Category Archives: Real Estate

Real Estate, Realty Transactions reported and updated.

China Home Price Gains Spread as Large Cities Lead Recovery

China Home Price Gains Spread as Large Cities Lead RecoveryJul 18, 2015, 9:51:05 AM
Declines in China’s new-home prices were restricted to fewer than half of the cities monitored for the first time in 15 months as sales extended a rebound after authorities cut interest rates and eased property curbs.
Prices declined in 33 of the 70 cities in June from a month earlier, compared with 41 in May, according to data released by the National Bureau of Statistics on Saturday. Twenty-seven recorded increases, seven more than in the previous month, as first-tier centers including Shenzhen and Shanghai led a rebound. Prices were unchanged in 10.
The recovery has been driven by four interest-rate cuts since November and increased incomes as Chinese equities surged about 150 percent in the year to mid-June. While about $3 trillion of that wealth evaporated in less than a month as stocks subsequently plunged 20 percent, demand from owner-occupiers is forecast to sustain sales and prices in the longer term.
The stock market rout won’t shake the fundamentals of the property market, Alan Jin, a Hong Kong-based analyst at Mizuho Securities Co., said ahead of the data. “Housing prices and volume are firmly on a recovery trajectory,” Jin said.
Bigger Increases

New-home prices in the southern business hub of Shenzhen, which is leading the residential rebound, rose 7.1 percent from May and 15.7 percent from a year earlier. Prices gained 1.3 percent in Beijing and 1.5 percent in Guangzhou, both the most in almost two years, and 2 percent in Shanghai.
The increases overshot May’s numbers in 20 cites, the statistics authority said in a statement released with the data. Less affluent cities including Shenyang and Guiyang reversed declines.
The strength of the real-estate recovery will depend largely on the stability of the stock market in the second half, Du Jinsong, a Hong Kong-based analyst at Credit Suisse Group AG, said before the data release.
China eased mortgage policies and down-payment requirements for some homebuyers at the end of March, adding to easing measures since September to aid an industry that has been weighing on economic growth. While home sales jumped 13 percent in the first half of 2015, compared with a 9 percent decrease a year earlier, investment in property development slowed to 4.6 percent from 14.1 percent.
“The trend of polarization is still evident among different cities,” the statistics bureau said in Saturday’s statement, adding that demand was robust in first-tier cities while smaller centers struggled.
Existing-home prices rose in 42 cities last month, compared with 37 in May, Saturday’s data showed. On a year-on-year basis, new-home prices still fell in 68 cities in June, compared with 69 in May.
Average new-home prices in 100 cities tracked by SouFun Holdings Ltd., which owns China’s biggest property website, rose 0.56 percent in June from the previous month.

Bloomberg

INDIA NIFTY – Has 5400/5420 in view. This guy is not falling!

The last few sessions in the markets have been breath taking, Just a few days ago on FRIDAY, HOPIUM rose and the markets became once again happy go lucky!. Despite the geo political arena getting hotter, American Ships in the straits of Hormuz, plus IRAN completing their war cry exercise and demonstrating its war capability, and selectively saying, “Don’t mess with me, I have the fire power”, its possible, the USA now discounts the IRANIANS for all their empty threats.

Last year IRAN warned “No ships shall pass my seas” and a US SHIP turned back and headed further away, with that, IRAN said “IF YOU COME THIS WAY AGAIN!, I SHALL TAKE CARE OF U!.  A week later, when the SHIP returned, IRAN did nothing.

A whole lot of empty promises and lack of management displinary skills of IRANs arm forces, indeed raises many doubts, but then again, they have shown more than once, their inefficiencies, an example how they were not able to handle the naughty behavior of STUXNET or when their mililary depots blew up, due to “improperly of storage weapons” techniques.

A whole lot of questions are always raised, when it comes to IRAN, the sabre rattling has started to become boring, this could be the underestimation both parties could make, leading up to the escalation in world war three.

The USA may just push it further and strangle the IRANIAN even more, before the IRANIANS make the first move, due to fear attack.

indeed escalate world war 3, and the IRANIANS will indeed give them a tough fight, which will solve USA’s economic problems and the Industrial War Complex will once again have their way.

 

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Realty Investments – What’s in Store for 2012?

Real Estate Investments Report 2012
For those that are still looking for a bottom in real estate prices, here are a few things to consider.

1) In recent years, for most countries Real Estate construction has been a major factor of their GDP, this in turn has seen excesses build up everywhere, in Asia this is the most evident, except India/China, where the first home buyers market demand still remains, elsewhere there are huge tracks of buildings just sitting idle.

2) High land values of the past years have seen projects that come onto tap, have to be prized higher than the past as such, the sellers are quoting rates which do not justify to the buyers and the buyers are looking for deals, which have yet to materialize, hence a market where very little trading happens become evident.

What happens next?

This quite market scenario is bearish, investors who continue to remain long within their portfolio will either have to make a choice, to continue holding up rates, similar to a trader who chases a buy with a lowered out of market bid, or a seller who wants to sell, but the prices he wants are always above the market.

In general a quite market, with a bearish bias.

As the dollar comes back, most export oriented economies will take the route of devaluation and rightly so, fiscal indiscipline will be paid by lowering its cost, it has always been this way, in dollar terms most of assets priced today will become relatively cheaper and a situation such as that after the 1995 real estate peak, Asia could witness lower prices in real estate and a stronger dollar, a double whammy for foreign investors.

Prime Land values will hold up.

Land values within city centers will continue to be an institutional play and as a hedge against the hyper inflationary scenario. Here again, it all depends on the level of ongoing creative destruction, since the political parties may continue with their populace preferred policies and scarcity and availability of cheap prime land is a thing of the past, we could witness a margin squeeze as developers chose to build affordable housing instead of luxury.

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The “Bear” is back.

23/9/2011 / Approximately two years ago in March 2009, this website was shut down, the markets had rallied, there was no point shorting in the face of unlimited cash.

Today, the tide seems to have changed, The FEDS, IMF, ECB and the various central banks have unable to bring about growth and consumer spending, by inflating the economy, they might as well try mail some cash to everyone in the form of coupons, it simply may not work, Japan deflationary era provided evidence to this scenario.

By not acknowledging the error and simply pushing it under the carpet, doesn’t mean it don’t exist. The write downs have not occurred fast enough and inflating with additional money supply, just creates another boom bust cycle, with the underlying far weaker than before.

In this week, we noticed the global fallout in commodities, stock markets and practically every asset class, Deflation is underway and its gaining momentum. If this reads right, the downside has a long way to go and this may just be the start of that trend.

The Bear is back.

 

FEAR GRIPS THE WORLD

These are the end days, the world is almost over and this may spell the end of the financial markets, mainly the stock markets for the world, investors who have lost money will not return ever! It’s a hopeless scenario! I am getting out!.

Scanning through various web forums, media channels and even the classifieds sections for real estate in traditional media are yelling, help me out here!, take my position!, I am losing money and I want you to lose some too.! But Caveat emptor! (Buyer beware)

Hello there! Hold on just yet. Haven’t we seen this move before!

In our book ”Technopreneurship – The Successful Entrepreneur in the New Economy”, Pearson Ed ISBN 0-13-046545-3, we had labeled, the first three chapters, The Greed, The (False) Hope and The Fear. The fourth chapter is called, The Opportunity, the start of a new dawn.

Fearful times just as this are actually the greatest opportunity for investors and it’s often referred to the changing of the guards. This collapse that we are currently witnessing had to happen and it has to be vengeful enough to liquidate the one’s on the Edge and trust me there are many; prices have to fall back to equilibrium to make it attractive enough for the new guards to venture in. These cycles are the greatest innovation of a market driven economy.

The book entails the three chapters and correctly labeled the cycles. The greed phrase was important and it just didn’t happen in Asia but the world over. To prove a point, here are the stats of the world’s tallest buildings and how they coincided with recessions there after.

Tallest Buildings of the world

Tallest Buildings of the world

This chart depicts of the tallest buildings in the world and has often coincided with major economic collapses and recessions. Its interesting to note;

1931 – Empire state building (The Great Depression)
1972-1973 World trade centre 1974 Sears Tower. (The 70’s Oil crisis)
1998-1999, Malaysia’s Twins/Shanghai’s JM Tower. (Asian Financial Crisis)
2003-2004 – HK – Two International Financial Centre / Taipei 101 (SARS)
2007-2008-2009– Under Construction. Shanghai WFC, Burj Dubai and Freedom Tower NY City.

All appeared in a timely fashion, where planning began just before the start of the crisis and completion occurring when the crisis is midway or near completion. For example the tallest building in Hong Kong, coincided with Hong Kong suffering the most during the ASIAN SARS crisis. Another interesting note, many mega projects planned in tandem with the greatest buildings of the world, hardly reach completion and if they ever do, they remain empty shells for years to come.

Mega Projects planned and under constructions.

Singapore has two major casinos under construction at the moment, there are reports of Las Vegas Sands in trouble at the moment and they being one of the bidders for the casino in Singapore.Dubai has the world palm islands under development and Burg Dubai, the Tallest Building in the world.

The correlation between these two markets is as follows. Both have no natural resources and are very much service oriented economies. Speculation was rife in both of these markets with highly leveraged transactions, Buyers requirements were simply, as low as 1-2% option money for a transaction and if delivery is taken, 10% and no money down till completion. Banks were lax in lending despite the values of underlying asset had already appreciated 300-500% from the last crisis (Singapore 2003 SARS / Dubai 2003 Iraq War). Both were eyeing to become the New Mecca of the world, with Dubai being at the epic-center of the oil kingdom and Singapore with its rhetoric of first world, cleanest, safest place in the world to do business, aptly called the Switzerland of Asia.

Just as the axe fell on rating agencies for not being prudent in the stock market, Banks are probably looking towards their respective property valuators in this scenario. There is still (false) hope prevalent in these markets and all that is required is, the local economy/stock market remains sideways for another two quarters and we shall see various sales liquidations coming to market.

While the stock market may see snap-back rallies from depressed levels, again its not a long term play as what most media channels predict, the excesses of the economy have to cleaned up for good, before chapter 4 unfolds.

Disclosure

  1. Our real estate fund has no position in any of these countries except in KLCC, Malaysia, we are long prime downtown properties with 100% tenancy.
  2. Our emerging markets equities fund, is long short term call options in India.