An Ever-Growing Glut
A report from the New Zealand Herald. “Ron Hoy Fong, with 31 properties valued at $23 million, says the Reserve Bank loan to value (LVR) lending crackdown and the Government’s moves against foreign buyers have taken their toll on places landlords would usually buy. Hoy Fong said many people did not realise the market for some places had turned. ‘Prices are dropping in certain areas. It’s the investment properties that are just dropping right out, as much as 20 or 30 per cent,’ he said.”
“Other reports are also coming in of lower auction clearance rates, at around 80 per cent a few years ago but now down as low as 30 per cent at some major Auckland agency auctions. Barfoot & Thompson, with about 42 per cent of Auckland’s residential market, reported lower sales volumes in October, falling from March’s 1341 to 778 last month, the second lowest this year.”
The Australian Financial Review. “Melbourne developers are selling too many housing lots to the Chinese and are running into funding trouble, BRW richlister Nigel Satterley has warned. Mr Satterley said it was his understanding that between 4000 and 5000 lots – about 20 per cent of the market – were being sold into the Chinese market every year.”
“‘Developers are over-selling house and land packages into China. Some of these deals will not proceed because of tighter bank funding to overseas buyers,’ Mr Satterley, chief executive of the Perth-based Satterley Property Group, the country’s biggest privately owned developer, told The Australian Financial Review.”
“In Perth, where Satterley started out 36 years ago, the market is extremely tough, Mr Satterley said. ‘Activity is down 20 per cent. Everything has come off. Offices are 30 per cent vacant. Retail vacancy is at 28 per cent and there are 11,500 rental properties on the market.’”
From Bloomberg on Malaysia. “While Chinese home buyers have sent prices soaring from Vancouver to Sydney, in this corner of Southeast Asia it’s China’s developers that are swamping the market, pushing prices lower with a glut of hundreds of thousands of new homes. They’re betting that the city of Johor Bahru, bordering Singapore, will eventually become the next Shenzhen.”
“‘These Chinese players build by the thousands at one go, and they scare the hell out of everybody,’ said Siva Shanker, head of investments at Axis-REIT Managers Bhd. and a former president of the Malaysian Institute of Estate Agents. ‘God only knows who is going to buy all these units, and when it’s completed, the bigger question is, who is going to stay in them?’”
“‘I am very concerned because the market is joined at the hip, if Johor goes down, the rest of Malaysia would follow,’ said Shanker, who estimates that about half the units in Iskandar may remain empty. ‘If the developers stop building today, I think it would take 10 years for the condos to fill up the current supply. But they won’t stop.’”
The Press and Journal on the UK. “New research into Aberdeen’s housing market suggests the prospects for a long-term recovery are good, though sellers’ price expectations are currently creating a glut. Fiona Gormley, head of residential property for Savills in Aberdeen, said people looking to sell relatively quickly ‘may wish to consider setting significantly reduced asking prices.’ And she warned: ‘The lack of adjustment in pricing, coupled with a continually decreasing number of transactions, is leading to an ever-growing glut of properties that are currently available to buy in the Aberdeen area.’”
The National on Dubai. “The market for luxury property in Dubai continues to weaken as the number of high-level jobs has declined, with prices for Burj Khalifa apartments 15 per cent lower year-on-year and prices at Palm Jumeirah falling by 12 per cent, according to Cluttons. ‘While Dubai’s economy is still diversified, it’s the senior level jobs that have been lost,’ said Faisal Durrani, the head of research at Cluttons. ‘Also, the rate of [job] replacement and creation has slowed down.’”
From Nigeria Today. “Due to the economic downturn, Governor Akinwunmi Ambode of Lagos State has slashed price regime of houses under Lagos Home Ownership Mortgage Scheme, Lagos HOMS, to allow residents apply for the scheme specifically when rent-to-own scheme commence December 9. Vanguard gathered that the scheme which commenced under the previous administration was yet to be fully subscribed, even with the introduction of raffle and other strategies earlier.”
“With the reduction, two-bedroom flat, which was N7.2 million has been reduced to N3.5 million, while the one bedroom reduced to N2.3 million. Also, the room and parlour unit has also been reduced to N1.5 million.”