Posts tagged 'Real Estate'

Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market

Three months down the line, enough time has passed to properly assess the impact of Brexit on the London property market. Read more

The weird world of property crowdfunding (updated)

In this little corner of the fintech world, it seems, people have been flipping fractional stakes in residential real estate to each other, hoping they’re not the last, greater fool who buys at the top. Read more

“Golden bricks”

In the real estate world, the term “golden brick” refers to the first level of bricks above ground and is typically discussed because of the tax implications: developers can avoid VAT on a land sale with a “golden brick” transaction, where it’s obvious that a building is under construction.

In the peer-to-peer real estate world, the term “golden brick” has emerged as a nice bit of spin for property market pain. Here’s Property Partner, a crowdfunding site for housing equity, encouraging its customers to keep buying last week: Read more

Buy this loan to let a wannabe landlord from Brazil get a mortgage in London

You might recall Deutsche Bank’s bearish note on the London buy-to-let market last month. It argued, in short, that regulatory changes had set property in the British capital on the road to a nasty crash in the not-so-distant future.

And that was before minor things like Brexit and the closure of a raft of open-ended property funds. (It still boggles the mind. Open-ended fund. Property funds. Open-ended… property…)

Well, online lenders are putting on a brave face and continuing boldly on. Here’s a prospective 12-month, £143,000 loan just listed on Assetz Capital, one of the many UK lending startups. It yields 7 per cent: Read more

Transaction costs as the saviour of UK real-estate?

Six open-ended UK property funds (and counting) have suspended redemptions on the back of Brexit induced volatility leading some to worry the market’s on the verge of a sizeable correction in UK real-estate prices.

But this isn’t the crisis of 2007, says SG’s Jean-David Cirotteau.

As Cirotteau and team observe, during the subprime crisis, UK office prices dropped by 38 per cent from peak to trough from the end of 2007 to mid-2009, and within that context the London residential price correction was more limited, with the market falling by 17.7 per cent. Read more

The London property market is doomed, doomed I tells ya

Yes, yes, we know, people will keep buying property in London no matter the price, no matter the Brexit, no matter the sheer insanity of it all.

But, there’s a credible bear case to be made that regulatory and tax changes in the buy-to-let market — known colloquially as the ‘evil landlord’ sector — are about to prick what has become a very sizeable bubble.

Last week, Deutsche Bank analysts Oliver Reiff and Markus Scheufler made that case over about 70 pages, arguing that for any rational investor, the economics of buying London property have been hammered. Read more

Double Foxtons

How many estate agents can the capital handle? We wonder because it turns out that Foxton’s plans to double in size, again, all while remaining well inside the M25.

We noticed this part of the plan after Credit Suisse published its thoughts on our post that several standard estate agent practices might be illegal and in the sights of the Office of Fair Trading. (Spoiler: turns out it is actually good for Foxtons and Countrywide). Read more

Prime global real-estate prices are stalling

Just as the world was about to launch an inquisition into the prime property witch phenomenon — roughly: if the property fails to rent, the super-prime investor is obviously a witch and must pay additional tax, but if the property rents they’re not a witch, but they still have to pay additional tax — the Knight of Frank comes bearing some interesting global prime statistics.

From the developer’s Prime Global Cities cauldron on Tuesday: Read more

SNB notes that the Swiss real-estate market is easing

The Swiss National Bank on Thursday reiterated its commitment to maintaining a minimum exchange rate for the Swiss franc, noting that in its opinion the currency was still strong.

Inflation numbers were slightly better, though not enough to encourage a shift in the SNB’s long term inflation forecast, which remained unchanged for 2015 at 0.7 per cent. Read more

Quality time with the ailing Dutch commercial real estate sector

The latest bank-sovereign crisis always gets the most attention. Despite the best of intentions, no amount of preparation can get the current flair-up ready to have its place in the limelight stolen. Once torn, salt is rubbed into the wound by means of nasty comparisons that disrespect the unique nature of one’s distress. Ireland is not Greece! Portugal is not Ireland! Italy is not Spain! And Cyprus is special because of gangsta finance and its reliance on deposits for funding…

Grow up. Everyone has problems.

That said, we’ve carved out a special place in our schedules this morning to spend some quality time with one of the middle children. Aren’t we good? And so to the Netherlands, where the government nationalised SNS Reaal, the parent company of SNS Bank, on February 1st. It used its shiny new Intervention Act and everything. Read more

China’s ubiquitous ghost cities

One of the tentative signs of improvement in China’s economy in the past few months has been the apparent reduction in inventory of residential apartments.

Real estate investment was responsible for about 13 per cent of China’s GDP last year, and is a key destination for financially-repressed Chinese household savings, so it’s an important sector. Read more

Chinese property is baaaaack!

Remember Chinese property? How there was a boom in apartment building that amounted to some 10 per cent of GDP, and now there are gazillions of investment apartments sitting empty, and local governments got really hooked on the revenues from land sales, and it all fueled the development of weird and dodgy securitisations which offered a tempting alternative to letting one’s savings lose value in a deposit account? Read more

Santander profit falls 35%

Net profit at Spain’s Santander, the eurozone’s biggest bank by market capitalisation, fell 35 per cent last year to €5.35bn from €8.18bn in 2010 as the Spanish property market collapse and the eurozone debt crisis continued to erode earnings, the FT reports. Santander released results on Tuesday showing it barely made a profit in the final quarter of last year – net profit was €47m compared to €2.10bn a year earlier – after it set aside a €1.81bn fourth-quarter gross charge to clean up bad property loans in Spain. Over the year as a whole, the bank made total net extraordinary provisions of €3.18bn, largely because it is anticipating new provisioning rules likely to be announced on Friday by the centre-right government that took power in Spain in December. Bloomberg reports that the bank previously said it had about €1.5bn in gains from sales of insurance and auto loans unit stakes in the Americas to bolster its balance sheet. Santander has used those funds to partly offset the  one-time provisions.

Terminado del forebearance

Here’s an interesting exercise from Fitch — they’ve counted up 8,235 properties which were repossessed in Spanish RMBS that they rated.

These are some of their findingsRead more

China’s Wen says gov’t won’t ease property curbs

According to a statement following a State Council meeting chaired by Premier Wen Jiabao, China will “firmly” maintain its property curbs and “fine tune” other economic policies at an appropriate time, Bloomberg reports. The announcement saw Chinese stocks fall for the first time in six days. Among the names affected were Anhui Conch Cement, China’s biggest producer of the building material, which lost 1.6 per cent after the government said local authorities should strictly implement tight policies in the property industry in the coming months. Falls in Huaxia Bank and Bank of Communications, meanwhile, drove an index of financial companies to its first drop in more than a week. “It’s too early to celebrate after the rally as the government is still keeping its control policies,” said Tu Jun, a strategist at Shanghai Securities told Bloomberg. “The market may be range-bound at current levels and the uncertainty over policy easing will lead to volatility.”

Property and construction bankruptcies rise

The number of real-estate and construction companies seeking bankruptcy in England and Wales rose by 11 per cent in the third quarter as budget cuts and economic uncertainty led to canceled projects, according to research by Deloitte. Bloomberg reports that a total of 117 property companies and builders went into administration in the period, up from 105 a year earlier. Deloitte said medium-sized firms will be hurt more than larger contractors, and attributed the increase to rising energy prices and cuts to both private and public sector building projects. The next quarter would not bring any improvement, the company said.

BofA aims to sell Merrill property assets

Blackstone is in exclusive talks to buy $1bn of Merrill Lynch’s real estate investments from Bank of America, the FT reports. The sale, which according to people familiar with the matter is still weeks away, would comprise unwanted property investments in Europe, the US and South America, including logistics properties in central Europe, shopping centres in Germany and a Brazilian housing developer. Merrill invested in the assets, often alongside third parties, before the 2008 bust. The sale is part of the bank’s wider efforts to dispose of non-core assets and would effectively conclude the real estate portion of its winding down of assets in its principal investments unit, backed by BofA’s own capital.

Lloyds impaired

It seemed too good to last… and it was.

Lloyds Banking Group has bucked the trend in the UK banks sector and reported a disappointing set of half year figures. Read more

Safe haven alternatives, London property edition

As FT Alphaville and others have duly noted, the search for the ultimate safe haven alternative is on.

RBS now points to one possible alternative, London luxury-home prices. Read more

On the matter of misvalued Chinese land

Phew..! What a relief.

The Chinese danger is no more.
 Read more

Nomura says Spanish banks are funding 24 years worth of housing

During the Spanish boom of 2004-2008 the country started construction of about 3.26m new houses, according to Nomura’s figures, and sold about 2.86m in the Costa Brava beach house craze.

By the end of 2009, however, the financial crisis had erupted and left Spain with a stock of unsold houses of almost 700,000. By 2010, the number of new houses being sold had dropped to 200,000. Read more

China’s uncollateralised, cash flow-less, local government loans

The first time FT Alphaville stumbled upon China’s local government debt problem, it was in the form of one Shanghai district township snaffling a $250m loan from a Chinese bank for a “high-profile investment.”

Small problem — the township spent the loan, secured using a so-called local government investment vehicle (LGIV) without collateral, on completely unrelated development projects. Read more

China’s falling property prices, local debt

Beijing’s efforts to cool the country’s sizzling residential property market are finally beginning to work after a year of moral suasion and threats to local governments, banks and developers, writes the FT. For some, including China’s cash-strapped local authorities, they may be working too well. The average transaction price for land sales across the country fell 32 per cent in April from a month earlier and has dropped 51 per cent since the start of the year, according to government data published by Credit Suisse. FT Alphaville notes that the supply of Chinese housing is also increasing, while the central goernment moved on Tuesday to shore up its local finances with a bailout of municipal debt worth up to $463bn.

Chinese housing inventories are rising

Standard Chartered are on the ball as ever when it comes to developments in the Chinese real-estate market.

In their latest note they warn about the scale of possible over-supply that’s set to hit the market. Read more

Chinese ‘copper financing’ got even more popular this month

So says Standard Chartered bank in their latest Metals Weekly research.

The bank was among the first to bring attention to the fad of commodity-backed financing in China, and now has this update: Read more

David Rosenberg’s cartoon-ish 2011

David Rosenberg’s gone all cartoony.

The Gluskin Sheff analyst seems to have given up on on words and is instead using charts — and Loony Tunes — to illustrate his (very salient) points. Read more

A Chinese real-estate supply shock

Standard Chartered’s analysts have been doing a good job of monitoring the Chinese real-estate conundrum — i.e. will prices collapse or will they just keep booming forever?

In a note issued on Thursday, though, they look more closely at the triggers that might eventually prompt a correction. Read more

RE-ally good news?

Readers will have heard the case against real-estate and commercial real-estate investments. But here, courtesy of Patrick Moonen of ING IM, is a more optimistic view on Wednesday:

Real estate outperformance could continue in 2011. ING IM says there are a number of supporting factors for this prediction – notably that many real estate listed companies have refinanced and that the underlying commercial property is at a turning point on vacancies and rents, while dividend yields in the developed markets are attractive.

 Read more

From foreclosure to writedowns

Foreclosure worries are now (finally) seeping into bank shares and credit.

Four US financials — Bank of America, JP Morgan Chase, GMac/Ally, PNC — have halted foreclosures in all or some US states while they sort out technical deficiencies in their paperwork process. Read more

Reading the tea-leaves in China’s rich list

Retail is in — and real estate is out, says the WSJ’s China Real-Time Report. That’s the message being gleaned from the Hurun Report’s list of Chinese billionaires (ex Hong Kong and Taiwan), which counts between 400 and 500 dollar billionaires in the country. Around 95 per cent of individuals worth over $150 million draw their riches from consumers inside China, from beverages magnates to the lords of the country’s web industry: Baidu’s founder is ranked fifth-richest with the Red Bull soft drink’s Chinese licensee. There’s another Hurun Report list of interest to China, the FT reports: more than half the world’s richest self-made women are Chinese. Zhang Yin, head of Nine Dragons Paper, takes the top spot. Oprah Winfrey is ninth.