January 29, 2016

Set Up To Delete The Home Part Of Housing

It’s Friday desk clearing time for this blogger. “With 15 years in the local market, Keller Williams Realtor Bruce Lynn can remember a day when people bought nice homes in North Texas for under $140,000. ‘You can’t find a $140,000 house anymore,’ he said. Actually, you can. They’re just not as plentiful. At that price point, we found about 2,000 local homes for sale on Zillow. But then we searched for homes in the $300,000 to $600,000 range and found almost three times as many properties available. Prices have gone way up. Lynn said he now has a lot of ‘wow’ days as he looks at recent sales. ‘Where you say, ‘Wow! That house sold that fast, for that price?’”

“Lynn has seen evidence of the increases in deals he’s done. He points to a townhome near downtown Dallas he’s handled in the past. In 2009, it sold for $200,000. The same property sold last summer for $304,000. ‘The second one down, same thing; they paid about $150,000 in 2009. Then in June (2015), it sold for $280,000,’ he said.”

“Developer Steven Witkoff is holding off on converting Manhattan’s Park Lane Hotel into luxury condominiums — for now. He led a group that acquired the property from the estate of Leona Helmsley for $660 million in 2013. Since then, the allure of building high-end homes has dimmed as new towers aimed at multimillionaire buyers crowd the market. ‘The fact of the matter is, the velocity is not what it was,’ said Witkoff.”

“Plans for the Park Lane, at 36 Central Park South, are taking shape as Manhattan’s luxury sales market shows signs of an oversupply after a post-recession construction surge. Prices of the most-expensive homes have been dropping since February. Witkoff and his partners have shelved an effort to raise cash from Chinese individuals through the EB-5 program, which grants green cards to foreigners who invest a minimum of $500,000 in projects that create jobs. The slowdown in the Chinese economy and unresolved EB-5 reform efforts in Congress are clouding the future of the program, Witkoff said.”

“Europe’s biggest lender HSBC will no longer provide mortgages to some Chinese nationals who buy real estate in the United States, a policy change that comes as Beijing is battling to stem a swelling crowd of citizens trying to get money out of China. An HSBC spokesman in New York told Reuters that the new policy went into effect last week, roughly a month after China suspended Standard Chartered and DBS Group Holdings Ltd from conducting some foreign exchange business and as authorities try to limit capital outflows.”

“In Vancouver, an HSBC spokeswoman said HSBC’s Canadian arm already had similar policies in place. The Royal Bank of Canada scrapped its C$1.25 million cap on mortgages to borrowers with no local credit history last year in a bid to tap into surging demand for financing from wealthy immigrant buyers.”

“China’s State Administration of Foreign Exchange said late last year it would soon launch a system to monitor foreign exchange businesses at banks and put people who tried to buy more foreign currency than is allowed on a watch list. Those found trying to purchase more than the maximum $50,000 in foreign currency a year would be placed on a watch list, it said.”

“B.C. led the country in economic growth last year and is poised to do the same in 2016. But some economists and politicians are questioning how rosy that picture is given the province’s reliance on real estate and the B.C. government’s stance on housing affordability. Compared to other Canadian cities, Vancouver’s housing market is uniquely unbalanced when home prices are compared to median incomes. Based on the trend that is happening in places like California, New York, Sydney and Hong Kong, in which wealthy people from emerging economies seek to stash money in real estate as a safe haven, British Columbia should be proactive about tracking and responding to the phenomenon, said Tom Davidoff, a professor of economics at UBC’s Sauder School of Business.”

“‘It doesn’t cost you much to not have a tenant because a house gives you a rate of return in two ways: it gives you a dividend and it gives you a capital gain,’ Davidoff said. ‘It’s sort of a new phenomenon globally, but when you think about it we’re ideally set up to delete the home part of housing.’”

“With Singapore housing prices continuing to fall and transaction volumes still low, fewer people are choosing to become property agents. Former estate agent Brendan Ng was one of those who did not renew his licence this year. Instead, he has been driving a taxi for the past few months because the income is more regular than that of an agent. Huttons agent Megan Chiew took on a new full-time job as an account executive with a trading company in 2014. Said Ms Chiew: ‘My income as an agent was too unpredictable. Some months, I could not close any deal.’”

“The four-storey flat in Kitengela, a suburb south of Nairobi, Kenya, stands imposingly, dwarfing all the other houses in its vicinity. Atop the flat and on the sides are huge signboards announcing that the two and three-bedroom houses are up for rent. About three months ago, the boards carried a different message for about a year. They announced that the houses were up for sale. Having found it hard to sell the houses, the property developer, who has other units in Nairobi, decided to rent them out. It is a path many house developers, especially those who have built apartments, in the East African nation’s capital are taking.”

“‘I must admit things are not really looking good in the property sector. The bubble people have been talking about seems to have burst because both selling prices and rent for apartments are falling,’ said Antony Kuyo, a real estate consultant with Avent Properties in Nairobi.”

“For the first time in nearly seven years, residential rents in some neighborhoods in Qatar are starting to go down as landlords struggle to fill housing vacated by laid-off expats, a local real estate firm has said. ‘We’re in a very different country now than we were 12 months ago,’ DTZ associate director Johnny Archer told Doha News. ‘Rents will drop. It’s inevitable. In fact, they’ve already started.’”

“DTZ estimates that up to 13 towers in Porto Arabia and Viva Bahriya are nearing completion and could increase the number of new units in the Pearl-Qatar hitting the market in 2016 by roughly one-third over last year. ‘This will add a huge amount of supply,’ increasing vacancy and putting downward pressure on rents, Archer said.”

“The Property Institute’s boss says reducing Auckland home values would be devastating for the economy. Ashley Church was responding to a survey which found Auckland now has the fifth least affordable houses in the world. Church said there was no quick fix to a trend that had been developing over decades, and a ‘knee-jerk’ response could do more harm than good. Around 65 per cent of Kiwis owned homes, many of whom used the equity to buy businesses or invest in other assets. ‘So reducing the value of their home could have a devastating effect on the economy and could bring the whole thing down like a house of cards.’”

“Labour’s housing spokesman Phil Twyford said the report confirmed Auckland’s status as ‘a housing basket case.’ The Government had been blaming the Resource Management Act for a decade, but a crackdown on property speculation and a state-backed housing programme was what was needed. ‘The truth is, they are paralysed with fear that the bubble will burst on their watch, so don’t want to tackle the causes of the crisis.’”

“Insufficient funding or poor management of state programs in seemingly disparate areas has allowed high levels of poverty to persist in New Jersey and stymied families’ efforts improve their lives, legislators and advocates said yesterday. ‘It’s incredible to think that the state of New Jersey has higher poverty than it has had in the last 50 years. It’s 40 percent greater than before the recession of 2008,’ said Assembly Speaker Vincent Prieto, who launched an anti-poverty policy initiative last week.”

“The high cost of housing was another focus of the day’s discussions. New Jersey is the fifth-most-expensive state in which to rent a two-bedroom apartment, at $1,309 a month, Housing and Community Network president Staci Berger told the Assembly housing committee. If housing is supposed to consume no more than 30 percent of income, that means a family must earn $52,347 a year to afford such an apartment — an impossible task for someone working at the minimum or even average wage, she said.”

“‘The housing affordability and foreclosure crisis is the albatross around the neck of our economic recovery,’ Berger said. ‘Our housing market is like a food market that only regularly offers filet mignon and caviar; we need Hamburger Helper and tuna fish, too.’”

Bits Bucket for January 29, 2016

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