We’re In For A Year Of Change
A report from the Toronto Star in Canada. “In one of Canada’s most expensive neighbourhoods, in hilly West Vancouver, sits a row of seemingly abandoned mansions. Not a single person can be found on the upper north side of Highview Place on a weekday midafternoon. The homes were developed by British Pacific Properties, starting in 2013. The empty houses are valued at between six and eight million dollars. The only sign of life is a robin flitting in six-foot-tall weeds. The Star knocked on the doors of the seven houses, but didn’t find anyone at home. Land titles for the homes list mailing addresses in Vancouver, West Vancouver and Richmond, B.C., while others list addresses in China.”
“A visit to two of the Vancouver mailing addresses on a Friday afternoon — a house on Vancouver’s west side and a Coal Harbour condo — failed to find the owners of the West Vancouver properties. A few doors south, a neighbour, who was not comfortable giving her name, said that in the three years she’s lived on her street, there’s never been anyone living in the row of empty Highview mansions. ‘It’s very unsightly. There are six-foot weeds in front of the property,’ she said. ‘It takes away from the vibrancy of the neighbourhood.’”
From This Is Money in the UK. “After spending four years living in a soulless apartment in a converted hotel in Abu Dhabi, Gabriel Ward was itching to return to the UK. When he stumbled across an advertisement for a block of £120,000 luxury apartments in an up-and-coming part of Manchester, it felt like the opportunity he’d been waiting for. He put down the required 80 per cent deposit, or £96,000, leaving just enough in his life savings to cover the remaining £24,000 when it was due on completion. Although it was a large sum, he only had to put down £3,000 to start with and he was reassured that he was making a smart investment.”
“But his one-bedroom flat hasn’t been built. Across the country, thousands of investors in so-called buyer-funded developments are in the same boat. Gabriel says the moment he discovered his £96,000 was lost is etched in his memory. He was sent an email by another investor who told him nearly all the money they had paid towards the homes had vanished. ‘I was recovering from six rounds of chemotherapy and had been in a very dark frame of mind because of my illness. Then all of a sudden I’m thinking: ‘So I’m going to live but now I’m completely broke. ‘I felt such shame. I’ve never had a lot of money to my name, so I’m devastated to have fallen for their appalling tactics.’”
“Administrators have pulled the plug on the Angelgate project as a hunt begins for the millions that have vanished.”
From TV 360 Nigeria. “A former representative of Nigeria to UNIDO-France, Mr Olusola Kayode, has called for the introduction of high tax regimes for vacant houses to check their proliferation in urban centres. He expressed concern about the existence of empty houses in many neighbourhoods in major towns in the country whilst many people remained homeless or lived in squalor.”
“‘There have been worrisome trends of empty houses in many neighbourhoods in Abuja in spite of the prevailing high housing deficit. When you look around there are so many houses locked up and here are people in satellite towns and slums looking for houses to live in. This, therefore, requires that policies stipulating punitive measures such as high tax regimes for vacant houses should be promulgated to check the proliferation of empty houses that tend to create artificial scarcity and high rental values.’”
From Live Mint on India. “From setting up offshore offices and organizing events to helping find tenants, luxury home builders are trying every trick in the book to boost sales, apart from offering discounts and flexi-payment schemes. Even as mid-income housing is taking off, luxury project launches fell 70% last year, said a report by property consultant Cushman & Wakefield. Tata Housing Development Co. Ltd is approaching NRIs to sell its Kolkata luxury homes costing around ₹ 3.5 crore. However, it has struggled to sell two homes priced at ₹ 1.7 crore at Thane outside Mumbai.”
“‘Everything is tough to sell today. The challenge is to get people to come for a site visit, which has dropped significantly. Buyers know they will get a 10-15% discount in this market and they may negotiate for more,’ said a person familiar with the company’s plans.”
From Property Guru on Borneo. “Real estate developers in Sabah is urging the state government to help them tackle the oversupply of completed houses, reported the Borneo Post. ‘When the market is bullish, these overhang properties will gradually be absorbed. But the number of overhang units is accumulating in the current market slowdown,’ said Sabah Housing and Real Estate Developers Association (SHAREDA) President Chew Sang Hai.”
“In fact, the proportion of unsold units – defined as those with Occupancy Certificates (OCs) that have been listed for sale for over nine months – has reached 25 percent, mainly consisting of bumiputera units.”
From ABC News on China. “Fancy villas, high-rise apartment blocks, lakes, parks and sprawling road networks: Ghost cities in China have it all. Just one crucial element is missing — the people. Built for a population that never came, about 50 of these surreal sites lay desolate across the country. But still the construction continues. These new cities are usually built in rural areas on the outskirts of existing cities. Dinny McMahon, author of China’s Great Wall of Debt, explained the driving force behind the new construction projects, seemingly built for no-one.”
“‘The phenomenon very much has been driven by the debt splurge that really kicked into gear after the global financial crisis,’ Mr McMahon said. ‘Local governments around the country tried to juice and stimulate their economies by building more infrastructure and stimulating the property market.’”
From Mansion Global on Australia. “In Sydney, the median value of houses in North Bondi fell from A$3.03 million (US$2.24 million) to A$2.62 million (US$1.94 million) between the August 2017 market peak and May this year, a drop of 13.4%. The median value of houses in the coastal suburbs of North Narrabeen, Dee Why and Elanora Heights fell by 11.8%, 11.7% and 11.4% respectively.”
“In Melbourne, the median value of houses in exclusive Canterbury fell by 19.3% from $3.18 million (US$2.35 million) in November 2017 (Melbourne’s market peaked slightly later than Sydney’s) to $2.56 million (US$1.89 million) in May this year. Armadale and Malvern median house values fell by 19.2% and 14.9%. Expensive homes in Sydney and Melbourne are undergoing a ‘downward trend in pricing,’ said Charles Tarbey, chairman of Century 21 Australia. ‘I’ve found that downward trend is continuing but in a modest fashion. It’s not a dramatic change but anybody buying in that range of A$2 million and up has the potential to negotiate. Prior to this period, that wasn’t the case.’”
“In Melbourne, auction clearance rates for the Queen’s Birthday long weekend (June 9-11) were 56% across the Century 21 network, compared to 76% on the same weekend last year. ‘That’s a 20-point difference in the space of 12 months,’ Mr. Tarbey said. ‘So it’s a big change. You now have an opportunity to make an offer rather than be forced to push yourself because you might miss out.’”
“Buyers looking at luxury apartments might also gain some attractive deals, according to Mr. Tarbey. Some apartments bought off plan when the market was booming are reaching completion and banks are refusing to accept the price tags paid for them when lending to the buyer. Some buyers are declining to settle and foregoing their deposits, forcing developers to resell or hold pre-sold apartments for better times. This phenomenon is particularly apparent in Brisbane, he says.”
“But the current situation is a stark contrast to a prolonged real estate boom that ended last year. ‘We’re in for a year of change,’ Mr. Tarbey said. ‘The top end is feeling it. If a bit more stock comes on the market, and the equity markets change [for the worse], people will start to rethink their easy purchasing activities undertaken over the last few years.’”
