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Real Estate Briefing 10.Oct 2008

Alaska Retirement holds back from real estate
ME: Property rules deter foreign investors
German property may soon lure sovereign wealth
UK: House price fall is smallest in seven months
Key London development seeking Middle East cash
Property can still bruise Asia's banks and economy
France weathers worldwide housing price bust
When will the U.S. housing market bottom?
China set to ease property policy by year-end
PREA Conference presents a gloomy future
Not-so-hot property
Middle East banks starting to limit lending to real estate sector
Hypo hysteria hammers European property
Further interest rates cuts needed in UK to revive property market
Mortgages go back to borrowing basics
NZ: Residential property market steady In September
Dubai house prices could fall slightly in 18 months
Eurex, as first European exchange, to launch real estate derivatives
StanChart gets tough with realtors
Top 10 biggest real estate deals
French property market 'healthier than UK'
Japan's first REIT fails, hit by credit crunch
Frightened investors ‘pile into property’
Top 50 Russian overseas property destinations
Taiwan: Buyers expect property prices to keep falling
Philippines property market: On a home run
Spain is currently "a buyer's market"
Even the wealthy are nervous about the housing market
France: Property market given boost by Interest rate cut
UAE remains global contender for property
Australia: Positive shift in property market
China:Long march to the modern real estate market
Middle East real estate market ‘will prevail’
Canada wide real estate outlook

Posted on 10 October 2008 by Laxman |  Email |Print

From IPE: Alaska Retirement Management Board has decided not to allocate any new capital to real estate investment in fiscal 2009. The pension fund made a decision at its board meeting on 26 September not to invest any further assets in real estate over the short-term as the pension fund has a targeted 10% allocation for the asset class but the amount it has actually invested so far is 12.5%.

This additional investment over target allocation is still within the fund’s broad range for real estate, which is +/- 4%, according to Steve Sikes the State investment officer working on the real estate portfolio….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Khaleejtimes.com: Legislative measures to combat property price escalation have made Gulf property market, where more than $2.39 trillion worth of projects are etimated to be under construction, less appealing for some foreign investors, according to a study released at the Cityscape 2008.
Measures including rental caps, restrictions on property transactions and possible capital gains taxes initiated by some GCC countries have dampened global investors’ interest to some extent, said the “Gulf Real Estate Study” released by Futurebrand’s 2008. “Kuwaiti authorities have banned residential property trading in an effort to curb inflation, while similar restrictions have been announced in Dubai,” the study said….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Guardian: Sovereign wealth funds (SWFs) from Asia and oil-rich nations may be set to jump in to the German real estate market, helping to support a sector which has been knocked down but not out by the financial crisis.

Sales of commercial property surged to record levels in Europe’s biggest economy last year, but they slumped in the first half of this year as bank losses, the credit crunch and fears about the economic outlook dampened investor appetite. Banks and other institutional investors have scrambled to hoard cash as money markets froze, which should open the door for cash-rich funds from China, Singapore and oil producers in the Gulf region, said DZ Bank analyst Christine Schaefer….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Times Online: House prices tumbled for the eight month in a row in September, wiping more than £2,000 from the value of an average home, new figures from the Halifax show.

The average property price is now £172,108, down from about £200,000 in September last year. This 13.4 per cent annual fall is the largest decline since Halifax’s series began in 1983. Prices in the three months to September were 12.4 per cent lower than in the same period last year, which is another record low….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Propertywire.com: The developers of Wembley City, a key project being built around the UK’s national football stadium in London, is seeking funding in the Middle East. Quintain Estates is looking to sell up to 50% to a strategic partner for the £2.5 billion mixed use project which is facing finance challenges.

The company has already announced its intention to slash costs in the face of deteriorating conditions in the UK property market….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Reuters: Asian banks have largely escaped the worst of the global debt crisis but housing market downturns, especially in China and India, still threaten to pile up bad loans and slow the region’s economy.
After property crashes burnt Japanese and Southeast Asian lenders in the 1990s, they have been more cautious. So falling home prices are much less of a risk than in the United States, where the subprime mortgage meltdown brought down several leading banks…… Full Article: Source

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From Webinfrance.com: France and especially Paris seem set to withstand the worst of the drop in residential real estate prices. It’s only news in the US — the real estate boom is well and truly over. prices are falling around the country as foreclosures turn real estate auctions into fire sales.

The trend, albeit on a less catastrophic scale, is starting spread around the world, with Britain, Spain and Ireland seeing home prices falling. France has begun to feel the effects of the housing-price meltdown trend, but some signs indicate that France, and Paris in particular, will weather the storm better than most countries in Europe and certainly better than the US…… Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Marketoracle.co.uk: Now that the US has signed the rescue bill, investors are analyzing ways they can use the bill to help them beat the market. The collapse of housing prices in the United States led directly to the problems with the mortgage securities that are freezing credit markets.

Some investors might think that the bottom in the current recession is near and the markets will recover soon. Others are not so sure. In this case, it pays to look at the past to see if you can learn from prior experiences and the trends in the housing market….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Reuters: Fresh from easing monetary policy for the second time in under a month, China is gearing up to loosen its grip on the property market as it strives to safeguard growth in the face of global financial turmoil.

Beijing may allow residents to borrow more under a subsidized mortgage scheme and cut transaction taxes to spur property purchases. It may also give developers more time to pay various fees and taxes to ease their cash-flow strains, analysts said…… Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From IPE: The pension fund real estate industry painted a pretty negative outlook for real estate investing at the Pension Real Estate Association’s 18th Annual Plan Sponsor Conference in Chicago last week. One of the main themes discussed at this year’s PREA conference suggested real estate values for US pension funds could drop by as much as 40%.

Mike Kirby, director of research for Green Street Advisors, said during a panel discussing public market prospects: “When I made a prediction earlier this year that the values would fall by as much as 30%, people thought I was off-base. The latest predictions are more than this.”…. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Economist: You may have thought that if anywhere would be insulated from the financial chaos, it would be Dubai, the ritzy commercial capital of the oil-rich Gulf. Not so. Events across the world are causing pain there too, even though much of the emirate’s cash has not made its way to the banks; it is held by ruling families and in their sovereign wealth funds.

Dubai’s oil revenues are small. Sheikh Muhammad bin Rashid al-Maktoum, the energetic ruler of the second largest emirate of the seven that make up the United Arab Emirates (UAE), has chosen to diversify, especially into real estate, as his way forward. Investors in Dubai property have done well in recent years, enjoying returns of roughly 80% since early last year….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Propertywire.com: Banks in the Middle East are facing lending difficulties over their exposure to the real estate sector, experts are warning. A shortage of funds with local banks and rising lending rates have added to United Arab Emirate stock market woes and action may be needed at a central level, according to investors and market intermediaries.

The Central Bank may have to consider allowing lenders to set up real estate subsidiaries, according to a report from US investment bank Morgan Stanley….. Full Article: Source

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From Investorschronicle.co.uk: This week’s near collapse of German lender Hypo Real Estate, one of the biggest commercial property lenders in Europe, has sent shockwaves throughout European property markets and threatens to send asset prices tumbling.

It was Hypo’s failure to refinance its public sector lending arm Depfa, rather than the quality of its property lending book, that caused the trouble. Nevertheless, the German government’s €50bn (£39bn) bailout will not be the end of its woes given the liquidity crisis engulfing Europe’s commercial property markets….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Propertywire.com: The much welcomed interest rate cut by the Bank of England is unlikely to have much impact on the UK property market, according to industry experts. Although most lenders have passed on the cut and reduced their standard variable rates this will only benefit those with tracker mortgages while more than half the borrowers in the UK are on fixed rates.

According to Savills research even if the rate cut filters through to the wider mortgage market, it is a lack of availability of funds that is having the biggest impact on the property market….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Times Online: Base rate cuts will do nothing to improve the morose mortgage market conditions that are behind declining property prices. This was the bleak message coming from brokers and estate agents yesterday, who cautioned that homeowners may never again be able to assume that falls in the Bank of England base rate automatically equal cheaper deals.

“The rate cut is a bit of a red herring. It is not suddenly going to answer our prayers” says Jonathan Cornell, of Hamptons International, a mortgage broker….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Scoop.co.nz: The world’s financial markets may be in turmoil, but they’re showing little dramatic effect so far on the New Zealand residential real estate market, according to the Real Estate Institute of New Zealand (REINZ).
President Mike Elford says the September figures reveal no dramatic trends and are relatively constant with last month’s result, albeit in a sluggish market, with 4,499 sales recorded compared with 4,220 in August….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Gulfnews.com: Although Dubai’s demand and supply situation is currently good, house prices could drop slightly when a glut of supply comes on to the market in the next 18 months, according to industry experts.

The key drivers behind Dubai’s successful property market are that the supply and demand situation still remains good and that financing is readily available, said Ian Albert, regional director of Colliers International….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Mondovisione.com: The international derivatives exchange Eurex today announced that it has reached a license agreement with IPD (Investment Property Databank) and intends to launch futures on the total returns of Investment Property Databank (IPD) Property Indices.

The new offering will be launched in the first quarter of 2009. The introduction represents for the first time that returns on European commercial property, one of the world’s largest asset classes, will be available at an exchange. Peter Reitz, member of the Eurex Executive Board, said, “I am very pleased that we will be the first European exchange to offer property derivatives to our customers….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Hindustantimes.com: Real estate developers have taken the severest hit from the funds shortage banks are going through. DLF Ltd and Unitech Ltd, the country’s two of the largest real estate developers, have not been able to draw on loans sanctioned by their bankers.

Standard Chartered Bank, the second largest foreign bank in India after Citigroup, has held back disbursement of loans sanctioned to DLF and Unitech. The bank declined to comment on the development….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Wall-street.ro: Real estate deals closed in first nine months this year exceeded one billion euros, biggest transaction being forward-purchase agreement of 340 million euros. Big transactions started in 2007, and the overall value is nearly 50% lower than last year’s similar interval.

Top 10 biggest real estate deals Subprime crisis led players into standby mode on the local real estate market, and banks have restricted their lending conditions, this being a period marked by negotiations. In the actual market conditions, those who will cope best with the gloomy conditions are buyers who will bet on the capital they hold….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Ready2invest.co.uk: France could be a much more favourable property investment market than the UK, experts have suggested. According to Shelter Offshore, Britain is currently in a “terrible” financial situation as a result of problems in the banking sector.

However, the organisation has said conditions on the other side of the English Channel are much better, which could possibly make it a good option for property buyers to consider. Indeed, it stated that the entire French housing sector is in a “far healthier” condition than the UK. “Prices in France are remaining stable on average with some regions actually reporting a price increase so far this year,” it commented. Shelter Offshore said this means it could be worth looking at potential investment opportunities in the country….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Reuters: New City Residence Investment Corp said it filed for court protection from creditors with $1.1 billion in debt, the first Japanese real estate investment trust to fail as fallout from the credit crunch spreads.

A string of Japanese property developers and construction firms have failed in the past few months, hit by a tightening of credit to an industry struggling with high raw materials prices and weaker demand as the economy slows….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Times Online: Investors who have lost faith in the banking system are turning to property as a safe haven for their cash.Estate agents have identified a growth in interest from cash buyers, who want something tangible for their money rather than depositing it with banks they no longer trust.

The trend is emerging in all corners of the property market, according to one nationwide agent, from high-end mews houses in Knightsbridge to dilapidated two-up two-downs in the East Midlands….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Globaledge.co.uk: There’s always someone with a story about a rich Russian buyer who rolls up and buys a bevy of developments with a suitcase full of banknotes at the full asking price. Where are these buyers when you really need them? Do they exist and where are looking to buy?

To help us answer the last question, we teamed up with international search agency, Oban Multilingual to research data on Russian language overseas property searches on Russia’s leading search engine Yandex.com. Using the most popular search locations on the Globaledge Search Index and their own research, The Russian office of Oban Multilingual researched and collated a list of the 50 most popular overseas property destinations….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Taipeitimes.com: The real-estate market is becoming a buyers’ market, with nearly 70 percent of home buyers expecting to see falling property prices over the next year, a survey released by Evertrust Rehouse showed.

“We believe property owners may face a 10 percent to 20 percent downward correction in their selling prices in order to close deals, since home buyers have turned even more pessimistic in the third quarter,” Yeh Lin-chi, the housing broker’s president, told a media briefing yesterday. Some 69 percent of the survey’s respondents in the third quarter said that they believe property prices would fall over the next three months — up from 37 percent of respondents in the previous quarter…… Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

Many Filipinos are roughing it out in Dubai, living in cramped flats and sharing accommodation, so that they can build their dream nests back home. Demand from expatriates has been so encouraging that the first Philippine Property Show was held in Dubai in September.

Manila’s top five property developers booked about Dh48.50 million worth of properties from the UAE-based Filipinos in 2007, according to some estimates. And according to the project director of the show Jovy Tuano, this very demand has also helped the property market in the Philippines weather the sub-prime crisis currently ravaging global markets….. Full Press Release: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Smartnewhomes.com: Prices in Spain’s property market are currently favourable for overseas buyers, according to Spain Magazine. The publication’s Oliver Chandler stated that the country is ideal for those looking to purchase a holiday home abroad, or for UK residents looking to emigrate to another country.

And he singled out the south of the country as the region most likely to attract buyers due to a fall in prices in the area, even though current exchange rates give the euro strength over the pound. “[It] is right on your doorstep and it’s only an hour’s flight away,” he said when questioned on the reasons behind Spain’s popularity, adding that the good weather and easy accessibility make it attractive to the British public….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Marketwatch.com: Barbara Corcoran recently got a call from an individual so rich and famous she thought it had to be a joke. But this random call it wasn’t a prank: The person, so shaken by recent events in the financial markets and so uncertain about what it would mean for him, called her for advice because he was about to buy a $47 million property in New York and he was nervous about completing the deal.

“He was as frightened as a first-time buyer — asking all the same questions,” said Corcoran, founder of The Corcoran Group, a New York-based residential real estate firm. She spoke during a recent conference call with reporters about the state of the real estate market, hosted by the real-estate Web site Trulia.com….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From French-property-news.com: Following the decision of both the Bank of England and the European Central Bank to cut interest rates by 0.5%, many house buyers looking to buy property in France are in a healthier position now to purchase than they were before with confidence in the market increasing…

Nathalie Turchet of MGM French properties welcomes the interest rate cut, saying “lower mortgage repayments means more disposable income, equity releasing becomes more accessible and we consequently expect an increase in activity.”…. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Gulfnews.com: The UAE is the third largest investor in property in the world, officials have said. According to Steve Williams, global adviser for Real Capital Analytics, the UAE, Qatar and Bahrain were surpassed only by the United Kingdom and the United States.

However, he added that the recent turmoil in the global financial markets has worsened the standing of the two western countries. Despite the international storm and the turbulence experienced in the local financial market, real estate capital remained a beacon of hope with dozens of multi-million dollar development projects being launched during Cityscape….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Yourguide.com.au: For the first time in almost two decades, the Reserve Bank of Australia has dropped interest rates by one per cent, marketing the second consecutive cut after a series of increases. This second interest rate cut and the passing on of savings of up to 0.8 per cent by most major banks has further buoyed consumer outlooks, and those of many in the real estate profession.

The decision to drop the rate is likely to encourage more buyers into the market, a positive sign that there is still money to be made. Jenny Meek of Century 21 Sapphire Region, based in Inverell says the outlook for the Australian property market is not as bad as perhaps some forecasters were predicting, and real estate agents share the optimism of many consumers nationally….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From FT: Mao Zedong and the Chinese Communist party won a bitter civil war in 1949 in part because of a platform of land redistribution to the peasantry that disavowed nationalising the land, writes Jamil Anderlini.

But in the late 1950s Mao launched the land collectivisation of the disastrous Great Leap Forward, which most historians agree led to the starvation of tens of millions in the countryside. The policies were rolled back briefly in the early 1960s but the mania of the “cultural revolution” between 1966 and 1976 extended collectivisation and reduced agricultural productivity further. In 1978, according to Communist party legend, a group of peasant farmers in Xiaogang village in the rural Anhui province risked execution as counter-revolutionaries by signing a secret pact that divided up their collectively owned land for each household to farm individually…… Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Offplanpropertyexchange.com: The Middle East real estate market could outperform all other regions over the next two years, a survey has suggested. The study, conducted in conjunction with the ongoing Cityscape Dubai property event, pooled the views of more than 350 developers and property investment businesses.

Jones Lang LaSalle’s ‘Investor Sentiment Survey’ is the first of its kind for the region and was hailed as a “critical benchmark” by analysts….. Full Article: Source

Posted on 10 October 2008 by Laxman |  Email |Print

From Propertiesinvictoria.com: It is interesting to have a look at the Real Estate market across Canada and compare it what is happening here in Victoria. The Victoria real estate market is holding it’s own and we think that many people will turn back and invest in real estate again.

As we discussed before in our blogs, real estate is a long term investment, forget about flipping properties. If you do, you will eventually get caught. Flipping properties is almost as stressful as moving. Read more about moving in our 6 part series Moving Advice. Back to the Canadian real estate market then; The number of properties listed via the MLS systems of real estate boards in Canada retreated in August 2008 from record levels in the previous four months, according to statistics released today by The Canadian Real Estate Association (CREA)….. Full Article: Source

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