Real estate developers anticipate a contraction in home sales and a brake on rising prices over the next three months, but are confident in the capacity of the residential market, according to the Portuguese Investment Property Survey, conducted by Confidencial Imobiliário and the Portuguese Association of Real Estate Promoters and Investors (APPII).

“Despite anticipating a contraction in housing sales and a brake on price rises for the next three months, real estate developers remain quite confident in the capacity of the residential market”.

According to the latest survey, “the number of developers with new projects in the pipeline increased to 74%, a share similar to that of respondents who say they are actively looking for land for new developments. In any case, this is a record level in terms of investment intentions”.

However, in the context of loss of purchasing power on the part of Portuguese families, respondents reveal the “lack of demand as the last obstacle to their activity”.

“With a pressure index of just 26% (on a scale of 0 to 100%), since mid-2021 this is no longer a concern for these agents”.

Even so, there is the prospect that the market will slow down in the short term, “with expectations regarding the evolution of sales in the 1st quarter of 2023 to be positioned at -57 points”.

“It is the third consecutive quarter in which this indicator is in negative territory, but it is the first time, since the pandemic, that simultaneously generates expectations of a brake on price growth, with an indicator at -2 points. That is, the percentage of promoters that point to a drop in prices exceeds by 2% those that point to a rise”.

Source: theportugalnews

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UK property markets will hopefully flatten out in 2023, according to a property expert as the country left behind an unsteady year in which prices went up and down.

In the last year, rising mortgage rates and costs of living added to the enduring effects of the coronavirus pandemic, not only on house prices but on the entire property market.

Though the housing shortage and demand are still high, this year is expected to at least not be as bad as 2022.

Speaking to Anadolu, Shadot Miah, lettings director at Hunters Estate Agents in London, said the property market was “up and down” last year for them

“Last year, we experienced a very quiet first quarter. The second quarter, it was picking up and the last quarter was absolutely busy.”

He said that the main problem was stock issues, especially towards end of the year, as people were coming back to Britain after easing the pandemic measures.

“Everyone started to come back in London,” said Miah, who has 20 years of experience as a real estate agent.

Another factor in the shortage was the longer-term contracts made during the pandemic, as uncertainty drove agents to make contracts of two or three years between tenants and landlords.

In October 2022, private rents in the UK hit record highs, with rises of up to 20% in some areas, while the total number of available properties fell by 9%.

‘Rising expenses hit hard’

“It was an all-season market … I’ve been through Brexit stamp duty, I’ve seen that market. I’ve seen the market with the credit crunch in 2007. I’ve experienced that all in one year last year,” added Miah.

Describing 2022 as an “unprecedented year,” however, Miah said he expected the market to flatten out and see “a bit more consistency” in 2023.

“I think rentals will be coming back to normality. I think we’re possibly coming back on the market,” he said, adding that the seller’s market would remain “tough.”

Comparing the effects of Brexit, the pandemic, and the ongoing economic turbulence on property market, Miah said all these went hand-in-hand but that rising expenses was a serious issue as they “hit people hard.”

Touching on rising in rent caused by a surge in inflation and mortgage rates, he said it may drive people to move to different areas if living costs continue to climb.

Miah said that “a lot of tenants who can’t afford to live in (central) London, who don’t need to live in London,” would likely leave the city center in favor of the suburbs.

According to the Office for National Statistics (ONS), more than 1.4 million households in the UK are facing the prospect of interest rate hikes as they renew their fixed-rate mortgages in 2023.

Source: aa

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The initial implementation of the ABSD in 2013 had minimal impact on the popularity of Singapore residential properties among foreign buyers, who purchased 25.5% of all condominiums sold in 2013, up from 23.9% in 2012. After the ABSD rate was increased in mid-2018, the percentage of foreign buyers dipped slightly from 24.7% in 2017 to 23.1% in 2018. However, foreign buyers seemed to shrug off the second round of ABSD rate increase and accounted for 22.4% of all condominium sales last year, up from 19.7% in 2021 when the increase was implemented

Singapore recorded its first case of COVID-19 in early 2020, leading the government to impose the first circuit breaker in April of the same year. Restrictions and travel curbs were gradually lifted starting from March last year.

The COVID-19 travel curbs and restrictions had a greater impact on demand from foreign buyers than the introduction and revisions of the ABSD rate. The percentage of foreign buyers of condominiums in Singapore fell below 20% for the first time since 2002 in 2020 and 2021.

However, as Singapore and other countries gradually ease their COVID-19 restrictions and travel curbs, foreign buyers seem to be returning. Despite the significant increase in the ABSD rate for foreign buyers since December 2021, foreign buyers accounted for 22.4% of total sales transactions for condominiums in Singapore last year. This renewed interest could be due to a flight to safety by high net-worth individuals.

Deep-dive into nationality of foreign buyers

The nationalities of top five foreign buyers of Singapore residential properties have seen few changes in the last 20 years. Malaysia, Indonesia, China and India are consistently in the top five list.

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However, there have been some changes in the ranking of the top five foreign buyers. China and India have moved up the ranks while Malaysia and Indonesia have slipped down. The United Kingdom was previously on the list but has been replaced by USA since 2012.

American buyers have benefited from the Free Trade Agreements (FTAs) signed between Singapore and USA, which accord Americans the same stamp duty treatment as Singaporeans. Citizens from Iceland, Liechtenstein, Norway and Switzerland also benefit from similar FTAs.

No change in nationalities of top foreign buyers for the last five years

From 2018 to 2022, the top five foreign buyers collectively accounted for 13% to 17% of total sales for condominiums in Singapore. This group of foreign buyers also represented 66% to 76% of all condominiums sold to foreigners.

Among the foreign buyers, the Chinese bought the most number of condominiums in Singapore for the period between 2018 to 2021. This is followed by buyers from Malaysia, India, Indonesia and USA. Last year, the top three spots went to same countries but USA moved up a spot to fourth place, replacing Indonesia who slipped down to fifth position.

Return of the Chinese buyers?

Chinese buyers have consistently been among the top five foreign buyers of condominiums in Singapore. The number of units purchased by them have grown from 157 units (5.6% of total number of units bought by foreigners) in 2002 to 1,344 units (30.7%) last year. China has also firmly supplanted Malaysia as the top foreign buyer since 2016.

The five-year average (2013 to 2017) for the number of condominiums units purchased by the Chinese was 1,298 units, down from the previous five-year average of 1,548 units. The introduction of ABSD coupled with a weaker global economy and higher residential property prices could have dampened demand. The five-year average price (2013 to 2017) for condominiums in Singapore was $1,354 psf; $270 psf higher than the earlier five-year average of $1,084 psf.

COVID-19 seemed to have limited impact on Chinese buyers who bought 1,047 and 1,738 condominium units in 2020 and 2021 respectively. The Chinese bought 1,344 units last year representing 30.7% of all condominiums sold to foreigners, which was an improvement over 30% last year. The decline in numbers of units purchased by the Chinese is likely due to the limited number of residential properties that were available for sale last year rather than the increase in ABSD rates from 2021.

Demand from the Chinese is widely expected to strengthen after the relaxation of COVID-19 restrictions and travel curbs by the Chinese government late last year as well as projected stronger economic growth for China this year.

According to the IMF’s World Economic Outlook update in January 2023, real GDP for China grew 3% last year and is expected to rebound to an estimated growth of 5.2% this year. However, IMF cautioned that China’s economic recovery could be weaken by another COVID-19 outbreak fuelled by its persistently low vaccination rate.

The return of demand from the Chinese is expected to have a positive impact on Singapore’s residential property market because they are the top foreign buyer. Since 2014, the Chinese accounts for about 30% of all condominium sales to foreign buyers.

A number of Chinese buyers have been observed to bulk buy high-end condominiums in Singapore. It was widely reported that a Chinese buyer bought 20 units in CanningHill Piers in mid-2022 for over $85 million. This trend is expected to continue into this year, which will give a boost to demand.

Conclusion

Demand for condominiums in Singapore by foreign buyers has remained robust over the years, accounting for at least 20% of total sales transactions since 2002. However, the percentage dipped below 20% in 2020 and 2021 due to the COVID-19 pandemic, weaker global economic conditions, and geopolitical tensions.

Last year, foreign buyers returned to the market with 22.4% of all condominium sales made by foreigners, despite the increased Additional Buyer’s Stamp Duty (ABSD) of 30% for foreign buyers from December 2021. The easing of pandemic restrictions and renewed interest in Singapore’s residential property market from foreigners may have contributed to the rise in demand.

The Chinese are expected to lead foreign demand this year, as the relaxation of COVID-19 restrictions by the Chinese government and Singapore’s reputation as a finance and education hub are expected to attract more ultra-rich Chinese to the city-state. The Chinese have consistently been the top foreign buyers of condominiums in Singapore, accounting for approximately 30% of all sales to foreign buyers in the last two years.

According to URA, 4,528 condominium units were launched for sale last year, and market observers estimate that 10,000 to 15,000 units from 40 projects will be launched this year, which should bring relief to the tight supply market and slow down the pace of price growth.

IMF’s latest World Economic Outlook projects global GDP growth to ease from 3.4% last year to 2.9% this year before rebounding to 3.1% in 2024. Global inflation is expected to fall from 8.8% last year to 6.6% this year and 4.3% in 2024, higher than pre-pandemic levels.

The renewed interest from foreign buyers, especially the Chinese, in Singapore’s residential properties will boost demand and prices, but the pace of price growth will be moderated by the surge in new launches, weak global economic outlook, inflation-driven high interest rates, geopolitical tensions, and ongoing pandemic.

source: edgeprop

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Bo Zhang, of Atlas, said inquiry numbers from Chinese buyers had almost quadrupled this year, with three or four flights daily from China arriving in Sydney since February 1.

Some Sydney universities are even looking to charter their own flights from China, other sources advise, to get students here quicker.

Zhang added that China’s wealthy families, some who are educating their children in Australia or are establishing businesses here, have been wanting to come here this year ever since borders reopened post-Covid.

But the unexpected announcement by the Chinese Government at the end of January to ban citizens studying online at foreign universities had created a new sense of urgency.

“The purchasers of a house in Edinburgh Rd, Castlecrag were ahead of the pack,” he said.

“They paid $13m for a family home for their two children to attend private schools…generally families are looking from $5m to $30m and they want a trophy home,” he said.

Buyers who are not permanent Australian residents must have approval from the Foreign Investment Review Board to purchase real estate in the country.

Monika Tu, of Black Diamondz Concierge, said the rental market is so tight that Chinese families are looking to buy and are prepared to spend between $5m and $8m on houses in the upper north shore.

They like multiple rooms for sharing and lock up and leave property. She also just sold a city apartment for more than $4m in seven days to Chinese buyers who liked the central location and low maintenance.

Stefon Bertram, of Pello, has also noticed a rise in the number of Chinese families looking at prestige homes. They have been inspecting the $9m house for sale in Raglan St, Mosman and looking at the rare waterfront luxury home at Parriwi Rd, Mosman.

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The lack of affordable housing and the emptying of many downtowns in the US are what doctors might call co-morbidities: different problems that occur simultaneously and can exacerbate each other, making the entire system worse. But some people are able to look at the US housing crisis and the state of the nation’s downtowns and feel a shred of hope. After all, here are two problems that can each become a solution to the other.

The 2022 State of the Nation’s Housing report from Harvard University revealed that the US housing supply is at a deficit of 3.8m homes. Meanwhile, in a city like San Francisco, where the availability of affordable housing has reached an acute crisis, the downtown business district has all but hollowed out. Now that remote work has become the norm, with knowledge workers logging in from everywhere and anywhere, only 73% of the city’s office space is in use, according to one study by the real estate firm CBRE.

To many, the fix is obvious: turn the unused office space into apartments. This rejiggering – applicable in numerous metropolises across the nation – would create housing for those in need, while giving downtowns a much-needed jolt of new life.

There have long been commercial-to-residential projects, such as small-scale factories converted into lofts, but the idea of converting towering office buildings into apartment complexes is a different, and increasingly popular, proposition. In Washington DC, developers registered 1,565 commercial-to-residential conversions from 2020 to 2021, according to statistics from RentCafe and Yardi Matrix, while Philadelphia saw 1,552 conversions over the same period. Developers and city agencies in Chicago are working together on the LaSalle Street initiative, which seeks to bring 1,000 homes (including 300 affordable ones) to a mostly shuttered stretch of the city’s financial district.

“We have a challenge, and then we have a need, and the challenge could actually help us meet the need,” says Marisa Novara, commissioner of Chicago’s department of housing. She’s talking about the stretch of former banks and law firm offices that mostly sit vacant on LaSalle Street, blocks away from the Google offices that are soon to open. Working with the city’s department of planning and development, Novara’s team crafted a call for proposals for mixed-use developments. “Our expectation is that 30% of any residential [housing] that you create in these buildings will be affordable – which is 10% more than the city’s inclusionary housing regulations,” the commissioner says. “We would like to see at least 1,000 units of residential housing and, thus, around 300 would be affordable.” As of now, there are but two affordable housing units in the community area.

Most days, San Francisco’s once-bustling financial district feels eerily empty. Whole floors of buildings sit unoccupied and the whimsical, customized offices where hundreds of tech companies are still nominally based are quiet, their grab-and-go kitchenettes empty and intra-floor slides collecting dust. At the same time, San Francisco’s protracted housing shortage continues to make headlines, pushing out countless longtime residents and driving up the city’s homelessness crisis.

“It kills two birds with one stone,” says Marc Babsin, president of Emerald Fund, a San Francisco-based housing developer that converted 100 Van Ness, a 28-story tower that was previously home to an AAA office, into an apartment building. Rents there are admittedly steep, but there is a lottery for affordable housing units. Some housing rights advocates say current market-rate-to-subsidized breakdowns aren’t equitable. And community resistance has also stymied a number of similar projects in other areas. Worries about noise, density and even shadows can scuttle new developments.

Creating homes out of office space doesn’t always fix a community’s dearth of housing, cautions Melissa Checker, a professor of urban studies at Queens College in New York. “Adding supply doesn’t always solve the problem. It can drive the cost up instead of down.” She suggests extra measures be put in place, such as inclusionary zoning that would require developers to make more units accessible to people across the economic spectrum. Furthermore, she says that developers should be required to accept housing vouchers. “I’m very pro the idea,” she says of the commercial-to-residential conversions that have been mushrooming of late. “But it’s a long-term solution, not the short-term solution we need.”

“The biggest problem for San Francisco is a sort of lack of imagination,” says Sonja Trauss, executive director of Yimby Law, which advocates for new housing throughout California. (Yimby is short for “Yes in my back yard”, a twist on the complaint often heard from residents who don’t want anything new built near their homes.) “Cities need to think about what the point of downtown is and what needs to be there.”

The complications aren’t just political. One of the biggest physical challenges of turning an office building into an apartment building, according to EB Min, founder and principal of San Francisco’s Min Design, is rethinking the large floor plans common to most office towers. As anyone who’s ever worked in a typical high-rise office knows, windows are usually on the outside with most employees working far from views and light. (This is why the “corner office” is such a coveted perk.) Residences, however, require light and ventilation, as well as bathrooms and kitchens in each unit. Not every building is appropriate for this kind of conversion. (Sorry if that crushes your dream of living 1,000ft up atop the Salesforce Tower skyscraper in San Francisco.) “You’d want to pick buildings where it would make sense to do it,” Min explains.

Conversions take an enormous amount of capital and, perhaps more crucially, time. That’s something that people who require housing and the small businesses that need customers can scarcely wait for. “Given how hard it is and how expensive, I don’t see a snap of the finger and then there’s 40,000 more people living downtown,” says Sarah Karlinsky, senior adviser at the non-profit San Francisco Bay Area Planning and Urban Research Association (Spur). It will also take a major leap of faith: a citywide reconception of what neighborhoods look like and what, exactly, people need to achieve around-the-clock quality of life in areas that had previously been the province of daytime workers.

But the conversation has taken off, and it’s gaining in volume. “We’re talking now,” says Yimby’s Trauss. “It takes regular people banging the same ideas around until there’s consensus. That’s how it works. It’s a giant group project.”

Source: the guardian

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