Investors Are Reeling As Excess Supply Bites
The Khaleej Times reports on Abu Dhahbi. “More housing units are expected to be vacant in Abu Dhabi in Q3. This will have ‘a more dramatic impact’ on residential rental demand, said property advisory company JLL Mena. ‘Job cuts by the oil and gas sector is leading to a decline in population growth,’ the report said. Approximately 4,000 units are expected to enter the market by the end of 2016, mainly within Reem Island, Rawdhat and Saraya, although based on past trends, a proportion of these could experience delays at handover. David Dudley, international director and head of the Abu Dhabi office at JLL Mena, added ‘Over recent years, prime residential prices went up at 25 per cent per annum which was unsustainable. As the market softened during 2015, prices have remained stable but transaction volumes have dropped significantly, which is starting to put pressure on sales prices.’”
The National on Saudi Arabia. “House prices in Saudi Arabia’s biggest cities continued to decline in the three months to the end of June, as falling oil revenue continued to put pressure on the kingdom’s economy. Property broker JLL’s data showed that villa prices in the Saudi capital Riyadh stood 5 per cent lower during the second quarter than they were during the same period a year ago, while apartment prices were 1 per cent lower. In Jeddah, the kingdom’s second city, year-on-year villa prices were down by about 4 per cent and apartment prices fell by 5 per cent.”
“The government’s National Transformation Plan, announced on April 25, includes a target to double the contribution of the property industry to the country’s GDP to 10 per cent, as part of a wider plan to reduce Saudi Arabia’s dependence on oil. Official targets include plans to make it cheaper for Saudi nationals to buy their own homes by building more houses and providing grants and more easily accessible mortgages. Knight Frank estimates that 30 per cent of Saudis own homes compared with a global average of 70 per cent.”
The Peninsula on Qatar. “Qatar’s real estate prices have witnessed a steady decline during the second quarter of 2016 compared to the previous quarter, after reaching to its peak for this year in March 2016. ‘The rentals for housing units in Thumama, Al Wukair and Matar Qadeem (Old Airport) areas have declined by nearly 10-20 percent, but the property owners continue to demand the same rentals they leased during boom time. Many of them prefer to keep their properties vacant rather than leasing at a lower price,’ said the promoter of a real estate leasing company, who did not wish to be named.”
From Nigeria Today. “Job losses have also become regular occurrences in the economy. Royal Dutch Shell Petroleum Development Company, Addax Petroleum Development Company and other key operators in the oil sector sacked thousands of their workers within the first quarter of this year. No thanks to the falling oil prices and the need to stay in business. SPDC had announced its plan to offload 10,000 members of staff and direct contractor positions in 2015 and 2016. There were also thousands of job losses in the banking, insurance and manufacturing sectors.”
“The Vacancy Factor Index shows a 72 per cent rise in the number of vacant properties based on the housing stock as at January, last year, within highbrow neighborhoods of Lekki, Victoria Island and Ikoyi. These areas are proximate to the central business district or downtown areas of the Lagos metropolis. Ruling out a quick recovery for the real estate sector because that market has a time lag to return to equilibrium, Rewane said: ‘We expect demand for housing locally to shrink further initially due to lower disposable income and a move from prime areas to more affordable locations.’”
The Standard Media on Kenya. “Investors in several neighbourhoods in Nairobi are reeling from a slump in home prices and rent as excess supply bites. Selling prices in Kilimani have dropped more than 5 per cent since last June to lead in the slump that has also been witnessed in Donholm, Eastleigh and Ridgeways, according to real estate consultancy HassConsult. A dip in prices is a reflection of slowing demand, further compounding concerns that developers who borrowed to fund for-sale projects could be coming under distress.”
“Implications of the supply-demand showdown have already been captured by the Central Bank of Kenya, which reported bad loans in the real estate sector had jumped by nearly half in the three months ending March.One of the reasons for the slowing uptake is that home sellers may have priced themselves out of the market. The average closing price for a residence in Nairobi has jumped seven-fold in 10 years, while rent has risen just three-and-half times, according to survey.”
The Namibian. “Namibian property owners have been hit by the Angolan economic crisis as most of their tenants from Namibia’s northern neighbour struggle to pay rent, and some have been forced to vacate. Angola’s economy, which heavily depends on oil revenue, has recently been hit by a crisis due to a plunge in global oil prices. While it was difficult to get a place to rent in recent years, many places in Windhoek’s central areas are empty as Angolans, who had a reputation for paying anything landlords demanded, now find it difficult to pay the rent which has steeply gone up over the years because of the artificial demand.”
“Many Angolans living in Namibia paid high rentals over the years as their country was awash with US dollar bills, which when converted to Namibia dollars, made high local rates appear petty. But the plunge in global oil prices made a huge impact on the Angolan economy as limited US dollars came into circulation. Places visited by The Namibian such as Dorado Park, Windhoek West, Windhoek North and Hochland Park, which were previously mostly rented out to Angolan students, have vacant rooms.”
“‘All these flats are empty. Angolans are either leaving, or moving to Katutura,’ said a security guard at a block of flats in Dorado Park, where at least four units which were all occupied by Angolan nationals before are empty now.”
“The latest statistics from the Angolan Industrial Association revealed that Angola had lost some 60 000 jobs in the past 12 months due to the falling international oil prices. According to Jose Severino, AIA chairman, the statistics which were released on 12 June showed that most of the job losses occured in the civil engineering and oil sectors, with state revenues reduced by half from June 2015 to May 2016.”
“Over the years, Namibians have blamed the Angolan US dollar boom for making landlords in Windhoek charge exorbitant rents. Real estate agent Esther Nicodemus said the sector has been feeling the pinch of the Angolan crisis lately. ‘Most of my clients were those people (Angolans). It has really been hard lately,’ she stated.”
‘Over recent years, prime residential prices went up at 25 per cent per annum’
‘continue to demand the same rentals they leased during boom time. Many of them prefer to keep their properties vacant rather than leasing at a lower price’
‘Job losses have also become regular occurrences in the economy… a 72 per cent rise in the number of vacant properties based on the housing stock as at January, last year, within highbrow neighborhoods’
(Lagos, the most expensive city in the world, 2014)
‘Angolans, who had a reputation for paying anything landlords demanded, now find it difficult to pay the rent which has steeply gone up over the years because of the artificial demand….Many Angolans living in Namibia paid high rentals over the years as their country was awash with US dollar bills’
Awash with US money. This is the same money you and I get up every day to go out and earn, and they were awash in it. Angolans.
So how could this be? Remember paying huge amounts to fill up your gas tank? For years? Remember the Chinese pouring a hundred years of concrete in three? Bernanke’s QE. The Chinese QE dwarfed it. This is where the “awash” with money we work and save for comes from.
OK it’s one thing to note the unfairness of printing up and pissing off the monetary exchange unit we’re stuck with at the point of a gun. But let’s not forget you can’t print wealth. And just look at the economic carnage that is Arabia and Africa.
Canada’s steep job losses another blow to struggling economy
The Globe and Mail - 1 day ago
Canada lost a surprising 31,200 jobs in July due to a steep decline in full-time work, …
This will keep prices up. Chain migration from the next 30 million Who will be entitled to enter once Hillay Kaine is elected.
https://www.reddit.com/r/The_Donald/comments/4wdqh0/tim_kaine_promises_bill_to_legalize_illegal/
The DNC also has an endless flood of refugees from neocon wars to resettle in “free states” like Idaho.
http://www.breitbart.com/big-government/2016/08/05/twin-falls-refugee-crisis-clinton-appointee/
With their lefty pm spending up a storm
Keynesian planing not working ???
Apparently much of the stimulus hasn’t started yet.
The federal government has estimated its stimulus measures — totaling about $12 billion this year — will bolster growth by 0.5 percentage points. Almost half of that will come in the form of new enhanced child benefits that were released to households starting last month. Much will depend on whether households save or spend the windfall. Most of the new money put aside for infrastructure and housing also has yet to be spent.
http://business.financialpost.com/news/economy/trudeaus-fiscal-plan-buys-bank-of-canadas-poloz-time-as-record-trade-gap-expected-friday
‘continue to demand the same rentals they leased during boom time. Many of them prefer to keep their properties vacant rather than leasing at a lower price’
Renters doubling up will solve that problem and shake down the stubborn high rents.
Palm Beach Gardens, FL Housing Market Reels As Prices Fall 8% YoY
http://www.zillow.com/palm-beach-gardens-fl/home-values/
Honolulu, Hawaii Housing Prices Plunge 12% YoY As International Housing Demand Evaporates
http://www.zillow.com/honolulu-hi-96816/home-values/
Yesterday, Republican presidential candidate Donald Trump gave investors both good advice and good analysis. Bloomberg has the report:
Donald Trump on Tuesday said interest rates set by the Federal Reserve are inflating the stock market and recommended 401(k)-holders to get out of equities, just like he did.
“I did invest and I got out, and it was actually very good timing,” the Republican presidential nominee said in a phone interview with Fox Business. “But I’ve never been a big investor in the stock market.”
“Interest rates are artificially low,” Trump said. “The only reason the stock market is where it is is because you get free money.”
Mr. Trump is right on the money. The reason stocks are near their all-time highs is that there is a lot of free money around. Money lent out at interest rates below the rate of inflation is free.
Of course, as we’ve been explaining to our 14-month-old grandson, it is not real money. It is fake money. Like a claim ticket on someone else’s parked car. If you get there before the car’s real owner, you can drive away. Otherwise, you’ll have to walk.
http://davidstockmanscontracorner.com/trump-is-right-about-stocks/?utm_source=ReviveOldPost&utm_medium=social&utm_campaign=ReviveOldPost
Is he right in the money for hiring Gubment Sux John Paulson and his band of hedge fund cronies as economic advisors? What happened to his tirade against the establishment?
I guess yesterdays jobs # had a huge seasonal adjustment. More bogus data, not a surprise at all.
elección
u got that right buddy It is just about impossible to have anyone but a bush or clinton.
Reporters Raucously Applaud Hillary, Softball Questions to Her at Their Own Conference
By Curtis Houck | August 5, 2016 | 3:11 PM EDT
Showing how much the liberal media is in the tank for Hillary Clinton in this election, reporters at the joint conference of National Association of Black Journalists and National Association of Hispanic Journalists on Friday afternoon wildly applauded Clinton’s far-left answers to a slew of softball questions about immigration, the electorate, and even whether she has any black friends.
The gathered journalists had already given Clinton a friendly reception during her speech before NBC’s Kristen Welker and Telemundo’s Lori Montenegro came out to moderate the question and answer session (not to be confused with the press conferences she’s avoided for the last 245 days) and Montenegro went immediately to a series of questions from the left on amnesty and immigration.
Journalists Keep Applauding Hillary Clinton’s Answers - YouTube
https://www.youtube.com/watch?v=lMhmrZHxlBQ - 156k - Cached - Similar pages
18 hours ago
‘As Hillary Clinton supporters fret about a WikiLeaks “October surprise,” dozens of defense and security experts from both parties are urging the Obama administration to take tough action if it concludes that Russia orchestrated a series of cyberattacks on the Democratic Party.’
‘But based on past U.S. handling of foreign-sponsored cyberassaults, it could take months or even years to mount such a response — action that could encompass anything from public shaming or economic sanctions to indictments or retaliatory hacking. Even the most optimistic timeline, according to interviews with former security and law enforcement officials, could delay a forceful U.S. reprisal until just weeks before the very presidential election that the hackers may be trying to influence.’
‘Calls for action have also come from several congressional Democrats and Republicans who serve on defense, law enforcement or intelligence committees, as well as a bipartisan group of 31 security and counterterrorism experts who urged Obama to “take prompt actions” that would “deter foreign actors from pursuing such tactics in the future.”
“This is not a partisan issue,” wrote the experts from the Aspen Institute Homeland Security Group, who included Bush Homeland Security Secretary Michael Chertoff and former CIA directors Michael Hayden and William Webster. They added: “Our president should be chosen by American citizens, not by foreign adversaries or interests.”
See, it isn’t that the DNC ran a “let’s slime the Jew so our southern Baptist peeps won’t vote for him” program that’s the problem. It’s that we found out about it that’s a “crime”. Oh no, please don’t let the voters find out what these people say and do when they don’t think anyone will know.
‘Our president should be chosen by American citizens’
Well yeah, so why have both of our two parties tried to fix who the candidate will be? Jeebus, this whole thing is FUBAR.
RIGGED
It makes you wonder what it will take for us to want an honest government. A nation of debt junkies does not want this.
Voting for candidates known to be dishonest and corrupt is a sad commentary on the state of public and private morality in America today.
Hi Guys,
Before we judge today’s politicians as so egregious, let’s recall that it’s always been this way. Thomas Jefferson straight up paid the TMZ of the time to slander John Adams.
I’m not condoning it, but just making the point that “we didn’t start the fire”.
Back in that era government mostly left people alone and let them engage in productive enterprise, or starve if they were lazy and shiftless. Today, not so much.
“Stress tests” designed to promote public confidence in the EU financial system are unlikely to reveal systemic risks.
http://wolfstreet.com/2016/08/05/italian-european-banking-crisis-bailouts/
Why is real journalist Ryan Grim Washington bureau chief for The Huffington Post giving a National Headline to Senate Minority Leader Harry Reid who has an unapologetic track record of lying during presidential campaigns?
Harry Reid To Intel Community: Give Donald Trump Fake Briefings
“This man is dangerous.”
07/27/2016 05:04 pm ET | Updated 2 days ago
Ryan Grim Washington bureau chief for The Huffington Post
PHILADELPHIA ― Senate Minority Leader Harry Reid (D-Nev.) is advising intelligence officials that if they end up giving GOP presidential nominee Donald Trump classified briefings during the campaign, they should just fake it and make sure not to divulge anything important.
“How would the CIA and the other intelligence agencies brief this guy? How could they do that? I would suggest to the intelligence agencies, if you’re forced to brief this guy, don’t tell him anything, just fake it, because this man is dangerous,” Reid said in an interview with The Huffington Post Wednesday afternoon. “Fake it, pretend you’re doing a briefing, but you can’t give the guy any information.”
“This guy, he’s part of a foreign power,” Reid continued. “We knew he liked Putin before this, but this is quite ridiculous.”
http://www.huffingtonpost.com/entry/harry-reid-trump-fake-briefings_us_57991916e4b01180b5317f6e - 141k -
Harry Reid’s appalling defense of his attack on Mitt Romney’s tax record
By Chris Cillizza March 31, 2015
One of the more outlandish moments of the 2012 campaign came when Senate Majority Leader Harry Reid went to the floor of the world’s greatest deliberative body and accused GOP nominee Mitt Romney of not paying any taxes at all for the past 10 years. Reid’s evidence? Someone had told him. (That “someone” is alleged to be Jon Huntsman, father of the former Utah governor. Huntsman denies involvement.)
Reid’s claim, which seemed outrageous on its face, was widely dismissed by fact-checkers. Wrote WaPo’s Fact Checker Glenn Kessler in a piece giving Reid four Pinocchios for the claim:
Without seeing Romney’s taxes, we cannot definitively prove Reid incorrect. But tax experts say his claim is highly improbable. Reid also has made no effort to explain why his unnamed source would be credible. So, in the absence of more information, it appears he has no basis to make his incendiary claim.
Moreover, Reid holds a position of great authority in the U.S. Congress. He should hold himself to a high standard of accuracy when making claims about political opponents.
And yet, the clip above shows Reid, in an interview with CNN’s Dana Bash, not only refusing to apologize for the claim but defending it — in a very weird way.
“Romney didn’t win, did he?” Reid said in response to Bash’s question of whether he regretted what he had said about Romney.
https://www.washingtonpost.com/news/the-fix/wp/2015/03/31/harry-reids-appalling-defense-of-his-attack-on-mitt-romneys-tax-record/ - - Cached - Similar pages
Mar 31, 2015 ..
As inept and useless & corrupt the republicans are, the dems are the definition of pure evil.
Market rigging, price fixing bona fide socialists.
Colleague of mine who is libertarian brought up a good question yesterday. Top two candidates get briefed by intelligence people every election (I guess libertarian party candidates don’t go through it). One of the candidates is going to be the loser. So if that candidate has a notorious big mouth and loses, he could use that classified info to personal advantage.
I,presume the winner will get a higher level classified briefing in November through January.
What is it with skyscraper fires in Dubai?
http://www.businessinsider.com/another-major-skyscraper-in-dubai-has-reportedly-caught-fire-2016-8
well it was a cool 112 yesterday
https://www.wunderground.com/cgi-bin/findweather/getForecast?query=dubai
Insurance money?
‘Investors in several neighbourhoods in Nairobi are reeling from a slump in home prices and rent as excess supply bites’
My introduction to economics in education began when I was shown Free to Choose by Milton Friedman in a class. The point I remember the most is that of a pencil. No central planner decides how much lead to produce, or wood or rubber for the eraser. No one coordinates who will put it together, where or how it will be sold. The markets do this primarily through the mechanism of price. Supply and demand isn’t an ideology. It’s an inherent condition of humanity. Cavemen exchanged meat for furs. Efficiency is as naturally desirable as walking upright.
So how do we get excess supply of anything? Somebody made a mistake. In the case of these oil regions, a high oil price sent the signal that more housing was needed. Expensive housing at that. Land prices rose on that expectation. Raw materials too. And so on.
My point is when you monkey with the price of anything, you distort the signals of the market. You will end up with too much or too little of a variety of things. In our modern economy of finance and fiat currency, this can lead to big problems. Loans are defaulted upon. Pensioners can’t retire. People lose jobs and housing is built where it isn’t needed and of the type not needed. Even outside of the idea of a financial mania, price distortion is a dangerous practice. It can take long periods of time to unravel. Lives will be affected as the ordering of occupations is sorted out.
So contemplate what distortions QE can bring. Why are we surprised when there are empty cities connected by unused roads and trains? And the mother of all distortions; when the price of money, in the form of interest rates, is manipulated. That artificially changes the price of everything. It’s been said here that we don’t know what anything is really worth. These countries above are testament to the madness of price distortions. Hundreds of thousands, maybe millions without jobs. Billions wasted on useless construction. Life savings wiped out. All because the price of things was unnatural.
True price discovery, when it eventually imposes itself, is going to be cataclysmic for our financial house of cards.
Falling prices to dramatically lower and more affordable levels accelerating the economy and creating jobs is hardly cataclysmic.
“It’s been said here that we don’t know what anything is really worth. ”
This is the obvious conclusion. Look no further than the Reckless decisions made by millions if you need any more evidence.
If I’ve said it once I’ve said it a thousand times… nobody understands the value of a dollar. Nobody.
Hi Ben,
I have a question.
The basics of supply and demand are obvious. Even the basic movements caused by increases or decreases for either are easy to process. But at the same time, are we to buy in that markets always behave rationally? (The Pet Rock always comes to mind.)
Personally, I’m apprehensive when it comes to the assumption of market efficiency. Even without a fed, you’ll always have speculators and people defaulting on loans.
I can understand why QE came around initially. Congress didn’t stimulate with Infrastructure and the fed felt compelled to do something. However, I think it’s gone on way too long and that ZIRP keeps punishing savers. I want it to change, and yesterday at that.
Given the record levels of fraud and unprecedented interference in markets by the government, you should be skeptical.
crushing.housing.losses.
Incalculable losses.
Vicious random attacks by Islamic extremists, er, mentally ill young men with no apparent signs of radicalization, per the police and MSM, are becoming part of the new normal in Europe. Aside from the security implications and massive expenditures of resources to establish a pervasive surveillance state and visible police presence, what are the long term political and economic ramifications, and how will that ultimately impact global markets and stability?
http://www.mirror.co.uk/news/world-news/belgium-police-stabbing-female-officer-8574786
“This sucker could go down” — George W. Bush
Has anyone ever read about a payment being made to the family of an attacker?
I’ve always wondered about this, but have never seen an article on it. For example, a poor Muslim goes on an attack. One month later, his mother gets $700K in her bank account.
I think we all suspect it happens. But I’ve never seen a “follow the money” investigation.
Most of the recent attackers have been benefits spongers, thanks to the open borders and ask-no-questions welfare policies of most EU governments.
Odd, the MSM must’ve overlooked this aspect of the story: ISIS telling its operatives to take advantage of the generous welfare programs in European states.
https://www.rt.com/op-edge/354875-islamic-welfare-state-paradox-welfare/
More candlelight vigils would fix this….
http://www.mirror.co.uk/news/world-news/belgium-police-stabbing-female-officer-8574786
Greetings from Passau, Germany. Apparently SFH’s are a luxury in this border town, and start at 1 million euros.
Doubtful.