July 28, 2015

Prices Either Continue To Go Up Or They Crash

CTV report from Canada. “These days, buyers hoping to land a condo in Vancouver’s highly competitive housing market will need more than a down payment to close the deal. This past week, hundreds of people spent days in line ahead of the Saturday pre-sale for a new condo development on the waterfront in the False Creek area. Those who couldn’t commit to camping out themselves hired somebody to do the waiting for them. Chris Malkin and his team camped out for a week, representing out-of-town buyers and those who didn’t have the time to stand in line. Malkin, who says he has clients from Victoria, Seattle, and even mainland China, described the condo-buying frenzy as ‘fun, exciting, but insane.’”

“Andrey Pavlov, a professor of finance at Simon Fraser University, said that housing and the industries associated with it could account for up to 25 per cent of the provincial economy. And the housing bubble is more likely to burst than slowly deflate, Pavlov said. ‘It’s tricky to get a two or three or four per cent decrease,’ he said. ‘The way these things work is they either continue to go up or they crash.’”

Domain in Australia. “Frenzied bidding between six developers resulted in an unrenovated Granville house selling $1.53 million over reserve at auction on Saturday morning. The house sold for $2,781,000. Selling agent Tony Eltakchi of LJ Hooker Granville said the owners had, until recently, been unaware their land had been rezoned. After the hammer fell the pair were close to tears. They said the result had changed their lives. Soon after, they drove off in their car. ‘They were off to Picton to buy a new house,’ said Mr Eltakchi.”

“In other auctions, a four-bedroom house at 46 Thurlow Street, Redfern, was hot property, going for $1.9 million - $100,000 over its reserve through Ray White Surry Hills. The couple who bought it were ‘chuffed.’ ‘We can’t believe we got it under $2 million,’ IT manager James Sillence said. As an indication of how much stronger the market is this year than last year, the same home was listed for sale at $1.9 million last September and then discounted down to $1.7 million before being withdrawn from sale.”

The New Zealand Herald. “A second real estate boss has backed a foreign buyers’ register, after support from Barfoot & Thompson’s Peter Thompson. Geoff Barnett, the New Zealand manager of international real estate agency Century 21 with 20 offices throughout New Zealand, said such a register made perfect sense. Labour’s data pointing to large numbers of Chinese-based buyers speculating on Auckland residential properties did not surprise Barnett.”

“‘It’s confirming everyone’s suspicions which have been held for a long time. Sydney has exactly the same thing. There are reports of bus loads or bus tours from China and India, going out to the suburbs and buying properties, about 10km from the CBD,’ Barnett said.”

The BBC in the UK. “Foreign criminals are laundering billions of pounds through the purchase of expensive properties, which is pushing up house prices in the UK, the National Crime Agency has said. Its economic crime command director, Donald Toon, told the Times that London prices had been ’skewed’ as a result. He said prices were being artificially driven up by criminals ‘who want to sequester their assets here in the UK.’ Hundreds of billions of pounds are laundered in the City every year, according to the NCA, and it said investigations were intensifying.”

The Daily Express in Malaysia. “There is no chance that the prices of properties will go down even with the country facing an economic slowdown now, said Sabah Housing and Real Estate Developers Association (Shareda) Vice President John Chee. He said prices of properties can either go up or stabilise and in the current economic situation, prices are at a standstill. He said the imposition of the six per cent GST that led to rising construction costs and increase in property prices, falling of crude oil prices and oil palm prices as well as the plummeting of the ringgit value to name a few had greatly affected the property industry.”

“‘No doubt it is in our wish list to expect the property market to recover and stay resilient as our industry spearheads moving forward for a better remaining year of 2015 and coming 2016 as we experience the changing economy and development paradigm,’ he said.”

The Myanmar Times. “Prices for standalone housing have started to drop, the latest sign that the real estate sector has entered a decline. Several agents told The Myanmar Times that prices are in some cases as much as 30 percent off their peak last year. Rental prices for houses have also somewhat dipped, according to Ma Myat Thu, an agent at Moe Myint Thaw Dar real estate. ‘It’s been quite a back-down in the price of standalone houses.’”

Today Online on Singapore. “Private home prices in Singapore have recorded their longest losing streak in more than a decade after another decline in the April-to-June quarter. The price weakness came as the vacancy rate climbed to 7.9 per cent in the second quarter from 7.2 per cent in the previous three months amid a rising glut of completed homes. Mr Desmond Sim, research head for Singapore and South-east Asia at property firm CBRE, noted that this followed the record number of home sales between 2011 and the first half of 2013.”

“‘At that time, there was a surge in land sales and liquidity was cheap… While there may be a lag between the time a project is completed and when occupants take residence of the units, the reality is that the market is still coping with an overwhelming number of completions,’ he said.”

Want China Times. “The stigma facing Kangbashi, which was labelled a Chinese ‘ghost town’ in international press, has been tough to shake. A futuristic town built with coal money in 2011, Kangbashi has long been the epitome of heedless city construction and the resulting housing bubble. Four years have passed since it first earned the blighted label and the town remains busy fighting for its image.”

“For Kangbashi and Ordos, however, image is not the only worry. In Ordos, coal mining used to make up 70% of the city’s GDP, but now coal mines have difficulty paying wages and fallout from the property bubble left most of the area’s ‘newly rich’ in heavy debt. Xiao Xiaohong, an Ordos native in her 40s, recalled the ‘good old days’ when coal prices soared and they reaped in money. ‘Those years were crazy. It was just me and a couple of friends, idling away time and cash. I went shopping and visited an apartment in Beijing. Without a single moment of hesitation, I bought it right away, with cash,’ she said. ‘Now after the debt crisis and housing bubble, we’ve fallen on our bottom, almost busted.’”

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