Do I Take The Offer, Or Do I Run The Risk Of Not Selling?
A report from the Globe and Mail in Canada. “The man on the phone is cheery and confident, with the practised ease of someone accustomed to calming anxiety. There is no need to worry, he says. Buying a home in Vancouver is simple. His company will dispatch people to the airport, then guide an inexperienced buyer through the entire process. No other company will be involved, he promises.His colleagues will come every day to arrange showings and, when a suitable home is found, arrange negotiations with the seller’s agent, he says. ‘Our staff will participate in the whole process, and arrange for you to apply for a loan at the bank,’ he says to a Globe and Mail reporter posing as a buyer.”
“Specializing in Vancouver real estate, Vanfun tells clients it offers the array of services any agent in that city might, down to a website constantly updated with new home listings, each tagged with their MLS number. There’s one key difference. Vanfun isn’t licensed to deal in British Columbia real estate. Neither is the voice on the phone, a man named Ronald Lok who boasts on social media that he is a Canadian permanent resident who has sold at least one multimillion-dollar home in Vancouver. Mr. Lok is not licensed in China, either, according to an online database maintained by the China Institute of Real Estate Appraisers and Agents.”
“In interviews with The Globe and Mail, as part of an ongoing investigation into problems that have emerged in the red-hot property markets of the British Columbia Lower Mainland, Vanfun representatives say they have worked with not just several, but hundreds of agents in B.C. Vanfun has marketed not just single-family homes, but also new apartment complexes, and developers in Canada have partnered with the Shanghai-based company to sell their properties in China, as they sought to capitalize on foreign money in the Vancouver region.”
“Mr. Lok, too, claims success after success for Vanfun property sales on his WeChat. In March, he posted photos of an ocean-view home in West Vancouver bought for $8-million by a person with a Chinese name. One other post shows a document detailing the options selected on a new $1.2-million Aston Martin Vantage. When The Globe and Mail subsequently asked Mr. Lok for comment, he denied involvement with the $8-million home. He cut off the conversation moments later, without answering whether he was licensed in Canada or China.”
“David Wang, the Vanfun co-founder, said he sees no reason to do anything differently. ‘Why would I change my operational model?’ he said. ‘It’s been working well for four or five years – why would I change it?’”
Reuters on China. “A wave of restrictions imposed on housing markets in major Chinese cities last week have unnerved some buyers and developers, cutting the area of new homes sold in places such as Beijing and Shenzhen by more than half. More than 20 cities have imposed measures, including higher mortgage downpayments, to cool hot property markets that have raised official alarm in Beijing and fresh concerns about China’s ballooning debt.”
“Last week was a public holiday to mark National Day, traditionally a high season for property sales. Property agents said prices of new homes sold in the southern city of Shenzhen and in Beijing dropped 20 percent last week to entice buyers, compared with the previous week. ‘The new tightening measures are quite stringent,’ said Alan Cheng, general manager of realtor Centaline Shenzhen. ‘It’s a blow to confidence and people are worried that prices will drop, so they are observing from the sidelines now.’”
“In Shenzhen, a development called ‘Mountain & Sea’ went to the market on Sunday and was the first new launch since the tightening measures last week. According to data provided by realtor Hopefluent Real Properties, 62 percent of the 548 flats had been sold. But Andy Lin, Hopefluent’s market research director, suggested that was not necessarily good news for the development. ‘I had estimated a selling price of 63,000 yuan before. It’s now dropped by around 20 percent,’ Lin said. ‘At this price, a 62 percent selling rate is very low.’”
The New Zealand Herald. “More Auckland homes appear to be failing at auction, say industry players who suggest new LVR restrictions are doing their job of slowing down city investors. This week, interest.co.nz reported that, of 130 Auckland properties auctioned around the city by Barfoot and Thompson last week, an overall 39 per cent sold under the hammer. Recent figures cited by another auctioneer showed 45 per cent of homes being passed in on the North Shore, along with 40 per cent in central and eastern areas, and 28 per cent in South Auckland.”
“Mortgage adviser Bruce Patten estimated around half of homes currently going to auction in Auckland were selling. ‘The problem you’ve got at the moment is vendors have expectations of the price their neighbour got back in March and think that’s what their house is worth,’ he said. ‘It was never worth that, and most of them, within two or three days, are coming to the realisation that, do I take the offer that’s on the table now, or do I run the risk of not selling?’”
From the Australian. “More than 170 off-the-plan apartments have been listed on a new online service in the past two weeks, as mostly Chinese investors rush to find new buyers in the wake of the lending freeze by Australian banks. The Melbourne-based online property portal Aofun, which primarily offers real estate services to Chinese buyers, launched a so-called ‘nominee sale platform’ at the end of last month, as many off-the-plan apartments were not able to settle and would be brought to the market again, chief executive Jason Zhu said.”
“‘This is purely driven by demand. Most buyers who list with us are hit by the lending freeze; they are just trying to resell under financing pressure. No one can really tell how serious the problem will be, but with so many new apartments bought by overseas buyers, I would say many of them will find it hard to settle,’ he said.”
“The extent of the impact on Australia’s property market remains unclear, but could be severe given that overseas buyers comprise about 30 per cent of the new apartment market. At some individual projects, the portion can be 50 per cent or even 100 per cent, industry experts say. In the current market, most original buyers are prepared to lose some of the deposit they paid, which means many apartments were selling at a discount to the contract price, Zhu added.”
“Mr Li, a sales representative in the telco industry who declined to give his first name, is one reseller who would rather lose money to offload the Melbourne CBD apartment his parents bought for $440,000 two years ago. They failed to settle the purchase in July because of the lending freeze, and since then have been desperately looking for a new buyer through their agent. ‘We can only get 30 per cent of our deposit back now, but it’s good that we finally found a buyer,’ said Mr Li.”
