Record price paid in Hong Kong
A luxury five bedroom flat in Hong Kong located on 39 Conduit Road, a luxurious residential building, was sold for $57m (HK$439 million) -with each sq foot costing $9,200-setting the new world record for the most expensive apartment.
Property prices in UK up for six months in a row….but slowing
Residential property prices in the UK rose at a slightly slower pace of 0.4% in October but annual house price inflation has turned positive for first time since March 2008, according to the monthly figures from Nationwide.
Overall consumer expectations are consistent with house price inflation but poor GDP figures have mixed implications for the real estate market, the country’s largest mortgage lender says.
It was the sixth consecutive month in a row that property prices have increased but it is clear that the strong upward momentum in property values seen over the summer is showing some signs of moderating.
Mortgage rate restrictions in Hong Kong
Property transactions in Hong Kong have fallen in the last week since tighter mortgage restrictions were imposed to try to ward off a real estate bubble.
According to real estate agents the decision by the Hong Kong Monetary Authority to cut the mortgage limit on property worth HK$21 million or more to 60% has had an immediate impact.
Hong Kong Chief Executive Donald Tsang confirmed that the government approves of the move and is ready to do its bit.
‘We do not want to see a huge property bubble developing in Hong Kong,’ he told a meeting of businessmen.
He said the government had tools available to stabilise the market but did not give details except to say any action would be motivated by a need for stability, transparency and smooth market operations.
Prices of mass market residential property have surged more than 20% this year, despite the economic downturn, while luxury property prices have soared more than 40% thanks to excess liquidity globally and an influx of cash from newly rich mainland Chinese.
Tsang, however, said that the current surge in prices exhibited far fewer signs of speculative behaviour than a previous property market bubble in 1997 which burst amid the Asian financial crisis.
HKMA Chief Executive Norman Chan said at the time that it was difficult to tell if there was a property bubble.
But the measures might not work since many mainland Chinese buyers of luxury property in the city buy with cash.
The mortgage measures might not calm the luxury sector, analysts warned.
Financial Secretary John Tsang met last week with the city’s property developers to express the government’s concern about sharply rising property prices.
Developers, however, said the government should release land at more reasonable prices, arguing that plots proposed for auction by the government in the past couple of years have been priced too high.
Before a site can be put to auction, a developer has to agree to pay 80% of the site’s recommended price which is set by the government.
Housing bust hits Manhattan
NEW YORK (CNNMoney.com) — The national housing slump is finally crashing at the shores of Manhattan island, which had its worst quarter in years, according to several industry reports released on Thursday.
The big hit was seen in sales volume, which plummeted 48% in the first quarter of 2009 compared to the previous quarter and year, according to data compiled by Jonathan Miller, of appraiser Miller Samuel, for Prudential Douglas Elliman.
The primary reason given for the gap was the different expectations of house hunters and sellers. “That’s really showing the huge ocean that separates them,” she said. “Many sellers left their prices too high for too long. We had a lot of long negotiations that ultimately led nowhere.”
Property price free-fall in UK likely over soon
The worst of the price falls in the residential property market could be over soon as there are signs that the market is reaching the end of its free fall, it is claimed.
Further price falls are expected but changing market conditions mean that the rate of fall may not be as great as it has been, according Yolande Barnes, head of residential research at the property adviser Savills.
‘We could now be about to enter the latter stages of house price falls and be on the brink of the first stage in the recovery process. This is characterised by low supply as well as low demand levels which causes prices to bottom out,’ she said.
‘We have already seen a pronounced recovery in affordability, thanks to both price falls and reduced interest rates, which sets the platform for a recovery when macro-economic conditions are right,’ she added.
New Manhattan housing data provides window into bleak fourth quarter
The real estate industry is waiting with baited breath for the next round of quarterly market reports, when Manhattan will see the real effects of the mortgage crisis on home sales. But a new analysis by real estate appraiser Mitchell, Maxwell & Jackson offers a glimpse at the bleak picture that the reports will likely show.
Manhattan data compiled by the appraisal firm and released yesterday showed that the volume of signed contracts in September and October plummeted roughly 75 percent from the same period last year.
UK property rents fall as market flooded by unsold homes
Residential property rents in the UK have dropped as failed sellers flood the lettings market with unsellable properties, according to the latest figures.
There are now more properties to rent than ever before and while this may be good news for tenants it has resulted in a drop in rents, says the Royal Institution of Chartered Surveyors in its Q3 lettings survey.
Supply is now at historic levels as frustrated vendors are placing their property on the market to let as they have been unable to agree sales due to a lack of demand in the housing market.
Discounts luring bargain hunters
Deep price discounting and tumbling interest rates are luring some bargain hunters back to the property market. Among others, Grand Promenade and Kingswood Villas are cited as housing estates in which there is great interest.
Over the weekend, the number of potential buyers viewing flats rose by up to 50 per cent from a week earlier, agents said. The surge was largely fuelled by lower asking prices and a reduction in mortgage rates from Monday.
But the bargain hunters’ enthusiasm is not shared by many analysts, who do not agree with property agents that now is the time to buy.
Researchers at investment banks Credit Suisse and Morgan Stanley said prices might continue to tumble in the next 12 months, in view of rising unemployment and the weakening local economy.
Transaction prices at major housing estates had plummeted by between 20 and 35 percent, agents said, as credit-starved speculators were forced to dump their units.
Professional investors cash in on the credit crunch
The amateur buy-to-let investor has had his day. Deterred by falling property prices and hampered by a lack of mortgage credit as banks tighten their lending criteria, small players who want to buy one or two homes to supplement their income or bolster their pension are fast disappearing.
At the same time, however, professional investors with large property portfolios are cleaning up; many are sitting on substantial sums of equity built up throughout the housing boom. Unlike new investors, they can afford to meet lenders’ more stringent requirements for larger deposits. Figures from Hometrack, the property data company, indicate that 82 percent of rented property is in the hands of professional or semi-professional landlords who own at least ten homes. For these people, a weak housing market represents an opportunity to find a bargain property and take advantage of rents that have risen by 12 percent over the past six months, according to Paragon Mortgages. Investors know that fewer buyers in the market equates to a greater demand for rental homes.
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Abu Dhabi beating the Credit Crunch
At a time when many nations in the world are fearful of the credit crunch, it appears that Abu Dhabi is resisting the trend. One major local property developer is reporting Q3 profits three times more than a year ago and expectations are that the trend will continue next year, according to a recent Reuters survey.
Abu Dhabi is part of United Arab Emirates (UAE), a federation of seven Middle Eastern states on the Persian Gulf. Abu Dhabi city is the capital of the UAE. Although it is one of the world’s largest producers of oil, Abu Dhabi has recently been trying to diversify its economy into other sectors such as the property and tourism markets.
There are other reports which support the Reuters findings. In recent weeks, the government has pumped US$33 billion into the banking system. Fitch Ratings recently expressed its approval of the government’s moves to guarantee liquidity in the banking system and it believes it will be unnecessary to downgrade the emirate’s Long-term Issuer Default Rating.
“The risks of a UAE bank suffering a capital markets-driven liquidity crisis are limited as none of the banks are reliant on these markets. Their funding bases are predominantly based on retail and corporate deposits, with the balance as inter-bank borrowings and some limited debt capital market issuance,” says the Director of Fitch’s Banks team, Robert Thursfield.
According to James Gonzalez, Market Analyst at Obelisk, guaranteeing liquidity is an important issue for Abu Dhabi. “In contrast to Dubai, where the earliest off-plan investment opportunities saw completion in 2002, the first completed units in Abu Dhabi will only be delivered in late 2009. Abu Dhabi remains a relatively new option for foreign buyers and lacks the market saturation of Dubai. It still remains an emerging market.”