Does Prosperity Come With Less Affordability?
A report from the Irish Independent. “The iconic show of the Noughties was, of course, Location, Location, Location. People buying houses, just like us. It’s still particularly popular with Irish people. We’ll watch anything that proves our neighbours are a bit on the thick side. The proof here being that university-educated Brits seem unable to ring an estate agent and place an offer on a house. Instead, they go to a hipster bar with a Kirstie and Phil to discuss strategy.”
“Location, Location, Location is proof positive that Britain is a nation of goldfish. They must be on their fourth housing bubble since 1990. And still there is no shortage of yuppie couples willing to pay 750 grand for a one-bed flat in London because it’s only three tube stops from an artisan-bread shop.”
“We’re watching over here, the wounds still open after our own crash, shouting, ‘Don’t do it, you crazy yuppie couple, you’ll be stuck there for life.’ They never listen.”
The Malaysia Chronicle. “Property buyers should hold off on purchases until at least next year to enjoy lower prices as cooling measures implemented by Bank Negara Malaysia set in. Prices have stayed stagnant and the property market slowed somewhat in the last year, indicating that tighter lending rules and related measures are achieving their desired impact. National House Buyers Association secretary-general Chang Kim Loong said property buyers should wait as the cooling measures were working well. Prices have gone down and are expected to reduce further.”
“‘Do not buy new property this year. There is still the secondary market and auction properties that can be considered at cheaper prices,’ he said after speaking at the forum, themed ‘Does Greater Prosperity Come With Less Housing Affordability?’ yesterday.”
“Before the central bank’s cooling measures, property prices were on a steep climb, particularly in key markets, believed to be spurred by excessive speculation. Chang said the investors club were now rushing to sell their properties at lower prices as there were no takers, and predicted ‘many foreclosure cases soon due to this.’”
Sky News in Australia. “The Australian share market has plunged 3.8 per cent, pulled down mainly by a big sell-off of resources stocks, especially global miner BHP Billiton. The sell-off stripped almost $60 billion in value from the market. OptionsXpress market analyst Ben Le Brun said the local bourse was an absolute bloodbath on Tuesday, with selling across all sectors. ‘Resources have led the way down on renewed concerns about China,’ Mr Le Brun said.”
“The Australian share market has taken its worst beating in four years over the September quarter, mainly because of weakness in economic powerhouse China. The market has fallen by just over nine per cent in the past three months, wiping about $160 billion from its value. ‘What’s going on right now is that there is a test of the market’s belief of the commodity story and China going forward,’ IG market strategist Evan Lucas said.”
The Australian Financial Review. “The supply of new apartments and a retreating, resource-based economy is starting to weigh on the market, with more units selling at a loss in the June quarter than the previous three months. The proportion of apartments selling for less than the purchase price rose in Melbourne, Brisbane, Canberra, Perth and Darwin in the second quarter, bringing the capital city average to 8.4 per cent from 8.1 per cent in June, CoreLogic RP Data’s latest Pain & Gain report shows. Nationally, loss-making apartment sales ticked up to 12.6 per cent from 12.5 per cent.”
“The greatest effect of new supply on prices was seen in the Melbourne central business district CBD, where as many as 20 per cent of all sales – where the product is overwhelmingly apartments – were sold at a loss, for a median figure of $28,125 per transaction. The pain was greatest in the resource-dependent capitals of Perth and Darwin. Loss-making apartment sales in Perth jumped to 18.7 per cent of all transactions from 11.9 per cent in March, while in Darwin the figure jumped to 25.3 per cent – meaning more than a quarter of all apartments and units are selling for less than their purchase price – from 17.3 per cent.”
The New Zealand Herald. “Chinese property investors are rapidly disappearing from the auction room, says the boss of Auckland’s biggest real estate agency. Peter Thompson, of Barfoot & Thompson, blames financial instability in China for the dip in those bidding - partly fuelling the market slowdown. ‘There are a lot less Chinese in the auction room at the moment and at the open homes,’ he said. ‘The market has changed and some of that is the Chinese buyers. There are more requirements in getting money out of China now and that is having an impact.’”
“This week, the Herald on Sunday paid a visit to the Barfoot and Thompson city auctions for central Auckland suburbs. Despite a full room it was clear the frenzied bidding on any and all properties had slowed. A number of houses were passed in with few or no bids.”
“A three bedroom bungalow in Ellerslie sold for more than $1.5 million - almost double it’s CV and evidence character homes in desirable suburbs are still hot property. Dawn Buxton, Barfoot and Thompson agent for the Ballin Rd house, said interest was high and she expected the sale price to be about $1.2m. The reserve price of $1.25m was passed easily with the owners pocketing $311,000 more than they would have accepted. ‘We really didn’t expect it to go as high as it did, the vendors were extremely happy,’ Buxton said.”
Bloomberg on Hong Kong. “Cosmetics retailer Colourmix will move to Hong Kong’s Russell Street, once the world’s most expensive shopping strip, and pay about 40 percent less than the former tenant as China’s economic slowdown rattles the city. Hong Kong’s retail property market has slumped with China facing its slowest growth in a quarter-century. ‘Landlords have to face the reality, no matter how reluctant they are,’ Lawrence Wong, a director at property agent Sheraton Valuers Ltd., said in a telephone interview Saturday. ‘It’s still better than leaving their property empty.’”
“Hong Kong’s residential market is also experiencing weaker sentiment. ‘Housing market outlook will likely become more cautious amid increased volatility in the global and Hong Kong’s financial markets,’ the Hong Kong Monetary Authority said in a report. ‘The risk of downward adjustment has picked up steadily.’”
The Associated Press. “Several local officials in eastern China have been detained after a man died in a fire at his home while defending it from a demolition gang, state media reported, underscoring continuing violence in the country’s frequent land disputes. Those suspected of culpability in the death of homeowner Zhang Jimin had been directly responsible for an urban renewal project in Difang township in the Shandong province city of Linyi, the Xinhua News Agency and state broadcaster CCTV said.”
“Zhang was burned to death and his house gutted in Monday’s incident, which followed a prolonged disagreement over terms of compensation for the demolished home. Cellphone footage of the incident circulating widely on the Internet shows what appears to be a group of men throwing stones and gasoline-filled containers into the house, which quickly begins billowing smoke while flames shoot from windows.”
“The use of thugs and strong-arm tactics in housing demolitions is relatively common in China, where local governments are heavily reliant on land sales to top up their coffers. Corrupt officials can pocket generous kickbacks through collusion with real estate developers, giving them even more incentive to force out incalcitrant homeowners.”
“Among those detained were Difang’s Communist Party secretary Wei Yunbo and Guan Yansheng, party secretary of the township’s Donggu community, Xinhua said. The total number of people detained was not immediately clear. An investigation at the city government level was ordered after the video footage and eyewitness reports raised questions about official claims that Zhang had set the fire himself. In a post on its official microblog, the government of Pingyi county, which directly oversees Difang township, had said that Zhang had purchased gasoline and that his death was a matter of ‘his own behavior.’”
