A Good Many Of These Have Been Bought By Investors
The Sydney Morning Herald reports from Australia. “In the hyperactive world of online Chinese property forums, prospective buyers swap tips on real estate trends. But the talk on Australia-focused chat threads have been tinged with one worry after another. Chief among those worries are the increasing difficulty to get large amounts of cash out of China, and a crackdown from the big four Australian banks on loans obtained based on overseas income. ‘I bought an off-the-plan apartment and now the settlement date is getting close. My agent and loan planner told me that banks now are not accepting loan applications with overseas income,’ asked one poster on Tigtag. ‘They also say I need to make a face-to-face interview if I apply for loan. I’m now back in China so I’ll have to authorise an agent to manage the handover [in Australia]. So they suggest I sell the property before settlement. Is this right?’”
“Wang Peng, general manager of overseas-focused Chinese property group UNME, says the tightening of rules aimed at foreign buyers were being interpreted by Chinese buyers as a potential signal of more to come. The crackdown on loans substantiated by overseas income has the greatest potential to impact all but the wealthiest of Chinese buyers, says Wang, who owns investment properties in Australia himself. He says many buyers had bought off-the-plan properties but are now scrambling to find alternative loans before settlement, often forced to pay higher downpayments. ‘This is the most disadvantageous part to overseas investors. The impact is quite big and very direct.’”
From MarketWatch on China. “The slumping property markets in many Chinese cities are generating one kind of boom: in legal disputes. Even as the beleaguered property market shows signs of inching out of a two-year property downturn, some home buyers have begun suing property developers over facilities advertised at the time of purchase that were never built. Developers, meanwhile, are taking local governments to court for refunds of money spent to buy land when prices were soaring.”
“In Yuyao, a small city south of Shanghai, a group of nine home buyers last year sued state-owned Poly Property Group Co., alleging false advertising. Home prices have been falling in Yuyao, according to local residents and property developers. The plaintiffs said Poly failed to build a shopping mall, theater, school and other amenities included in the marketing for Poly Jordan International. Initially, the company offered a settlement that included 50,000 yuan in cash and a parking lot, but the plaintiffs declined. ‘We’ve tried to talk to the developer many times to resolve this but they never offered fair compensation,’ said Zheng Zhixin, one of the plaintiffs, who bought an apartment in 2012. ‘Litigation appears the only way left.’”
The Financial Express in India. “Inventories of luxury apartments in Mumbai remain high with real estate watchers counting close to 2,300 unsold apartments across the city. Each of these spacious apartments is priced at a minimum of Rs 10 crore taking the total value of the flats to an estimated Rs 23,000 crore. According to data sourced from PropEquity, the unsold inventory in projects coming up in just the five micro markets of tony south Mumbai — Lower Parel, Mahalaxmi, Mumbai Central, Prabhadevi and Parel, stands at a staggering 928 apartments.”
“Because unsold inventory is in advanced stages of construction, some of it commands a premium to the launch price. The value of unsold inventory in these five micro-markets could be in the range of R10,000 crore, if one assumes they’re between 4,000 sq ft and 7,000 sq ft, and fetch the current market price. Ashutosh Limaye, head (research), JLL India believes sales of these top-end homes could be ‘just about okay’ over the next three to four quarters. However, as he points out, ‘a good many of these have been bought by investors.’ That means these may remain unoccupied for a long time.”
From Gulf News on Dubai. “Dubai’s high-end apartment rentals are facing extreme duress, with the number of enquiries recording a marked decline in March. Landlords with units in upscale high-rises in Downtown, Business Bay and those on Shaikh Zayed Road are reacting by dropping rents or being forced to leave their units vacant for longer, according to a new update from Asteco.”
“‘On SZ Road where rents for a two-bed might have been Dh160,000-Dh190,00, landlords are being forced to bring it down if they need to retain the tenant,’ said Julia Knibbs, Associate Director – Research & Consultancy at Asteco Property Management. ‘A similar trend is happening in Business Bay, though maybe not to a similar extent. Wherever a tenancy contract is deemed as too expensive, tenants are demanding a downgrade. And in most instances they are getting it.’”
From Fulham SW6 in the UK. “Fulham’s property market continued to cool off in the frosty first three months of 2016, with prices falling and the volume of sales down - mainly due to the lack of flats changing hands. The overall average price fell by a modest 2.9% from £1,124,412 between October and December to £1,078,996 between January and March. Terraced houses also fell by 2.9% from £1,742, 138 in the previous quarter to £1,642,130. The average flat price however fell from £813,530 to £694,086 - a drop of 14.3%.”
“Also alarming for local agents was the reduction in the number of sales - down by almost a half from 230 to 126. And again flats and apartments were hardest hit, down from 153 to 74. This slowdown seems surprising, since there are two large developments in Fulham with apartments for sale. The top of the market also remained slow withthe highest priced sale so far this year is a six bedroom house on Broomhouse Road which went £3,010,000 - having previously been on the market for £3,350,000.”
“Josh Woodfin of local estate agent Brik, says the slowdown has a number of reasons: ‘Many wealthy overseas buyers have been deterred by high house prices in London, a weak eurozone economy and the fact that the pound has strengthened significantly against the euro in the past year, making it even more expensive for many Europeans to buy property in the English capital.’”
The Daily Mail in the UK. “For those of us stuck in the mundane world of mortgages and rent, it’s hard to feel sorry for them, but spare a thought for celebrities trying — and failing — to sell their homes. Palatial pads that would once have been snapped up within days are lingering on the market for months at a time, forcing sellers to slash the asking price. Shirley Valentine star Tom Conti has reduced the asking price for his house to £15million, from £17.5million. Meanwhile Ricky Gervais has reduced his from £7.7million to £6.9million.”
“Many thought that former Take That star Robbie Williams had overpaid when he bought his seven-bedroom, eight-bathroom Wiltshire manor house for £8million in 2008. Only 18 months after buying it, he tried to sell for £7.5million — and it’s been on and off the market ever since. In 2013, it had an asking price of £5.5million. Now it’s believed to be quietly for sale again at the same price — a hefty loss on what he paid.”
“Former hell-raiser Noel Gallagher’s pretty West London home — on the market since last October — is now on the market for £11.5million, down from £13.5million. He has three other properties, but wants to ‘upgrade’. The Oasis singer has complained that the home is proving hard to shift in the current market, saying: ‘If there are any wealthy Russians reading this story, give me a call, please.’”
