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Real Estate Briefing 04.May 2011

Posted on 04 May 2011 by Laxman |  Email |Print

Bill AckmanFrom afar, U.S. real estate is a compelling story. House prices have fallen drastically. Mortgage interest payments are still tax deductible. The country’s housing supply isn’t being replenished because construction has dropped off.

But with all that working in the housing industry’s favour, there is still a lot of pessimism. What could possibly turn the market around?………………………………………Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Azrack JosephU.S. commercial property prices may fall within a year as building owners attempt to refinance $1 trillion in mortgages, according to Joseph Azrack, head of real estate for Apollo Global Management LLC.

Rents in some cities don’t justify the rising prices being paid and may force owners to give up properties when their loans mature, Azrack said during a panel discussion yesterday at the Milken Institute Global Conference in Beverly Hills, California……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

A few large commercial banks are becoming more bullish on commercial real estate, in the latest sign that the financing is beginning to flow more freely into the capital-starved sector.

While many banks continued to cut their exposure to commercial real estate in the first quarter, Wells Fargo & Co.’s portfolio rose to $101 billion, up 1.7% from the fourth quarter and 3.3% from the first quarter of 2010. It was one of the bank’s few lending segments that actually rose from the fourth quarter……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Thanks to falling home prices and rising rents, would-be home buyers have the upper hand this house-hunting season. In nearly 4 out of 5 major U.S. cities, it’s now cheaper to buy a home than to rent. That’s up from 72 percent of cities last quarter, based on the Rent vs. Buy Index released by online real estate resource Trulia.

“With home prices nearing a double-dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying,” said Ken Shuman, head of communications at Trulia………………………………………Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Five years into the real-estate bust, the market for single-family homes seems weaker than ever. According to the most recent S&P/Case-Shiller housing data, prices fell 3.3% nationwide in February from a year earlier.

The ongoing malaise, paradoxically, is only boosting the opportunities for investors in multiunit rental properties……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

The latest Council of Mortgage Lenders (CML) figures on house purchases tell an interesting tale, but not the one to which headlines wish to draw our attention.

It’s been widely reported that cash purchases now make up 40% of transactions, a dramatic rise from the 18.7% that cash purchases made up in June 2005. Shady oligarchs buying up their latest des res with untraceable cash – that was the story most commentators have gone with……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Scottish house prices plunged in the first three months of this year, as the modest increases of 2010 were wiped out.
The number of property sales also dived in the three months to the end of March, according to new Registers of Scotland (Ros) data. There were 35 per cent fewer sales in the first three months of 2011 than in the final three months of 2010……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

It seems likely that property owners and buyers in France will face increased mortgage rates, as the European Central Bank acts to control inflation.

Last month the European Central Bank raised the interest rate from 1% to 1.25%, but as yet this has not been passed on to borrowers because it had already been factored in by the banks. However fixed rates have increased slightly and it’s expected that further increases will occur as it becomes more expensive for banks to refinance their offered loan rates……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Despite persistent uncertainties worldwide, the poll-based Real Estate Climate of the monthly King Sturge Real Estate Economy Index registered a 3.0% surge in April, and regained the high-water mark of February 2011 by scoring 144.6 index points (up from 140.4 last month).
This sufficed to balance the 2.9% dip of the previous month, turning an upward into a lateral movement in the process……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Investors in Swiss Real estate such as pension funds and insurance companies are paying too much for low returns and need to look further afield for yields and growth potential, said a fund manager at Zurich-based investment company 4IP.

While supply constraints and rental values have kept Swiss real estate buoyant, the typical 3-5 percent return is too low to help many pension funds match future assets and liabilities, 4IP portfolio manager Claudia Reich-Floyd told Reuters on Tuesday……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Belgian commercial property delivered its highest return since 2008 last year, at 4.6%, according to the IPD Belgium Annual Property Index.

The improving returns were delivered despite a third consecutive year of capital decline, at -1.2%, though this represents a considerable slowing of capital depreciation, by 140 basis points, from the -2.6% suffered in 2009. Income return incurred a moderate fall from 6.2% to 5.9% in 2010……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Commercial property investors could be looking to Portugal for their next purchase after it was reported that prices are continuing to fall in the country. The Royal Institution of Chartered Surveyors (Rics) revealed that property investment costs are dropping at a rapid pace in the European nation.

Its March 2011 Rics/Ci Portuguese Housing Market Survey showed that the national activity index dropped by two points to minus 26, while the national confidence index in the property market declined by 22 points to minus 51……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Spain’s central bank Tuesday said bad debt levels in the country’s construction and real estate sector are rising slightly, even though non-performance in mortgages and other retail loans is decreasing, a sign that a three-year long property bust is still taking a toll on banks.

In a twice-yearly report, the Bank of Spain said the country’s commercial banks must keep cutting operating costs, to offset the effect of narrow interest margins in what it called a “difficult” environment for the sector……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

The Confederation of Real Estate Developers’ Association of India (CREDAI) has termed the 50 bps hike in repo and reverse repo rates as ‘harsh.’

Pradeep Jain, Chairman, said it would intensify the cash crunch scenario which the industry was facing right now. Along with this the RBI’s increase of the saving bank deposit interest rate to 4 per cent would also add pressure on the cost of funds for banks……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Real estate developers and home buyers will feel the pinch of higher interest rates, which could slow down home sales. Higher interest will push up monthly installments for home loans for existing as well as new home buyers.

The National Real Estate Development Council (Naredco) expects interest rates on housing finance to increase to 10.5 per cent for loans up to Rs 30 lakh and 11 per cent or more on loans above Rs 30 lakh……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

China may extend property curbs to the country’s third and fourth-tier cities after investors and developers flocked inland following a harsh clamp-down on property prices in major cities, the Shanghai Securities News reported on Wednesday.

To limit the risk of asset bubbles forming in these inland cities, the government may extend home purchase restrictions and price limits on the property sector in these third and fourth-tier cities, the paper said citing unidentified sources……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

Residential property prices in 100 major cities in China rose 0.40% in April from March, slower than March’s 0.59% increase, China Real Estate Index System said Tuesday.

The data provider said a survey of property developers and real-estate agencies showed that average home prices in April declined to CNY8,773 per square meter from CNY8,738 in March. The survey, which the company compiles together with online real-estate brokerage SouFun Holdings, is watched widely since China scrapped in January a national property price index……………………………………….Full Article: Source

Posted on 04 May 2011 by Laxman |  Email |Print

China’s home prices rose for the eighth consecutive month in April, Soufun Holdings Ltd. said today, defying government steps to cool prices.

The latest gain underscores the challenge facing Premier Wen Jiabao, who said May 1 that the nation is “determined” to bring down housing prices in some cities to a “reasonable” level. Home prices rose 0.4 percent in April from March and climbed in 77 of 100 cities tracked by the nation’s biggest real-estate website owner……………………………………….Full Article: Source

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