quarter, with trading in August and September relatively flat, realtor Better Homes said in a report on Wednesday.

Better Homes put the lack of activity in the markets down to a seasonal slowdown and the Dubai government’s ongoing corruption probe, which it said had “tainted a negative picture on the real estate market”….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Belfasttelegraph.co.uk: The International Monetary Fund (IMF) became the latest body to predict a recession in the UK, when it radically downgraded its forecasts for British economic growth yesterday, and declared house prices 20 to 30 per cent overvalued.

The IMF’s biannual World Economic Outlook report said that “the world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s… The major advanced economies are already in or close to recession”….. Full Article: Source

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From WSJ: The global credit crisis is starting to squeeze India, threatening in particular a hallmark of its new middle class: the property market. Property prices have been dropping, mortgage rates rising and consumers turning cautious.

In this climate, and during a big festival season, some developers are anxiously dangling inducements before would-be buyers, from free parking and jewelry vouchers, to a new BMW for the purchase of a luxury flat selling for some $600,000. Yet, even the free cars aren’t driving sales….. Full Article: Source

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From AME Info: Dubai DIFC Investments, the investment arm of the Dubai International Financial Centre (DIFC), has announced that it has invested more than Dhs3bn ($817m) in the Dubai Pearl project.

The investment was made through DIFC Investments’ real estate fund, which was launched recently to tap into the booming property sector in Dubai and the UAE. The multi-billion dirham fund seeks to create a portfolio of quality real estate acquisitions that will yield positive return on equity as the property sector continues to grow….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From FT: Falling house prices have seen a decline in people’s faith in property as an important way of saving for retirement, according to a survey by the National Association of Pension Funds.

In September just one in five of the 1,200 employees questioned in the association’s employee survey rated property as “the best way to save for retirement”. In February that figure was a quarter, and studies from two or three years ago, although compiled on a different basis, showed a third of the population saying they were saving in property to provide their retirement income – even though, in spite of the buy-to-let boom, only about 2 per cent of the working age population owned more than one home….. Full Article: Source

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From Bworldonline.com: Proponents of real estate investment trusts (REIT) are hoping that the new investment product will entice Filipinos — less than 1% of whom invest in the stock market — to let go of their cash even during hard times.

Already experiencing phenomenal growth in Asia-Pacific, the REITs are said to benefit both the investor and the company. By investing only in profitable property companies, REITs are said to be shielded from volatile swings of the property market….. Full Article: Source

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From Inman: Sales of U.S. resale homes are projected to fall 10.9 percent this year compared to 2007, with the median price dropping 8.3 percent, according to the latest National Association of Realtors forecast.

That forecast has been revised downward several times during the course of the year in response to the nation’s economic downturn — back in January, the group has predicted that sales of resale homes would rise slightly this year and that prices would hold steady compared to 2007….. Full Article: Source

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From Irish Times: The national average house price fell by almost 11 per cent to €312,500 in the last year, according to a new survey. In the past three months, asking prices have fallen by 3.8 per cent across the country, as sellers remain slow to react to the new economic realities.

The latest Daft.ie house price report shows that the slowing property market has hit counties Clare and Cork the most, with asking prices falling 7.8 per cent and 7 per cent respectively in the third quarter, while in Roscommon, Tipperary and Leitrim, prices fell by more than 6 per cent. South Dublin county was the only region out of the 35 covered across the country to report an increase in asking prices, with the average house price increasing by 1.2 per cent to €600,874…… Full Article: Source

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From Bizchina-update.com: China should “continue to be relatively unaffected by global economic uncertainty, with strong economic growth and foreign investment continuing,” according to the new Asia Pacific Investment Report by Cushman & Wakefield.

The report, in association with the MIPIM Asia property conference to be held in Hong Kong in November, says the RMB is “expected to break 6.50 to the dollar in the next 12 months.” In the property sector, while developers are currently affected by a squeeze on financing, the report expects “the pace of development to continue unabated this year with 2.4 billion sq. m. of residential space currently under construction and many more projects under planning.”… Full Article: Source

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From Homes Overseas: Analysts are ridiculing a new index of residential property prices in Spain, which was supposed to bring some clarity to the market. According to the data released by the National Institute of Statistics, property prices in Spain fell by just 0.3% from June 2007 to June 2008, despite the widespread reports that the market is in the midst of a sharp decline.

The index said resale prices fell 4.9% in the year, but new home prices actually appreciated 5.3% - which is highly unlikely, seeing as there are thousands of vacant homes currently on the market….. Full Article: Source

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From Forbes: Shares of most hotel real estate investment trusts dropped Wednesday afternoon - some posting percentage declines in the double digits - as a pair of analysts issued downbeat outlooks for the sector.

In a note to investors early Wednesday, KeyBanc Capital Markets analyst Dennis Forst said that lodging REITs “need a tourniquet.” Hotel analysts have been significantly gloomier about the industry since Marriott International Inc. issued weak third-quarter results last week….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Economic Times: Private equity deals in real estate may increasingly become scarce in the short term, deepening crisis for cash-starved property firms. PE funds are sitting on a pile of cash but not willing to commit funds as they feel they would get better deals in the near future.
“Given the volatility in the market, PE funds in general are not taking any decision on investments. We will be better placed to decide once the dust settles down on the market,” says the head of a domestic PE fund, which expects to invest a few hundred million dollars in real estate….. Full Article: Source

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From The Australian: Financial services group Axa, which moved out of listed property, has done an about-turn, launching a fund to invest in overseas property stocks. Axa chief investment officer Mark Dutton said the new fund offered Australian investors an opportunity to diversify.
“It makes sense in the long term to invest in assets in other countries,” Mr Dutton said. With seed investment from Axa, the fund had invested $90million in 91 global real estate investment trusts….. Full Article: Source

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From Cbc.ca: Some condominium developers in Toronto are starting to feel the effects of the global credit crunch, and analysts say that could put some projects in jeopardy. A condo market analyst says 30 per cent of the 120 projects currently being marketed in Toronto are teetering because they can’t get financing.

Projects already being built don’t appear to be in any danger of grinding to a halt, said Jane Renwick, executive vice president of Urbanation, a condo consulting firm….. Full Article: Source

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From Topr Realty News: Barack Obama’s campaign on Wednesday rejected John McCain’s plan to buy up 300 billion dollars of bad home loans clogging the US economy as too expensive and an example of “erratic” leadership.

The Republican nominee unveiled the idea in his presidential debate clash with Democratic rival Obama Tuesday, in an attempt to change a trajectory of a race that seems to be sliding away four weeks before the election. At the time, the Obama campaign said the plan was nothing new and argued the Democrat had already suggested something along similar lines….. Full Article: Source

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From Property Wire: Optimistic property developers in the Middle East are unveiling billions of pounds worth of new projects in what is seen as a smokescreen to what is actually happening in the region’s markets.

In Dubai the heads of real estate and construction companies are using the glitz of Cityscape, the world’s leading property business show, to unveil luxury developments, almost vying with each other to be the biggest and the best….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Live Mint: Being virtually the only source now, these funds are calling the shots, getting a better deal for themselves. As funds from banks and capital markets become more difficult to access, property developers are increasingly looking towards real estate funds to carry their projects forward.

“Earlier, there was money chasing assets. Now, there are assets chasing money,” said Ved Prakash Arya, managing partner of Mumbai-based Milestone Capital Advisors Ltd, that manages $ 600 million across three domestic and one offshore fund….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Real Estate Web: High inflation means your money has been much better off in a bank than in property lately - new Absa stats. Absa’s latest house price index figures show real property prices, where inflation is taken into account, dropping by more than 10%. That means your money, lately, has been much better off in an interest-bearing bank account than residential bricks-and-mortar.

The Absa House Price Indices for September 2008 show middle-segment price growth at a nominal 1,5% year-on-year last month (2,1% in August). In real terms prices were down by 10,2% year-on-year in August, noted the bank’s senior property analyst Jacques du Toit….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Bloomberg: Funcef, Brazil’s third-biggest pension fund, plans to invest in real estate and infrastructure projects as it considers diversifying away from equities after the Bovespa index’s 37 percent plunge this year.

“We will need to rethink our investments policy for next year,” said Funcef President Carlos Lacerda whose fund manages the equivalent of $14.3 billion.Funcef, the pension fund for workers at state-owned bank Caixa Economica Federal, plans to invest 1.2 billion reais ($504.8 million) in roads, real estate and energy to take advantage of growth in Latin America’s biggest economy….. Full Article: Source

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From SMH: Sydney is unlikely to experience the house price collapses affecting other international cities but the least expensive suburbs will outperform the top ones this year, says Shane Lee, the director of economic and market analysis at Citigroup.

“The credit crunch is having a significant impact on the Australian financial services sector which is now in recession. This poor performance is likely to weigh on the Sydney housing market over the next year as income growth in the industry falls,” Mr Lee said…… Full Article: Source

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From Reuters: More unlisted European property funds aim to extend planned expiry dates to avoid selling assets into freefalling property markets, a study by industry body INREV showed. INREV’s Fund Termination Study 2008 showed almost 60 percent of real estate funds due to wind up in 2008-2010 are set to be extended in an attempt to protect returns until investor demand for property recovers.

Just 29 percent of funds due to wind up in 2008-2010 plan to liquidate when originally planned, compared with 52 percent of funds in 2007, the report showed. “Currently, the flexibility of a one-to-two year extension is attractive from a timing standpoint as it delays the need to decide whether to sell assets into a market where capital values are falling,” Andrea Carpenter, INREV Research director said….. Full Article: Source

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From The Star: Pacific Star, a Singapore-based property investment manager, said it hopes to raise over US$1bil from Middle Eastern sovereign funds for investments into Asia despite falling real estate prices.

“Middle East investors were focused on Europe and the United States in the past, but Asia is increasingly on their menu,” said Knut Riesmeier, the newly appointed president of Pacific Star’s Qatar office, its first in the Middle East…… Full Article: Source

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From Guardian: Sharif Shafei, PR supremo for a leading Dubai-based developer, can certainly talk the talk. Words like brand, vision, iconic and ambition trip easily off his tongue – all to convince you that it’s business as usual in the world’s hottest real estate market.

Shafei, an engaging Egyptian-Canadian, works for a company behind huge construction projects in neighbouring Saudi Arabia, Qatar and Morocco, all cashing in on an oil-driven boom and Dubai’s reputation for cutting-edge architecture, boundless imagination and high returns….. Full Article: Source

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From Baltic Business News: Financial crisis and downturn of real estate prices mean that every loan kroon sent to real estate market by banks is linked with notable risk – value of property which is guaranteeing the loan is lowering and it’s very complicated to sell when problems occur. So for banks is more reasonable to limit the loan giving.

Roughening the loan conditions is bounding the mass of money moving in the market and therefore cuts the amount of deals even lower. Smaller amount of deals makes prices go even lower….. Full Article: Source

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From Offplanpropertyexchange.com: The prices of UK homes for sale have now been falling for more than a year, according to a poll by a leading estate agency. Chesterton said its ‘Poll of Polls’ survey had shown the average price of a residential home in England and Wales had dropped to £184,333.

The firm added the new figures meant prices have now been falling for 13 months in a row, with prices now sliding across all regions. Bigger cuts are being seen in the South, with prices dropping by one per cent in London and the South West last month….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Honoluluadvertiser.com: Moody’s Investors Service ranked Honolulu as the strongest metropolitan commercial real estate market in the nation during the third quarter. On a scale of 0 to 100, Honolulu scored 81, which was an improvement from 79 in the second quarter during which Honolulu tied for first with New York City.

Oklahoma City and San Francisco tied for second with scores of 74. The worst market was Trenton, N.J., at 27….. Full Article: Source

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From Arabian Business: House prices in Riyadh rocketed by as much as 90 percent in the first half of this year, Global Property Guide said.The property information firm said Saudi Arabia was currently going through a real estate boom, fuelled by record oil revenues, with house prices in Riyadh and Makkah seeing the most significant jump.

Global Property Guide said the price of land in the Saudi capital currently ranges from 400 riyals ($107) per square metre to 4,000 riyals per square metre, compared to just 156 riyals per square metre five years ago….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Property Showrooms: Those buying property in the USA may get incentives to install a green roof. Such roofs, typically covered with plants such as water absorbent sedum, are credited with saving energy through their insulation qualities, improving urban air quality and thus preventing the urban heat-trap effect, plus limiting storm water run-off.

According to Columbia University researchers, the energy saving from having such a roof is around 15 per cent, while senior resident fellow for sustainable development at Washington’s Urban Land Institute Ed McMahon said the extra cost of installing such a roof would be recouped in five years….. Full Article: Source

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From Constructionnow.co.uk: Construction product manufacturers have reached another new low by returning a figure of just 26 in the latest Ernst and Young, Construction Products Association, Activity Barometer, compared to the 50 mark, which represents ‘no change’.

This is the lowest result since the barometer started 15 quarters ago and a sharp downturn compared to the second quarter of 2007, when the barometer peaked at 80. Construction and materials manufacturers have been suffering since the beginning of the economic slowdown in August 2007 and the optimism within the industry in recent years has been fading fast…… Full Article: Source

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From Property Showrooms: Those investing in property on the Italian island of Sicily may find that that golf tourism provides a boost to the value of their investment in the next few years. Until recently the Il Picciolo course at the Palmerston Etna Resort was the only golf centre on the island.

However, the paper notes, a second one has now been opened near the cathedral town of Cefalu and three more are planned, including a 36-hole Gary Player resort. Should Sicily grow as a golf tourism destination, those with property investments on the island may see an increase in value in their properties….. Full Article: Source

Posted on 09 October 2008 by Laxman |  Email |Print

From Homesgofast.com: As much of Europe and the United States wonder what will come next in the tumultuous financial and real estate markets, Turkey is providing a bit of calm in a sea of unrest. House prices and sales have fallen in the US, England, Spain and other countries, but Turkey is looking for continued growth in the years ahead.

Deutsche Bank predicts 5-6% economic growth per year over the next 10-15 years, so the economy will continue to produce and grow. Because of Turkey’s strict banking laws, the country has been relatively unscathed by the ongoing turmoil in financial markets…… Full Article: Source

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