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Real Estate Briefing 15.Oct 2008

U.K. commercial-property firms retrench
French investment property returns drop significantly during H1 2008
UK: Housing slump could be over next year
Dubai property market to slow but ‘avoid collapse’
UK House prices will drop 40% by 2010
NYC construction to reach $93 bln by 2010
Merrill Lynch closes US$2.65 billion Asia real estate fund
Real estate markets of the Middle East will outperform all other regions
Villas and aparments for sale in Cuba
Financial clouds keep China's house buyers at home
Taiwan heads for property slowdown
Housing problem for UAE nationals 'to end next year'
US real estate in bargain territory
Rics releases gloomy new property market data
Tourism 'helping Florida property comeback'
China: Property policies 'set to ease'
New Cape Verde trade body to aid property industry and inform overseas buyers
Australia: Listed property trust are a riskier proposition
NZ: It's a buyers market but property still a good investment
Irish property market hits the wall
U.S. REITs tumble as tenant demand seen declining
India: Land prices to grow 15-20% even as property prices drop
South-East Asia heads for property slowdown but no bust
Investors pulling out of Czech commerical property
British house prices down by 40%
Housebuilders resort to risky incentives
Analysts warn of risk as East Euro banks exposed to property price collapses
Worries grow over commercial real estate
Baghdad housing prices soar under sectarian shadow
US: Problem of home prices demains
Hypo Real Estate launches probe into ex-CEO
Housing bubble bursts in London

Posted on 15 October 2008 by Laxman |  Email |Print

From WSJ: U.K. commercial-property companies are selling assets and putting developments on hold as credit is virtually unobtainable and layoffs across the financial sector and related industries are curtailing demand.

Two of the country’s biggest commercial developers and landlords, Land Securities PLC and British Land PLC, have between them offloaded almost £5 billion ($8.68 billion) in assets during the last fiscal year. And they aren’t alone….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Europe-re.com: IPD has released half yearly results for the French property investment market for the first time, reporting a database value of €30.8 billion through to June 2008. The All Property total return to this new IPD French Biannual Indicator was a mere 0.6% for the six months to June 2008 - a significant drop from the 17.8% twelve-month total return recorded to the end of December 2007.

A fall in capital values was the main factor contributing to this reversal, with a 6-month capital growth figure of -1.9%, compared to 11.8% for the twelve months to December 2007. Property nonetheless outperformed both Equities and Bonds over the six-month period, which returned -19.3% and -0.8% respectively. Retail was the top performing sector during the first half of the year with a total return of 4.3%, followed by Industrials at 1.3%, and Offices at -1.1%….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Times Online: The housing market slump could be over as soon as next year if the cost of home loans falls by a further half-point, a leading housing market expert told MPs yesterday.

David Miles, chief UK economist at Morgan Stanley, said that if mortgage rates stayed at present levels, an educated guess from sophisticated economic estimates was that house prices would fall by another 5 to 10 per cent and wipe a further £17,000 off the value of an average home before the market bottomed out next year. …. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Gulf-times.com: Dubai’s real estate prices will slow but avoid a “systematic collapse” as global economic turmoil spreads to the region’s property boom town, according to Citigroup’s research arm.

“After a circa 50% spike in prices in the first half of 2008, conditions have changed materially over the last three months and the risks of a near-term slowdown (rather than the collapse implied by valuations of equities such as Emaar) have risen substantially,” Citi Investment Research said in a note published late last week. Citi says the slowdown will be brought about by a number of factors, including a shortage of liquidity; ….. Full Article: Source

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From Guardian: The average price of a house in the UK will not climb back to its 2007 peak until 2023, a leading academic said today. Andrew Clare, professor of asset management at Cass business school, said the state of the housing market will get “a lot worse” before it starts to pick up again.

Using futures contracts based on the Halifax house price index, he has calculated that, in 2010, house prices will be 40% lower than their peak of £199,600 in August last year. “Worse still, according to these prices, the Halifax index will not recover to its August 2007 level until 2023,” he said….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Reuters: New York City’s government, agencies, institutions and private developers are expected to spend about $93 billion through 2010 for new roads, office buildings, apartments, and schools, according to a trade group coalition report.

The forecast by the New York Building Congress does not factor in the effects of the recent weeks of global financial turmoil that saw the bankruptcy of Lehman Brothers, the sale or pending sale of Bear Stearns, Wachovia , and Merrill Lynch & Co Inc and the problems at American International Group Inc ….. Full Article: Source

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From CNN: Merrill Lynch & Co.said it raised US$ 2.65 billion for a new Asian real estate fund. Merrill’s Asian Real Estate Fund will look at a variety of investments, including direct real estate assets and real estate companies. The fund has a focus on Japan, China, South Korea and India and a secondary focus on Australia and Southeast Asia.

“We see exceptional opportunities in Asian real estate over the medium and longer term,” Tim Grady, Managing Director and Head of Merrill Lynch Pacific Rim Global Commercial Real Estate, said in a statement….. Full Article: Source

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From Europe-re.com: The real estate markets of the Middle East will outperform all other regions, according to findings from the Investor Sentiment Survey, an in-depth study of real estate professionals market views conducted by Jones Lang LaSalle in association with Cityscape Dubai, the world’s largest real estate conference and exhibition.

The report also reveals that almost half of all respondents believe UAE will offer the best performing real estate market in the Middle East over the next 1 – 2 years, with the Kingdom of Saudi Arabia to be the next best performer. Pooling the views of a sample of over 350 local developers, sovereign wealth funds and high net worth investors, the survey is the first of its kind conducted in the region….. Full Article: Source

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From Countrylife.co.uk: One of the first opportunities for foreigners to own property in Cuba is just around the corner. When a new project launches later this year, it will lay the founding stone of the Carbonera Country Club, the island’s first high-end resort with a PGA golf course.

‘Cubans are keen to emphasise that their island has so much more than the other Caribbean islands,’ says Andrew Macdonald, chief executive of the company in charge of developing the resort, Esencia Hotel & Resorts. ‘Not only is the medical and educationalinfrastructure excellent, but it’s culturally rich, too.’…. Full Article: Source

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From Earthtimes.org: As house sales and prices tumble in China amid heightened uncertainty brought by the global financial turmoil, millions of would-be first-time buyers are locked in a standoff with giant, government-backed property developers.

“Developers expect the government to save the market and loosen the control of property loans,” said Zhou Fan, chairman of the Zuoyou Real Estate Consultancy, based in the southern city of Guangzhou. “Consumers expect the government not to take measures and think prices are still too high,” Zhou told Deutsche Presse-Agentur dpa….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

Taiwan’s property market, hit hard in the last few months by the global downturn and a drastic domestic stock plunge, is likely to enter a recession from next year, property dealers and analysts said. “Beginning next year, the property market here is likely to see obvious slowdown, which could last two to four years,” said Chang Chin-oh, land economics professor at Taipei’s National Chengchi University.

Stanley Su, senior researcher of Sinyi Real Estate Inc, a leading Taiwan property brokerage group stressed that even with the slowdown, its scale would be smaller in Taiwan than that in other countries….. Full Press Release: Source

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From Zawya.com: Sheikh Hamdan bin Mubarak Al Nahyan, Minister of Public Works and Chairman of Sheikh Zayed Housing Programme, has revealed that housing problem among UAE nationals will end in 2009. He pointed out that all UAE nationals who applied for residential help from the programme until the end of last year will get the help next year.

In a speech at First Housing Conference organised by Sheikh Zayed Programme in co-operation with United Nations Human Settlements Programme, he said the gift of the President His Higness Sheikh Khalifa bin Zayed Al Nahyan, Ruler of Abu Dhabi, to construct 40,000 units and support the programme’s budget in the beginning of 2008 helped create a radical solution for housing problem in the UAE in 2009….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Theaustralian.news.com.au: The rate of forced sales suggests the answer is yes, although the strengthening US dollar and uncertain capital gains mean it’s not quite a foreign buyer’s bonanza. Already, 2.2 per cent of all US homes are in the foreclosure process, according to foreclosures.com.

The Wall Street Journal predicted this week that there could be 1 million foreclosed properties on the US market by the end of the year. “So far this year, 748,381 homes — or 46 per cent of the foreclosures — have gone into the possession of the banks … because no bidders were interested in them at auction,” the Journal reported….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Londonstockexchange.com: Surveyors are overseeing less than one home sale a week as the property sector continues to decline, new analysis suggests. According to the Royal Institution of Chartered Surveyors (Rics), the lack of available mortgage loans and fears over falling house prices has led to the drop in buyer activity.

A poll of members last month showed that sales per surveyor over the past three months have dropped to 11.5, the lowest figure in the survey’s 30-year history….. Full Article: Source

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From Propertyshowrooms.com: Florida property is on its way back thanks to its continued growth in tourism, it has been stated. Speaking to the Cay Compass National Association of Realtors presidents’ liaison to the UK John Mike said: “The real estate market throughout Florida declined dramatically from mid 2005 to Spring 2008, with positive signs of stabilisation occurring in recent months.”

This stabilisation may mean Florida is close to the bottom of the market, making it a good time to buy property in this part of the USA….. Full Article: Source

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From Chinadaily.com.cn: The central government is expected to relax its policies on real estate before the end of the year to prevent further sharp drops in fixed-asset investment, particularly at a time when concerns over falling exports and slowing GDP growth worsens, analysts have said.

The Ministry of Housing and Urban-Rural Development has submitted a package of loosening initiatives on real estate policies to the State Council and related policy could be released as early as next month, industry sources told China Daily….. Full Article: Source

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From Investmentinternational.com: A new trade body was launched in Cape Verde in October to help the property industry express their opinions with the government and improve the general real estate sector in the country.

The group, called Promitur, already consists of 30 members from the developer, agency, financial and legal industries. It aims to grow this further to eventually encompass the majority of the market. The body has various important aims that should prove a positive influence on the sector. These include helping implement infrastructure developments, changes in the law aimed at improving the investor market, and acting as a central point for both the overseas industry and those looking to buy property in the country….. Full Article: Source

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From Theaustralian.news.com.au: Investing in listed property trusts (LPTs), or A-REITs as they are now called, has proved a popular choice by many investors over the past few years, buoyed by a regular income stream and year-on-year capital growth.

Indeed, for most of the past 10 years the sector has outperformed the general equities market. However, the sector, which has in the past been a defensive haven in volatile times, has been hard hit of late, falling by much more than the broader market indices since the beginning of 2008….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Stuff.co.nz: People wanting to sell their house should take the first “reasonable” offer they get, according to Paul Joblin, Real Estate Institute of New Zealand (REINZ) Wairarapa spokesperson.

At least that is the best advice over the next few months with continuing uncertainty over what direction the residential property market might take. But based on the latest figures from REINZ it is a continuing downward spiral with the median house price falling and the number of sales low. Last month there were 31 houses sold in Wairarapa, an increase of three from August but only half for the same period 12 months ago. Two years ago 124 houses were sold in September….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Thepeninsulaqatar.com: Thousands of new homes shot up in the town of Tallaght during Ireland s boom, but now prices are being slashed and properties lie empty as the market hits the rocks in the current world economic storm.

Tallaght, on Dublin s south-west outskirts, has the new hotels, bars, coffee shops and glass and steel apartment blocks to prove that, until very recently, it was growing fast. But despite mountain views and a new tram link connecting it to central Dublin in 40 minutes, property is hard to shift now. Local estate agents say prices are down as much as 30 percent on two years ago….. Full Article: Source

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From Bloomberg: U.S. real estate investment trusts plunged, led by New York City office landlords, amid signs the slowing economy is hurting demand for commercial leases.

The Bloomberg REIT Index closed down 10.64 points, or 6.5 percent, to 151.98 after falling as much as 13 percent today. New York City office landlords led the drop, with SL Green Realty Corp. falling as much as 22.5 percent before closing down $6.87, or 13 percent, at $46.88. Vornado Realty Trust dropped $8.12, or 10 percent, to $71.00, Boston Properties Inc. declined $6.52, or 7.8 percent, to $76.97 and Brookfield Properties Corp. fell to a five-year low before closing down 25 cents, or 2.2 percent, at $11.24….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Moneycontrol.com: The returns on your investment in residential houses may be seeing a slowdown on account of the global economic sluggishness. But is this the case with your investment in land?

The Indian real estate market is seeing a slowdown. High inflation and rising interest rates have resulted in a 30-40% drop in sales, and consequently, a 15-20% drop in prices. But land prices, which shot up by over 100% two years ago, are now holding stable. Experts, though, warn that the next six to 12 months could prove to be difficult…… Full Article: Source

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From Monstersandcritics.com: Having lived and learned from the 1997 crisis, South-East Asia’s property markets have so far proved resilient to the US subprime crisis and knock-on financial meltdown but they are far from immune to the global mess.

‘No one can get off scot free from what’s happening because global liquidity has been reduced and also the feel-good factor has gone,’ said David Simister, chairman of real estate company CB Richard Ellis Thailand. Sponsored Links: ‘It will certainly create a slowdown and a market where for the next 18 months it’s a bad time to be selling something but I don’t see a situation where there will be a big slide in prices here,’ he added. …. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Centrum.cz: The global financial crisis is rapidly decreasing investments in office buildings, shopping centres and warehouses in the Czech Republic. The Czech market is following a similar trend in the UK. A new study conducted by Cushman & Wakefield says investors in the third quarter of 2008 spent approximately EUR 300 million on Czech commercial property, 42 percent less than in the same period last year.

By the end of the year, the total volume of investments is expected to reach some EUR 750 million, which would represent a year-on-year drop by up to 70 percent….. Full Article: Source

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From Sky.com: One flat in Folkestone, Kent, went on the market on January 28 this year at £125,000, and has now been reduced to £75,000. The one-bedroom, lower ground floor property lies in an upmarket area of the coastal town, and is in need of refurbishment.

When Sky News Online posed as cash buyers, the estate agent Fell Reynolds confirmed the flat had been slashed from £125,000 to £99,950 and then to £75,000 because of the housing slump….. Full Article: Source

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From FT: Housebuilders are resorting to ever-pricier and potentially riskier incentives to sell new homes. Many of the incentives come down to cash discounts for new buyers. Persimmonhas a “live free for a year” offer where it pays its buyers’ bills, including council tax, mortgage and utilities.

Savvy buyers should also expect to gain free fitted carpets and some furniture at the developer’s expense, as well as moving fees and stamp duty paid. Other incentives are far less straightforward and could end up accentuating builders’ exposure to the flagging housing market….. Full Article: Source

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From Propertywire.com: Banks in East European countries, some of whom are members of the European Union, are in danger of being left out of the global finance rescue plans and are vulnerable because of their exposure to struggling property markets.

The International Monetary Fund and leading European analysts are warning that some of these countries could follow Iceland into virtual national bankruptcy. The IMF has identified Estonia, Latvia and Lithuania as particularly at risk and it has been asked by Hungary to provide possible technical and financial support….. Full Article: Source

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From Toprealtynews.com: As the housing market stumbled, commercial real estate still had legs to stand on. But those legs started buckling this year, pounded by the weakening economy and tightening credit.

Last week, one high-profile set gave in. General Growth Properties, the giant mall REIT, plunged 50% to all-time lows as investors worried it wouldn’t make payments on its $27 billion debt. It’s not alone. Aggressive commercial buyers who closed on highly leveraged deals in the boom years through the 2007 market peak have also started getting caught as debt payments came due….. Full Article: Source

Posted on 15 October 2008 by Laxman |  Email |Print

From Mercurynews.com: An arrow in central Baghdad points down a side-street to a glass door with a sign that reads: “Ali’s Office.” That’s where real estate broker Hadi Abbas Ali has greeted clients for 25 years. Now Ali is witnessing a boom of sorts in the Iraqi capital, where real estate prices have doubled in some areas.

But a sectarian shadow hangs over the boom. Buyers don’t look for a river view or simply the best deal in town. Safety-conscious Shiites seek housing in walled-in areas dominated by their sect, and Sunnis stick to their own as well. With little new construction afoot, there are far more buyers or renters than available homes in places like Karradah, a mostly Shiite area where Ali is hard-pressed to shrink his waiting list….. Full Article: Source

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From WSJ: The Treasury Department’s rescue plan for the U.S. financial industry doesn’t directly address the root cause of the crisis: falling home prices. The government’s plan, which includes taking stakes in major financial institutions and temporarily guaranteeing certain new bank debt, could cushion the economy and thus the housing market from further blows.

But many economists say additional measures are needed to stimulate demand for homes and to reduce mortgage delinquencies and foreclosures. At the heart of the rescue plan is an effort to keep the credit crunch from sending the economy into a tailspin. “If the financial system doesn’t get working again, then the economic downturn is going to be much worse, and that means the housing market will be a lot worse than it otherwise would be,” says Frederic Mishkin, a Columbia University economist who stepped down as a Federal Reserve Board governor in August….. Full Article: Source

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From Propertyeu.info: The supervisory board of Hypo Real Estate has initiated an independent enquiry into whether there was any breach of duty on the part of former CEO Georg Funke and another management board member, Bo Heide-Ottosen.

The listed property lender said that legal firm Milbank Tweed Hadley McCloy had been retained ‘to examine a possible breach of duty’ by Funke and Heide-Ottosen….. Full Article: Source

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From WSJ: The financial crisis is taking a heavy toll on London’s once-thriving property market, as real-estate agents report the biggest slump in business since records began 30 years ago. London’s real-estate agents sold an average of 8.3 properties apiece in the three months ended in September, according to the Royal Institution of Chartered Surveyors.

That is the lowest tally for any region of the country since the survey started in 1978. In Britain as a whole, agents sold an average of 11.5 properties during the three-month period, down more than 50% from ….. Full Article: Source

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