You Can’t Sell What You Don’t Have
The Canberra Times reports from Australia. “An Australian Property Monitors report out today shows the national housing market is dampening. Senior economist Andrew Wilson said Canberra’s strong market could be deterring buyers. ‘Canberra median house and unit prices recorded significant falls over the June quarter with affordability barriers and subdued confidence appearing to affect the market with declining levels of buyer activity,’ Dr Wilson said.”
“The figures reveal houses in Tuggeranong, Belconnen, Woden, Gungahlin and Weston recorded the strongest growth in the past 12 months, with houses in Conder rising 19.8 per cent from a median $430,000 a year ago to $515,000 in the June quarter. NATSEM principal research fellow Ben Phillips said affordability had become an Australia-wide issue. ‘It’s no longer just capital cities that are facing affordability issues,’ he said. ‘Affordability levels in Wollongong, Newcastle, Mandurah and the Gold and Sunshine Coast are now on par with major capital cities.”’
Business Live on Thailand. “The MahaNakorn — Great Metropolis — will tower over the Thai capital when it is finished in 2014. The 19 billion baht ($640 million) tower will house apartments, a shopping centre and a Ritz-Carlton hotel. The Bank of Thailand has described 2010 as the ‘golden year for real estate businesses’, with strong demand for homes — driven by low interest rates and increased consumer confidence — causing a flurry of new building.”
“Property research group Agency for Real Estate Affairs (AREA) figures show there were more than 135,000 unsold property units in Bangkok and its suburbs as of July 2011, including projects under construction. Another 100,000 units are expected to come in to the market next year. Developer Sorapoj shrugged off jitters over the health of the real estate sector. ‘I’m not worried about oversupply. The new government will do whatever it takes to prevent bubbles,’ he said.”
From Mizzima. “The real estate market boom in Rangoon has reached a peak and the boom is likely to burst soon say local residents but seasoned real estate brokers and construction companies say maybe not. Kyauktada and Pabedan have a bigger demand and the prices are highest. The prices for ground floor flats rose five fold in the last five years with the current price of 30’x60’ flats between 250-400 million kyat (US$ 312,500 to 500,000) but there are few sellers for these flats. Properties in Pyi Road and Kabaraye Pagoda Road are also rising to 300,000 to 500,000 kyat per square foot (US$ 375 to 625).”
“Before 2007, 50 per cent of a property’s price was levied as profit tax and then after 2007, it was changed to 12 per cent for above 5 billion kyat (US$ 6.25 million at the current exchange rate) of property price and 15 per cent for below 5 billion kyat of the property price, the Internal Revenue Department announced. Under the protection of this law, the money launderers entered the real estate market and bought many high-price properties.”
“‘Since 2008, the price of real estate has skyrocketed. After the gem emporium, the Chinese-Shan bought properties by paying the calling prices without bargaining if they liked them. Then the calling prices became market prices later,’ a seasoned real estate broker said.”
“Land prices for big plot along Pyi Road and Kabaraye Pagoda Road rose to 500,000 kyat (US$ 625) per square foot from 100,000 kyat (US$ 125). Some assume the property market bubble will burst soon but a noted construction business firm owner said that the current prices for real estate in Burma are not as high as property market prices in most Asean countries, such as Thailand, Cambodia, Vietnam and Singapore.”
“‘The property price in downtown Singapore is much higher than in Rangoon. In Vietnam too, the price is nearly US$ 20,000 for each square meter (3.3 square feet). In Rangoon, the highest price is just around US$ 1,000,’ he said.”
Channel News Asia on Singapore. “The Housing and Development Board (HDB) is launching a residential site at Upper Serangoon Crescent and Upper Serangoon Road for sale by tender. Slated for condominium development, the site can potentially yield 860 apartment units. Under its second-half Land Sales Programme for this year, the government has placed 17 sites on the Confirmed List and 13 sites on the Reserve List for private residential development. Together, these 30 sites can potentially generate about 14,200 private residential units.”
“At the end of the second quarter, there was a total supply of 71,111 uncompleted private residential units in the pipeline with nearly 33,900 units remaining unsold.”
“According to data from the Institute of Real Estate Studies (IRES) at the National University of Singapore, prices of small units grew 6.9 per cent from March to May after the cooling measures of January this year. Associate Professor Lum Sau Kim of the IRES-NUS added that the creation of a sub-index for small units can help better capture and measure price movements on the ground.”
“These small units, which measure 47 square metres (506 square feet) or less, have increased in importance since 2009, with their prices trending higher compared to non-landed properties in the central and non-central regions during the past two years. As such, IRES said it will introduce a separate index - apart from its Singapore Residential Price Index (SRPI) - to measure the prices of ’shoe box’ units as their price volatility has a significant impact on overall housing prices.”
From Bloomberg. “China’s home prices rose at the slowest pace in 11 months in July after the government expanded efforts to curb the risk of an asset bubble, according to SouFun Holdings Ltd. Nationwide purchase restrictions may damp local economies, said Liu Li-Gang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. ‘The one-size-fits-all rule may not have as good an effect as expected because local governments still highly rely on land sales for revenue,’ Liu said in a phone interview.”
“‘The property market in China is headed for a big bust,’ Puru Saxena, chief executive officer of Puru Saxena Wealth Management in Hong Kong, told Bloomberg Television on July 25, citing excess capacity and empty condos.”
The Vancouver Sun in Canada. “In a city as dense as Vancouver, there’s a certain pleasure in getting to know your neighbours. But while a friendly, close community can offer safety and comfort, there also comes a time for peace and privacy. In Burrard Slopes, where one might think it’s difficult to find that balance, Henriquez Partners and Westbank Developers may have found a solution in the pre-sale condo project 6th and Fir.”
“The concept of a boutique condominium project ‘caters to the market that’s looking for an intimate home,’ says Alexa Paukkunen, the sales and marketing director for Magnum Projects, organizers of 6th and Fir sales, which launch on Aug. 6. ‘It’s nice to have only three neighbours on your floor and 49 other households in your entire building.’”
“The smallest suites are one-bedrooms that measure 513 square feet, priced at $309,000. Paukkunen stresses that, relative to many new pre-sale condominium projects in the city, 6th and Fir is a rare project offering homes accessible to those even on a starter budget. ‘The one-bedrooms are achievable for a lot of people,’ she says, adding, ‘For a view suite, at around $400,00, we expect singles and couples looking for something different than everything that’s out there.’”
The Toronto Star in Canada. “It’s pretty hard to miss a new 30-storey condominium tower under development. And let’s face it: a lot more of these towers are being added to our skyline today than only a decade ago. Highrise construction is certainly on the increase, not only in Toronto but across the entire GTA. RealNet research shows that there are currently 364 active highrise projects in the region. That’s 73 more compared to five years ago.”
“To really understand what is happening in the highrise market, you must first appreciate what has been happening to the traditional new home market. Five years ago there were 502 active lowrise projects across the region. Today, there are only 308 active sites. That’s a staggering decrease of 194 sites, or almost 39 per cent in five years. The ;Real Insight; here: what we’re seeing is actually a tale of two housing markets, with lowrise in a substantial decline and highrise in steady increase.”
“A number of factors have resulted in the decline of lowrise housing and an increase in highrise housing construction. Provincial land intensification policies, limited supplies of developable land, and servicing and approval constraints — all have contributed to steadily diminishing supplies of builder lowrise inventories over the past decade.”
“And you can’t sell what you don’t have.”
New Westminster News Leader in Canada. “On a rare sunny day, two men tending a barbecue at a recent summer get-together may have had this conversation: —This is a nice neighbourhood. How long have you guys lived here? —Four years.”
“—It’s still pretty reasonable buying out here I guess? —Yeah, pretty good. We bought this one for 700 grand. Might go for a bit more now, maybe 800. —800? Man, that’s amazing. I didn’t know houses out here were that cheap —Like borscht. You own a place?”
“—No I’m still renting in Vancouver. My wife and I’ve got a nice two-bedroom that we’re only paying two grand a month for, but still, I’d really like to get into the market…But even the tear-downs are a million-plus. A friend lives out in Point Grey and he had a realtor knock on his door and offer two million on behalf of a client, sight unseen. I mean, a million I could probably do. But two? Nuh-uh.”
“(A woman inside the house calls out, asking if the burgers are ready) -Hey, I didn’t ask, how’s the teaching job going? Still working part time? —Yes. —And Caroline? She’s still doing her masters? —Almost done. One more term left, and then hopefully she’ll get a job soon. We’ve got some pretty big student loans to pay. Meantime, we’ve got to get ourselves a house soon. Time is running out. Prices are only going to keep going up.”
“—Agreed. People talk about a bubble. I don’t believe it. Vancouver’s different. Everyone wants to live here now. Mild climate, the population’s booming, it’s beautiful and you know, there’s only so much space to build on before you hit the mountains or the sea. —You are so right. Only bubbles around here are in these bottles.”
“(The two men tap their beers in a toast) —(in unison) Cheers.”
