Investors Are Looking To Sell Before Santa Claus Comes
The Daily Sabah reports from Turkey. “Often referred to as the ‘locomotive’ of the Turkish economy, the construction sector in the burgeoning nation has steamed ahead over recent years in spite of global and regional turmoil, but the question remains as to whether there is enough track left for wolfish growth. Burhan Özdemir, Chairman of the Independent Industrialists’ and Businessmen’s Association Construction Sector Council said said the drop in sales in the first quarter of 2014 was largely due to the political events which occurred in Turkey in December 2013, worsened by the sliding value of the lira and interest rate rises in January 2014.”
“‘When we compare Istanbul with Moscow, Rome, Berlin, London et cetera, and look at average [housing unit] sales price, we see it [Istanbul] is half that of other major cities so Istanbul has room to move regarding prices. There is still potential for people, internal and foreign buyers, to profit in Turkey,’ Özdemir said, adding that speculators expect to see optimum housing prices in Turkey.”
The Sydney Morning Herald in Australia. “Figures detailing the explosion in investment in Sydney’s property market have underlined Reserve Bank concerns that a wave of speculation is making the property market increasingly unbalanced. Investors have lit the fuse under the biggest residential property boom in more than a decade and account more than 55 per cent of all new property loans, according to ANZ Bank economists.”
“The health of the Sydney property market will be tested in coming weeks with a record number of sellers about to take their homes to auction. ‘It is an unprecedented listings boom,’ said the senior economist for the Domain Group, Dr Andrew Wilson. ‘A lot of people who have bought are now looking to sell and they all want to get it over and done with before Santa Claus comes.’”
The Time of India. “The slowdown in India’s real estate sector continues with the number of new construction projects declining sharply in the three biggest realty markets in the third quarter of this year, global real estate consultancy firm Cushman and Wakefield has said in a yet-to-be-released report.’
“New launches were down 54% in the national capital region, 27% in Bangalore and 11% in Mumbai during July-September 2014, as compared to the same period last year. The country as a whole saw a decline of 21% in new projects. ‘There is oversupply in most of these cities due to weak market sentiment and slower growth rate in sales, due to which new launches have remained checked,’ said Shveta Jain, executive director, Residential Services, India.”
The Straits Times in Singapore. “It’s fast turning into a tenants’ market with an impending flood of new apartments set to drive down rents. Market experts warn that it is not just owners at newly completed developments who might have difficulty finding tenants or securing higher rents. Investors at older properties nearby are likely to feel the heat from the sheer number of new units as well. ‘When many get the keys to their new houses at the same time, there could be as many as 30 to 40 people who want to rent out their units all at once,’ said PropNex Realty chief executive Mohamed Ismail. ‘And these new units may end up having a lower rental rate because of the competition.’”
“Look further ahead and the situation becomes even more alarming for landlords: There are 25,000 new units expected to be completed between this quarter and the end of next year, with more than half in the suburbs. A significant proportion of the 16,000 already built in the past year have been erected amid clusters of new homes, indicating that certain parts of the island are already experiencing a sudden supply glut, according to consultants DTZ.”
The Epoch Times on China. “More than 60 percent of loan underwriting companies in Shanghai have declared bankruptcy. Shanghai has 72 registered underwriting companies, but only 30 are still running, according to Shanghai-based First Financial Daily. Loan underwriting companies take a premium from a business, excluding commission, and in return promise to pay the bank that has offered a loan to the business in the event of a loss. Shanghai is not the only place where the underwriting industry has taken a hard hit. As of the end of June, the loan underwriting industry has incurred defaults of 2.8 billion yuan (US$458 million), with a default rating topping 11 percent.”
“Non-performing loans in Guangdong escalated from 6 billion yuan ($981 million) at the end of last year to nearly 200 billion yuan ($32.7 billion) at the end of July. Nearly half of the non-performing loans had ties to the steel industry. Several high-level executives went missing at Ht-Sinyong Underwriting Company in Sichuan, Sina reported on July 10. Also in Sichuan, Xia Xiaolong, president of PengRun Underwriting Company, absconded with nearly 200 million yuan (US$32 million), Sina Finance said on July 12. ‘After reshuffling in the industry, there could only be a few large companies left in the underwriting industry,’ said Chang Hong, chairman of China Create Financial Holding Group.”
The Vancouver Sun in Canada. “It’s funny the things a journalist can learn travelling the world with eyes wide open. I’m just back from trips to Tahiti, London, Los Angeles and Sydney. In every instance I was shocked by the skyrocketing cost of real estate, all driven by rich Chinese investors. However, no one I’ve met has bothered to investigate how this amazing accumulation of wealth has occurred. Maybe it’s time someone did.”
“Many Vancouver property owners who bought their homes a generation ago have become very wealthy thanks to Chinese investors laundering their looted dollars into our real estate market. All these property owners vote, and no doubt candidates for Vancouver civic office next month are well aware of that. The fact the vast majority of Vancouver citizens lack sufficient income to buy a home does not seem to concern the mayor or city council.”
“Many Vancouver property owners who bought their homes a generation ago have become very wealthy thanks to Chinese investors laundering their looted dollars into our real estate market. All these property owners vote, and no doubt candidates for Vancouver civic office next month are well aware of that. The fact the vast majority of Vancouver citizens lack sufficient income to buy a home does not seem to concern the mayor or city council.”
“Kowtowing to rich foreign investors who have substantially raised the cost of living in Lotus Land may be convenient politics this month, but it doesn’t make for good long-term policy. Perhaps it would be wise for Vancouver citizens to think further ahead to the future.”
