Overseas Property Focus
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Growth in foreclosure The number of homes in some stage of foreclosure in June rose nearly 8 percent over last month to 40,351, a new report from RealtyTrac shows. That means one in every 211 homes in the state was facing some kind of foreclosure. Florida's number of foreclosures is the second highest in the nation, second only to the 68,666 filings in California last month. Florida has the fourth highest rate in the nation behind Nevada, where one in every 122 homes faces foreclosure, and California and Arizona. Nationally, 252,363 homes faced foreclosure in June, up 54 percent from May but just 21.7 percent from June 2007.
USA, Bloomberg, 10 July 2008 Foreclosures Rose 53% in June, U.S. foreclosure filings increased 53 percent in June from a year earlier and bank seizures rose the most on record as deteriorating property values and higher rates on adjustable mortgages forced more people to give up their homes. More than 252,000 properties, or one in 501 U.S. households, entered a stage of the foreclosure process, RealtyTrac Inc., a seller of default data, said today in a statement. Bank seizures rose 171 percent, the most since the Irvine, California-based company began tracking statistics on default notices, warnings of a scheduled auction and repossessions in January 2005.
USA, North County Times, 9 July 2008 HOUSING: Fannie Mae cracking New guidelines make it more difficult to purchase a second home. Fannie Mae, a government-chartered lender, instituted guidelines June 25 that limit the loans a homeonwer can secure when purchasing a second home. As home prices plummet in San Diego County, local real estate agents say more homeowners are looking to purchase similar homes for hundreds of thousands less and then let their original home fall into foreclosure. "It's the duck and weave," said Christopher Thornberg, an economist with Beacon Economics. "You're looking at (a similar house) down the block listed at half of what you bought (your house) for, so obviously the best move financially is to move from your house to that one." Purchasing a new home knowing that the primary residence will fall into foreclosure raises legal and ethical questions, real estate agents said. It is a federal crime to lie on a mortgage application with a federally insured lender, such as Fannie Mae. Fannie Mae's new guidelines require borrowers looking to purchase a second home to have at least 30 percent equity in the original residence, or plenty of cash reserves.
Qatar, The Peninsula, 11 July 2008 Qatar property seen good bet for investors With 500,000 families expected to make a move to Qatar by 2012, real estate is turning out to be an extremely attractive investment nowadays. Sabban Property Investments (SPI) is offering investors a 40 to 45 percent return on investment (ROI) through its inaugural project, the QR1.2bn ‘Sabban Towers’ at The Pearl – Qatar. Investors who bought into the project in late-2007 and earlier this year, have reported high returns as a result of the upward trend in housing prices and limited supplies in the country. LifeStyle Homes and Properties, responsible for sales and marketing of the project, is seeking to leverage the projected 500,000 families by showcasing low-risk projects with high ROI. In addition to the current economic boom, Qatar is witnessing an availability of low-risk projects with high ROI as the government has undertaken steps to update its foreign land ownership laws, leading to additional growth in the real estate sector. New legislation grants foreigners the right to 100 percent land ownership and to build residential units in 18 locations, including the ‘Pearl Island’, ‘West Bay Lagoon’, ‘Al Khor Resort’ and the ‘Lagoon Plaza’ projects. Foreign investors can also acquire residence visas from the Ministry of Interior.
Australia, Brisbane Times, 11 July 2008 Property market 'to bounce back' Brisbane's property market will continue to experience a lull this year but should bounce back and deliver decent price growth in mid-2009, one property analyst believes. Michael Matusik, of Matusik Property Insights, predicts price growth will continue to be weak in coming months thanks to interest rate pressures, high petrol prices and low buyer activity. Mr Matusik said population growth, strong economic conditions and an undersupply of dwellings provided the fundamentals for a market recovery. He compared current conditions to a similar market stumble in 2005, which led some property experts to falsely forecast a crash and a rapid drop in prices - the opposite of what played out.
New Zealand, Otago Daily Times, 11 July 2008 50% fall in Qtown home sales Queenstown residential property sales are down 50% on a year ago, which had been reflected in a 50% drop in real estate agents' returns. Although prices in the Queenstown residential sector are static at a median $530,000-$550,000, the number of property sales is down 50% on a year ago and real estate agents' returns are down 50%. Similarly, foreign interest in the area which peaked at 50% of sales at times has dropped to just 10% to 15% of the market, Real Estate Institute of New Zealand spokesman for the Central Otago Lakes district Adrian Snow said. "Having the highest median price is more of a curse than a blessing, because the average wage and salary earner finds it hard to afford a home," Mr Snow said.
South Africa, Business Daily, 10 July 2008 Houses are ‘a bad buy’ THE housing market’s bear phase could be lengthy, and investors would be better off not investing in residential property for the next five to seven years, says property expert Erwin Rode, writes Nick Wilson. But other property analysts disagreed yesterday, saying that if a residential property was priced right it always offered a good investment. Rode, CEO of property economists Rode & Associates, said investors should “only want to get into the residential market in a bull phase” and that prospects for capital appreciation over the next few years were “pretty dim”. He said it was an “old-fashioned idea” that people should own property instead of renting.
New Zealand, New Zealand Herald, 13 July 2008 Landlords and tenants Landlords want the cap on the amount of bond tenants must pay removed, saying it is not enough to compensate for damage done to rental property. The amount of bond landlords can legally require from tenants is capped at four weeks' rent, but president of the Property Investors Federation Martin Evans says this is often not enough. "Especially with furnished houses, four weeks' rent doesn't really cover theft - it really only covers rental arrears." The federation is lobbying for a change to the Residential Tenancies Act Amendment Bill, which would remove the cap on bond amounts and instead allow landlords to apply for more in some circumstances.
India, Bangkok Post, 12 July 2008 India's property market losing steam Asia's once-booming property market seems to be heading for some kind of a slowdown of which local Thai companies are looking to take advantage by venturing into the unknown. The latest to take the plunge is Preuksa Real Estate Plc, which has said that it would invest around 300 million baht in its first venture in Bangalore by the end of this year after having cancelled its plans in a more volatile Vietnam. But its move comes on the heels of a more uncertain environment in the property market in India and across the region. Rising oil prices, construction costs and inflation and the gloomy outlook of the global economy seem to be taking their toll on most regional markets. The gloom in property, especially in the middle and lower segments of the market, is not just centred around Ho Chi Minh City or Hanoi. Other cities across the world including the so-called ''miracle'' markets such as those in China and India are also feeling the pinch of the slowdown. In a recent report, property prices in Mumbai were estimated to fall by 10-15% over the next six to nine months on the back of lacklusture sales. The decline and poor offtake of properties are attributed to higher interest rates and costs, credit squeeze by banks, bearish capital markets and weak sentiment across the world.
Singapore, The Wall Street Jouirnal, 10 July 2008 Inflation Slows in Singapore's The sharp inflation slowdown in Singapore's private residential market is the latest sign that times are getting tougher for local developers. Prices increased 0.4% in the second quarter from the first, the smallest rise since mid-2004, according to recent government statistics. The figures were based on the first 10 weeks of the quarter, and some analysts said final numbers could show a decline in prices, which are likely to fall further in coming periods.
USA, Denver Post, 12 July 2008 Landlords, hide your identities Trusts can shield property owners in case of a lawsuit, but some lawyers say they offer no real protection. The risks call for self-protection, said lawyer William Bronchick. Among all professions, landlords face the greatest threat of being sued, he said. An active real estate investor and president of the Colorado Association of Real Estate Investors, Bronchick sells do-it-yourself software to help savvy property owners protect themselves with the right legal structure. It is one of several products sold for that purpose. The right legal structure, he said, often includes a land trust. Such an agreement allows one party, called the trustee, to hold ownership of property for the benefit of another, called the beneficiary.
South Africa, Realestateweb, 7 July 2008 Property price slump bad Latest housing price stats: where they've come from; where they're going. More property statistics painting a gloomy picture of the residential sector were released today - plus another warning that higher interest rates can be expected. Absa's House Price Index for June shows property prices in middle income suburbs still ticking up, however at a very modest 3.8%. From January to June this year, though, nominal prices "remained virtually static". The average house now costs about R965 500, according to Absa's measure. In May they dropped by 6.3%, year-on-year, compared to the 4.8% drop in April, notes Absa's senior property analyst Jacques du Toit. In real terms, prices have been dropping for the past six months, he says.
Australia, The Australian, 5 July 2008 Housing braces for further pain WILL St George Bank's increase in lending rates yesterday be the needle that pops Australia's housing bubble and brings pain to home owners across the nation? As our spare cash disappears into home mortgages and petrol tanks, our need to sell up could grow. Morgan Stanley strategist Gerard Minack sees a fall of up to 30 per cent in the next few years if the economic squeeze hits hard. So, how safe is your house? We sought the views of six experts: Morgan Stanley's Gerard Minack; Macquarie Bank property director Rod Cornish; Commonwealth Bank chief economist Michael Blythe; ABN AMRO Bank chief economist Kieran Davies; Australian Property Monitors analyst Michael McNamara and BIS Shrapnel senior project manager Angie Zigomanis. Are Australian houses and units overvalued? Are they overpriced? Gerard Minack (MS): Australian houses are much more overvalued than US houses; indeed on some measures, our houses are arguably the most expensive in the world. They're also less affordable.
Kenya, Business Daily, 8 July 2008 Home owners in a squeeze The surge in property prices in Nairobi suburban area may soon start claiming casualties as consumers feel the pinch from falling rental yields. With some consumers already being forced to dig deeper into their pockets to meet monthly mortgage payments to supplement what rental incomes don’t cover, this could force the level of mortgage loan defaults to rise. The Kenyan banking system is estimated to have given out house loans worth Sh20 billion, half of which sits with Housing Finance. The industry has in the past had a calamitous bad debt experience when economic slowdown and high interest rates converge as happened at the turn of this century. As low interest rates and high expectations of rising economic growth have driven the property boom in Nairobi over the last six years, the city has seen the number of middle-class families buy their first, second and third homes.
Abu Dhabi, UAE, The National, July 2008 Code proposed for rental properties Estate agents and maintenance workers could soon be required to obtain permission to enter people’s homes under a new code of conduct being drawn up by the Abu Dhabi Chamber of Commerce & Industry. The capital’s rent law does not say a tenant must be notified before a broker shows a property to a prospective tenant. Neither does it specify that the occupant must be told their property will be inspected, nor if workers will be carrying out repairs. Tenancy contracts also rarely list conditions for such visits. Such omissions potentially allow unrestricted access to people’s homes, raising security and privacy concerns in some quarters. A senior official at the chamber of commerce, which regulates the real estate brokerage industry, said a reasonable notice period for third-party access to rented property might be included in the upcoming brokers’ code of conduct or in standardised tenancy contracts.
Abu Dhabi, UAE, The Nation,
5 July 2008 Tenants have been travelling to Abu Dhabi, some 170km away, to lodge their complaints. Many of them reportedly spent hours in search of the committee office. The committee has been established by Abu Dhabi Executive Council to enforce the five per cent cap on the annual rental increase to bring stability to the real estate market and protect tenants from landlord exploitation. People living in Al Ain, the second biggest city in the Emirate of Abu Dhabi, have been facing a 30 to 100 per cent rental hike.
New Zealand, Stuff.co.uk, 6 July 2008 It makes more cents to rent than own People who do not have a mortgage on their home could be financially better off if they sold their property and rented instead. This would be particularly true for people with higher value properties, but would also apply to those with low-value homes. The Sunday Star-Times prepared three case studies of the financial implications of selling a home and renting one instead.
Wisconsin, USA, The Capital Times, 3 July 2008 High court sticks it to home buyers In a curious 4-3 decision that was joined by supposed new "traditionalist" Justice Annette Ziegler, the state Supreme Court this week declared that home buyers who were lied to by the sellers can't sue for fraud. Veteran Justice Anne Walsh Bradley, who was in the minority with Chief Justice Shirley Abrahamson and outgoing Justice Louis Butler, accused the four in the majority -- Ziegler, Patrick Crooks, David Prosser and Pat Roggensack -- of making law from the bench by expanding the state's economic loss doctrine that bars civil claims for economic losses. It had been applied to commercial real estate sales, but under the court's new ruling, it now applies to residential sales as well. Bradley pointed out that as a result of the decision, Wisconsin is now the only state in the nation that bars civil fraud cases in real estate transactions.
USA, Connecticut Post, 2 July 2008 State housing market plunges Sales of single-family homes in Fairfield County plunged by 44.55 percent between May 2007 and May 2008, and prices statewide fell more than 10 percent during the same period. The Warren Group, a Massachusetts-based real estate and banking industry research firm, said Tuesday there were 468 single-family homes sold in Fairfield County in May 2008, compared to 844 sold in May 2007. The median price those sales brought in Fairfield County in May 2008 was $545,000, a 13.15 percent decline from $627,000 in May 2007. "You've got economic gravity working against you," said Vincent Valvo, group publisher of The Warren Group's trade journals.
Singapore, Daily Times, 8 July 2008 Singapore’s property Singapore’s booming residential property sector is finally showing signs of cooling but projects including two casino developments should underpin long-term prices, analysts say. The market was described by real estate giant Jones Lang LaSalle as the world’s hottest in 2007, when the city-state’s property prices surged 31% overall. But this year the sector has not escaped wider concerns over a US-led global economic slowdown and inflationary pressures. Private home prices rose 0.4% in the second quarter, the slowest increase in four years, the government’s preliminary figures showed last week. The second-quarter rise was also much slower than the 3.7% increase recorded in the previous three months but prospective buyers waiting for huge bargains may be disappointed. Property analysts say prices are likely to fall further in the third quarter but experts rule out massive declines because of the multiplier effect from two multi-billion-dollar gaming resorts now under construction. Housing demand is expected to pick up when the first of the two casinos opens next year, employing thousands, said Chua Yang Liang, head of Southeast Asia research with Jones Lang LaSalle.
South Africa, Epropo, 9 July 2008 Noose ‘likely to loosen next year’ The sixth annual property investment conference next month will focus on issues such as declining world investment conditions. The conference, on August 7 8 at the Pavilion Conference Centre at the Victoria & Alfred Waterfront in Cape Town, carries the theme Opportunity in Uncertainty and includes key Clur says an important signal for investors is that the retail property market was the weakest sector in the IPD’s global property index last year. The index surveys 22 countries and points to ebbing consumer confidence in the UK and US as key factors.
USA, Newsday.com, 6 June 2008 Less is more for second While The Hamptons will always be known for sprawling summer houses for the rich and famous, the more typical second home buyer on the South Fork is scaling back these days. Real estate agents say they don't want large houses but smaller homes that are energy-efficient, but loaded with top-of-the-line extras. "Showy is out," says Franz Muster, master licensee and a partner with the Southampton office of Engel & Volkers, a Hamburg, Germany-based real estate firm with 340 locations worldwide. "There is more of an awareness of energy use and the costs of heating and cooling homes, and buyers are realizing that they don't need all that space to have to maintain in a second home. But, at the same time, they want homes with everything, like nice bathrooms, updated kitchens, stereo systems, iPod stations." For instance, buyers now prefer 2,500- to 4,500-square-foot homes with maybe three or four bedrooms, versus the 7,000-square-foot or more homes with six or seven bedrooms that were more in demand five years ago, Muster notes.
USA, Ohio.com, 5 June 2008 Summit property values drop Residential and agricultural property values fell an average of 1 percent in Summit County over the last three years — an unprecedented decline caused by lackluster home sales and thousands of foreclosures, county Fiscal Officer John Donofrio said today. Both state and local officials could not recall any county ever reporting an overall decline in residential property values. Overall, 52 percent of property owners will see a drop in value, while 8 percent will see no change. The biggest loser among the cities, villages and townships was Akron, where values dropped 4.4 percent overall. The largest gain was in Hudson, where values increased 4.3 percent. Donofrio and director of appraisals Ray Valle called the countywide decline unprecedented. For comparison, property values rose by 9.9 percent after an appraisal update three years ago. ''To get a decrease at all is pretty amazing,'' Valle said. The bottomline for homeowners is that taxes generally go up or down with property values, although figures for specific properties aren't available and are affected by a variety of factors. County workers have spent the last two and a half years analyzing home sales and visiting individual properties to determine the values. Donofrio will submit the appraisal report Friday or Monday to the Ohio Department of Taxation for review. The total value of residential and agricultural property in the county has been estimated at $26.8 billion.
South Africa, The Times, 6 June 2008 Homeowners feeling down There is no good news for homeowners desperate to sell their houses as the latest house price survey shows a dip that has not been seen since 1999. Absa Bank’s House Price Index for May released yesterday recorded single digit year-on-year nominal growth of 4.3 percent last month, down 1.2 percent from 5.5percent in April — the slowest house price growth in nine years. The Absa index is based on the total purchase price of houses in the 80m² to 400m² size category, valued at R2.9-million or less last year , including home improvements, for which loan applications were approved . The bank expected the SA Reserve Bank’s Monetary Policy Committee to introduce a 100 basis interest rate next week, with potentially further rate hikes if the CPIX (inflation excluding mortgage costs) remained ‘‘stubbornly high.” USA, Crainer’s New York News, 4 June 2008 NYC foreclosures decline for second month In a sign that homeowners are educating themselves and lenders are more willing to work out deals, foreclosure auctions in New York City declined for the second consecutive month in May, down almost 5% from April, according to a soon-to-be released report. There were 313 foreclosure auctions in the city last month, compared with 329 in April, according to the report, which will be released Thursday by PropertyShark. “Homeowners may be getting more aggressive at saving their homes and there may also be lenders who are more forgiving,” says Ashleigh Rose Clark, data acquisition manager for PropertyShark. “Those two reasons tend to be why things are improving.” Despite the monthly decline, foreclosures were still up nearly 50% from a year earlier. And while fewer homes actually reached the auction block, many more continued to enter the foreclosure process. South Africa, AllAfrica.com, 5 June 2008 South Africa: High-End House Prices Face Business Day (Johannesburg) Johannesburg: THE decline in house prices could be worse than previously feared. A leading property expert says prices may fall as much as 40% from last year's highs by year's end, especially at the upper end of the market. Rising interest rates and inflation have intensified pressure on the residential sector since the beginning of the year. Real estate veteran Lew Geffen, chairman of Lew Geffen Sotheby's International Realty, said yesterday the expected 40% drop meant the residential market was going to "roll back two years". "The prices of two years ago will be the prices at year-end," he warned. Geffen said that according to an official communication from Absa to his group, the bank was providing 100% home loans only for properties valued up to R800000. |
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