News Archives - Amora Escapes

China Property Stocks Fall 20% From May High as Concerns Linger

Sean Potter — Wed, 12 Jun 2024 08:09:35 +0000

China’s property stocks entered a technical bear market over concerns that Beijing’s efforts to bolster the sector are too small to end the rout.

A Bloomberg Intelligence gauge of Chinese developer shares fell 3.3% on Thursday, extending losses from a mid-May high to almost 21%. Sunac China Holdings Ltd. was the biggest laggard with a slump of 12%, while CIFI Holdings Group Co. sank 8.4%.

Real estate stocks have retreated amid skepticism over a broad support package unveiled by the central government on May 17. While investors initially cheered the policies, which include lower down-payment requirements for homebuyers, they have since questioned how useful they will be in reviving demand and addressing a housing inventory glut.

There’s also the concern about the size of the measures. Officials have said that a central bank program would incentivize bank loans worth 500 billion yuan ($69 billion), but that’s a small fraction of the value of China’s vacant apartments.

”The latest sales data show there’s not much improvement in property fundamentals,” said Jeff Zhang, an analyst at Morningstar Inc. “We may need to wait until the end of year to see a narrowing of declines or a rise in monthly sales as a result of the government’s rescue package.”

New-home sales at the 100 biggest real estate companies dropped 33.6% from a year earlier in May, easing from a 45% decline in April, China Real Estate Information Corp. data showed. While the slight month-on-month pickup buoyed property shares earlier this week, worries over the long-term outlook later pushed investors to take profits.

“We only do short-term investment in Chinese property stocks as the industry’s fundamentals are still weak,” said Joy Young, the founder of Shenzhen Infinite Fund Management Co.

As some investors wait for a clearer sales-recovery picture, others are seeking clues on major policy shifts that may be unveiled at the Third Plenary Session in July.

Beijing will likely follow other cities such as Shanghai and Shenzhen in relaxing housing curbs, according to John Lam, an analyst at UBS Group AG. Other possible measures may focus on destocking, he added.

Morningstar’s Zhang expects the Chinese government to be more active on property supports until July’s plenum, “but the room for policy adjustments may be smaller than before, as the May rescue package is already very forceful.”

Source: Bloomberg

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Javier Valdez — Sat, 08 Jun 2024 10:58:28 +0000

KUALA LUMPUR: Malaysia’s property market is poised to remain stable in 2024, followed by sustained growth in the next three years, bolstered by various initiatives of the Madani government under Budget 2024, said Housing and Local Government Minister Nga Kor Ming.

He said the property market has demonstrated significant growth and resilience, with individual property counters experiencing up to 600% growth in share price appreciation.

He said property counters in the stock market have been on the rise from January 2023 to June 2024, with 76 out of 100 on Bursa Malaysia experiencing an increase in share prices.

“(Meanwhile,) 22 counters showed a decrease in share prices, (and) two counters maintained their share prices despite fluctuations,” Nga said in a statement today.

He noted that among the top counters were DPS Resources Bhd, registering 600% growth in share price, UEM Sunrise Bhd, posting a 347% increase and WMG Holdings Bhd, which appreciated by 326% from January 2023 to June 2024.

“This positive trajectory is expected to continue into the second half of 2024. I firmly believe that under the leadership of Prime Minister Datuk Seri Anwar Ibrahim, our property market will have a bright future in the coming years.

“We must work together to enhance our industry’s reputation and increase the confidence level of investors to make the property market even more resilient,” said Nga.

According to the statement, Malaysia’s property market transactions were valued at RM42.31 billion, with more than 89,000 transactions recorded in the first quarter of 2023. In the first quarter of this year, the value of property market transactions hit RM56.53 billion, an increase of RM14.22 billion, with more than 104,000 deals.

“This significant growth indicates that Malaysia’s property market is recovering well and on the rise,” the statement added.

Source: The Sun

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Gorgeous potential first family home in highly desirable location on the market

Jonathan Barton — Thu, 28 Mar 2024 15:01:47 +0000

FINDING THE perfect first family home can be tricky, but a recent addition to the property market in Gwent could be the answer.

Situated on Woodland Place in the community of Gilfach, Bargoed, this three-bedroom mid-terraced house could offer the ideal starter home for any family.

In what the estate agents describe as a “highly desirable location”, the property is within walking distance of popular schools and has plenty of local amenities nearby, including a convenience store and train station.

According to the estate agents New Horizons, the home could also be regarded as a “dream for anyone into cars or motorbikes”.

The property compromises of a entrance porch, open plan lounge/dining room, fitted kitchen, newly fitted ground floor bathroom, three generous sized bedrooms, double glazing, gas central heating, rear garden with paved patio and large garage with power and light.

It has recently been refurbished to a “high standard throughout”, with two double bedrooms and a single offering an ideal space for a family.

There is a feature fireplace in the lounge area, which could either be used for storage or for a wood burner, while the kitchen offers space for plenty of utilities, such as a tumble dryer, washing machine and dishwasher.

The ground floor bathroom has been fitted as part of the recent refurbishment, so is in excellent condition, as are all three good-sized bedrooms.

The house is being marketed by New Horizons Estate Agents, Bargoed, and currently has a guide price of offers more than £155,000.

New Horizons have said that the property is a “must be seen” before purchase, so if you would like to find out more details or book a viewing, you can do so on the website here, or by calling the estate agent on 01443 801564.

Source: Yahoo

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Eight Golden Rules for Property Investors in 2024

Sean Potter — Sat, 10 Feb 2024 12:38:41 +0000

An expert has shared his eight steps to help boost chances of securing capital growth when investing in property this year.

Jonathan Rolande, the founder of House Buy Fast, says early signs indicate “growing positivity across the market”.

He adds: “We’ve seen three consecutive months of house price rises and it looks as if the repeated interest rate increases which dogged the market in 2023 are over. This will rightly encourage people to look again at property as an area to invest in.”

· Start by checking the demographics. Areas with more older people tend to hold prices well but don’t have as much potential for growth as there are fewer movers.

· Next, look at the schools, the building of a new school or college or an existing one that has improved its ratings is a very good sign. Many buyers and renters will pay more to live near a good educational institute.

· Thirdly, check the ratios – how many properties are on the market in the area and of those, how many are sold. 30 per cent-plus sold is a good indicator. Check rentals too, there should be no more than a handful of properties available to let in the postcode area.

· Four, investigate what prices have done in the past. It’s not a sure-fire way to predict the future but areas that have exceeded past increases or haven’t fallen as far in previous dips should be at the top of your list.

· Take note of crime rates the lower the better.

· Six, investigate any developments nearby. Developers investing millions into property in the area is a very good sign, just be aware that this can have a negative effect – the area could be flooded with buy-to-let, driving prices down.

· Seven, assess if the area is prone to flooding. Those which can be tricky but don’t be too alarmed by online searches. Many areas show a possibility of flooding at some time in the future.

· Finally, ask can you add value? With the right permissions and vision there are ways to improve properties to create more income in rent and the capital value. Moving a kitchen to the lounge area frees up a room, extending into the roof space or garden, changing the planning use or adding a garage can add value.”

Source: Property Investor Today

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The Melbourne Suburbs Where It’s Now a Buyers’ Market

Julian Berry — Wed, 10 Jan 2024 02:52:39 +0000

Melbourne’s property market has started to swing back in favour of buyers rather than sellers, as house prices snap their streak of gains, the choice of homes for sale improves and competition eases.

Some buyers are now in a better position to negotiate a sale, largely in the more affordable apartment segment, experts say, as there are fewer parties competing for these properties.

It’s a contrast from the market earlier this year, when many buyers believed interest rate rises were over and frantically made offers.

But buyers’ chance of success depends on their finances, and some are struggling to take advantage of the slowing conditions as rate rises slash their borrowing power and prices remain high.

SQM Research managing director Louis Christopher said the property market was now changing to favour buyers, though it was a slow transition.

The total number of homes listed for sale had risen by 1.9 per cent in Melbourne in November, the biggest rise in listings across all capital cities, SQM data shows, giving buyers more choice.

At the same time, Melbourne dwelling values stopped rising and edged down 0.1 per cent in November, CoreLogic’s Home Value Index showed.

The auction market is pointing to modest falls in house prices too. Melbourne’s auction clearance rate reached 58 per cent in November, its lowest for the year

Clearance rates at 60 per cent or above usually mean prices are rising, while anything below indicates falls.

The lowest clearance rates across greater Melbourne included the inner suburbs (57.3 per cent), inner south (56 per cent), south-east (55.5 per cent), west (49.8 per cent) and Mornington Peninsula (52.2 per cent).

Christopher said these price falls showed vendors were compromising on price to get a sale over the line.

“It is slowly swinging towards a buyers’ market and our forecast for Melbourne is a modest to moderate decline in house prices to continue [in 2024],” he said.

While the market has changed, it’s not all smooth sailing for buyers. Higher interest rates and cuts to borrowing power make it tough for some to make an offer.

CoreLogic’s head of residential research Eliza Owen said conditions were still tough for buyers, who wanted to borrow enough to get into a market where house prices were still high.

However, they, and home sellers could be in a much better position next year if interest rates fall.

“Depending on whether interest rates fall and how much they fall, we may see a flurry of transaction activity when that reduction in the cash rate begins,” Owen said.

Jellis Craig Stonnington partner Michael Armstrong believed Melbourne’s market had shifted in favour of buyers, but only for certain types of properties.

Renovated or new homes are still selling quickly, Armstrong said. There were fewer of these properties on the market, so listings attracted more competition from buyers.

Buyers have more choice of homes for sale.CREDIT:LUIS ASCUI

Apartments or homes in need of work were offering buyers more time to negotiate and less competition, he said.

“The sale of unrenovated stock is more in favour of buyers because they take a little longer to sell, and buyers can get a better deal – same with land value properties [tear down and rebuilds],” he said.

The changing market has been both a blessing and a nervous time for Danielle North and husband Nick Stebbing, who benefited from the conditions and managed to buy a family home in Brunswick last weekend.

But the couple, both 47, plan to sell the Kingsville house they have owned since 2008, and plan to update it first, to make it more attractive to potential buyers.

Danielle North and her husband Nick Stebbing and their daughter Meg at their Kingsville home.CREDIT:JASON SOUTH

“I am really nervous about selling,” North said.

“It’s not in a fit state to sell,” Stebbing said. “We’ll have to get a bridging loan to get things moving, and fix it up over the holidays.”

While they were happy with their Brunswick buy, closer to their children’s school, rate rises cut their budget and meant they had to adjust their expectations.

“We had to lower our standards,” Stebbing said. “Mostly places in our price range were not in a good state,” North added.

Wheatley Finance’s Andrew Wheatley, who helped North and Stebbing buy their Brunswick home, said some buyers had to rethink their approach to the market because of higher interest rates.

Some were being forced out of the market, as they couldn’t qualify for a mortgage, meaning there is less competition for more affordable properties.

“In the desirable suburbs of Melbourne, it feels like nothing’s changed,” Wheatley said. “But if you move to what first homebuyers are looking at, properties with a price range of $400,000 to $750,000 like a two-bedroom apartment or a townhouse, or a new build in the outer suburbs, there’s no rush or pressure to buy. I’d say it’s more of a buyers’ market.”

Source : TheAge

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Powered by Immigrants, Dubai’s Housing Market Continues to Surge

Jonathan Barton — Tue, 09 Jan 2024 02:42:09 +0000

Despite the turbulence troubling other parts of the Middle East, the residential housing market in Dubai, the capital of the United Arab Emirates, is continuing to show signs of strong growth. Developers in the UAE are reporting another banner year for Dubai’s housing market, with a surge in sales in 2023 over 2022.

After the pandemic of 2020-2021, a post-pandemic rebound followed, powered initially by Russian buyers seeking to shield their assets from sanctions imposed on Russia after its invasion of Ukraine in February 2022.

Then, in March this year, the UAE introduced a flexible work permit allowing people with demonstrable skills to take freelance jobs in Dubai. An influx of digital nomads from Europe and North America followed, looking to settle in a tax-free, amenity-rich environment.

Migrants living in Dubai

“There’s so much movement here. So many different opportunities take place in whatever domain you are,” Kevin Tabba, a 24-year-old from Irvine, California, told The Media Line.

“I primarily work in tech, and it’s super easy to access east and west, which is excellent for developing my business,” he said.

THE BURJ KHALIFA rises more than half a mile above Dubai, making it the world’s tallest building. (credit: ARI BAR-OZ)

Tabba said he had been to buy a two-bedroom condominium in the town of Jebel Ali for $400,000. Such a purchase would not have been possible “in either Los Angeles or Miami,” he said.

Perhaps because of the affordable real estate, Dubai tops global Google searches for places to which to move, ahead of New York or Paris.

For Dora Samoodi, a 39-year-old Iranian, moving to Dubai was a choice to prioritize personal freedoms and tax advantages.

“When you buy a property here, you don’t pay tax on it,” Samoodi told The Media Line. “It’s a great place to live. There’s a lot of freedom. Women are empowered here. You can do anything. You can work.”

According to the Dubai Land Department, $26.6 billion worth of property was sold in the third quarter of this year, a 40% increase from the same period in 2022. The number of transactions increased 22% from last year, reaching 31,216.

Emaar Properties, the largest luxury property development company in the UAE, reported $7.9 billion in sales in the first nine months of 2023, marking a 25% increase over the same period last year.

“Despite the challenges caused by the pandemic, we persevered and continued to build,” Waleed Mohammad AlZoubi, chairman of the Tiger Group development company, told The Media Line.

“Although the pandemic caused a decline in growth, profits, and business, the UAE remained a global leader in managing the crisis,” he said.

In 2020, annual Tiger Group sales were about $500 million. In the first nine months of 2023 alone, the company, which recently built 19 new towers, sold $1 billion in apartments.

“The massive growth in Dubai is beyond words,” AlZoubi said. “The population has multiplied by three times in the past 20 years, when this area was all sand. Nothing was here before, and very quickly, we developed it.”

AlZoubi said that many wealthy immigrants from the developing world were attracted to the UAE because of its strong pandemic response and digital infrastructure.

“Soon after, we saw more Americans come to Dubai for the same reasons they moved to places like Miami,” he said.

While Russians drove the post-pandemic sales surge that pushed Dubai home prices up about 30% in the past two years, the ruble’s decline since then has seen a slowing in demand from Russian buyers.

Tatjana Lescova, Dubai-based associate director of corporate ratings at S&P Global, told The Media Line that she expects the market to cool in the near future.

“Price increases will slow down or decline slightly during the next 12 to 18 months, but I don’t expect significant turmoil in the real estate market,” she said.

Akmal Abdelfatah, a professor of civil engineering at the American University of Sharjah, said that new groups of buyers will likely lead to a continued expansion of Dubai’s real estate market.

“I have lived in the city for long enough to see declines quickly reverse,” Abdelfatah told The Media Line. “We’re seeing buyers from India step in now, the way Russians did during the Ukraine war.”

He said the lack of income tax and property tax in Dubai has made the city attractive to people of many nationalities.

Source : TheJerusalemPost

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China’s Big Property Market Problem Will Take at Least 4 to 6 Years to Resolve

Jeffery Blair — Mon, 08 Jan 2024 10:52:32 +0000

BEIJING — China has a big problem within real estate that will take years to resolve, according to analysis from Oxford Economics lead economist Louise Loo.

Looking at nationwide data — whether based on official estimates of unsold inventory or the construction-to-sales ratio — Loo found it will take at least four to six years for real estate developers in China to complete unfinished residential properties.

That means efforts to boost funding to developers and other efforts to resolve China’s property market problems don’t directly address the bigger issue of uncompleted homes.

“However one slices the data, the existing excess supply in the market is likely to take at least another four years to unwind, absent a meaningful pickup in demand,” Loo said in a report Tuesday.

“Increasing supply coming from secondary market transactions – as households, worried about depleting profits from price declines, sell their second or third homes – is an additional drag to this process,” she said, noting that “developers’ inventory is far too large for households to absorb quickly.”

Apartment homes are typically sold ahead of completion in China, making it critical that developers finish constructing the houses if they are to sell more.

But financing struggles and other issues have meant developers have had to delay home delivery times — discouraging future home sales.

On the extreme end, residential construction in the relatively poor province of Guizhou could take well over 20 years to complete, Loo said in an email, while it will likely take at least 10 years in several other provinces such as Jiangxi and Hebei.

Nomura last month estimated the size of unfinished, pre-sold homes in China is about 20 times the size of property developer Country Garden as of the end of 2022.

Real estate and related sectors have accounted for about a fifth to one-fourth of China’s economy.

Ratings agency Moody’s said late Tuesday it expects that share to decline, in-line with Chinese government objectives. However, the firm pointed out the resulting drop in land sales means local governments may face financial strain if they are unable to offset what’s been a driver of more than a third of revenue.

That means Beijing may need to step in, posing “downside risks to China’s fiscal, economic and institutional strength,” Moody’s said. It downgraded its outlook on China’s government credit ratings to negative from stable.

Moody’s expects China’s growth domestic product to slow to 4% growth in 2024 and 2025 and average 3.8% a year from 2026 to 2030. The firm maintained an “A1” long-term rating on China’s sovereign bonds.

Spillover?

Despite persistent property market troubles, Oxford Economics’ Loo doesn’t expect significant spillover to the rest of the economy.

“We think China’s housing downturn will tread a different path than that of the US, Spain, or Ireland 10-15 years ago, and is unlikely to trigger a broader financial crisis,” she said.

In those situations, falling house prices, mortgage failures and bank lending were interlinked, Loo said, pointing out the difference in China: the greater role of policy, state-controlled banks and more stringent mortgage terms.

Other analysts also expect China’s economy will take its own path.

“We do see some similarities between China’s situation and the economic stagnation in Japan after the latter’s property bubble burst in 1991,” S&P Global Ratings said in a report Monday. “However, S&P Global Ratings believes China can avert this outcome, helped by regulatory action and the strength of its banking and corporate sectors.”

Source : CNBC

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Revealed: the Top 10 UK Cities for House Price Growth

Javier Valdez — Sun, 07 Jan 2024 02:24:13 +0000

There was disappointing news for British homeowners last month, with the Office for Budget Responsibility (OBR) forecasting house prices to fall by 4.7pc in 2024. But taking a longer term view, where should buyers look for the best chance of price rises over the next decade?

With London having priced itself out for many investors, many have turned their attention to Britain’s other major cities.

Using the economic and demographic drivers that will likely underpin price growth, analysts at CBRE, a global commercial real estate company, ranked 50 towns and cities by sector, including office space, retail, leisure, tourism, student accommodation and housing supply.

Here, Telegraph Money reveals the 10 cities to watch.

Manchester

Topping many of CBRE’s metrics, but also taking first place in a separate “Big Six” cities report by estate agency JLL, Manchester’s economy has grown 32pc over the past decade.

Top for office space and student accommodation growth, Manchester has one of the biggest science graduate populations, and the city’s new innovation district ID-Manchester, will occupy a nine-hectare site near Piccadilly Station and include 1,350 new homes.

Manchester is also ranked top for potential growth of multi-family homes in 2030. In the centre, Ancoats, New Islington and East Piccadilly areas still have “room to grow”, says Martin Moston of agent Jordan Fishwick.

“In Ancoats, an average two-bed, two-bath apartment will cost £220,000 to £260,000 and rent out for £1,200-£1,500, giving a good return.”

He reports interest in Sale, Greater Manchester, for its schools from overseas buyers, with family houses bought for £380,000-£500,000. Other agents tip Fallowfield and Salford for the best rental yields.

Birmingham

Population growth and the largest rental market of the cities surveyed gives Birmingham the biggest family home market in five years’ time, according to CBRE.

Look for areas with good connectivity, says Ian Crampton of agent Ferndown Estates. Chelmsley Wood, next to the pricier Marston Green near Birmingham airport, is popular with investors.

“Three-bedroom houses are being bought for £175,000 and converted into HMO rentals for students and young professionals paying £650 a month.”

It takes 13 minutes by train from Marston Green into the city centre. Nearby Kitt’s Green and Stechford are in the B33 postcode, which had one of the highest average price increases in 2022, according to OnTheMarket portal.

Although Selly Oak is a go-to for student lets, Northfield is a good rental investment, says Raj Bedi of Martin & Co.

“Three-bedroom houses for £200,000 are being bought then rented out for £1,100 a month.”

Bristol

Scoring highly across CBRE’s metrics, Bristol is among the top three for employment growth, affordable housing delivery and leisure expansion.

From its universities and tech SMEs, Bristol’s young and diverse population has been attracted to apartments in the redeveloped port area, says Shelley West at City & Country, a developer.

“Employment growth underpins the fact that first-time buyers have been 60pc of sales at Factory No.1, [the conversion of a former tobacco factory] in Bedminster.”

New-build projects in the city centre and Harbourside attract buy-to-let investors as yields of 5pc can be achieved, says Charlotte Strang of Strang & Co Property Search.

“Also of interest is the Temple Quarter regeneration area, surrounding Temple Meads Station, and new residential neighbourhoods outside the city such as Filton [on a former airfield].”

Apartments at The Dials, a new community, start at £199,000 (brabazon.co.uk).

Edinburgh

Hotels, offices and student accommodation are major growth sectors for Scotland’s capital. Savills reports that Haymarket, Roseburn and Dalry are all benefiting from the recent office-led development. The average property sale in these areas reached £334,268 in the 12 months to September 2023 – 24pc more than the 10-year average.

Leith benefited from the extension of the tram network there in June, says Ben Fox of Savills Edinburgh, yet with the average price still 13pc behind the Edinburgh City average of £313,102, it “shows room for further growth”, he added.

While the Georgian houses and beach access makes Portobello hugely popular post pandemic, new-build regeneration projects in Canonmills, ideally located next to New Town, are attracting young professionals. New-build apartments start from £270,000 at 67 St Bernard’s, a new scheme there.

Liverpool

There’s a rekindled buzz on Merseyside that has been building since it was European City of Culture in 2008, through to this summer’s hosting of the Eurovision Song Contest.

Much of this is centred around the docks where major regeneration is taking place including Everton FC’s £500m new stadium and a cruise ship terminal. Nearby Ten Streets is one of the UK’s fastest growing digi-tech clusters.

The latest Zoopla data reveals that Liverpool is the fastest moving market in England, with the typical seller agreeing an offer within 17 days – half the UK average.

In a vast former Tobacco Warehouse in Stanley Dock, new flats cost from £265,000, but other areas on the up include Waterloo, Aigburth, Sefton Park, Toxteth and Anfield, where the average terraced house – popular with investors for 7pc yields – sells for £106,979, according to Rightmove.

Glasgow

With over 92,000 students in higher education, Glasgow continues to evolve into a knowledge city. The average property price has risen from £108,221 in 2013 to its current £208,557, according to Rightmove.

Some of the best rises are being seen in the regenerating areas south of the Clyde, such as New Gorbals, Pollokshields, Strathbungo and Newlands.

Considerable growth has been seen in Finnieston where new-build energy-efficient developments now sit alongside Glasgow’s traditional tenements.

“Some of Glasgow’s biggest employers are close by, such as Barclays, BBC, Morgan Stanley, JP Morgan,” says Carole Mackie, head of residential development for Savills Scotland. Financial companies employ 37,000 in the city – and this is growing. Virgin Money has a new HQ there.

Leeds

Retail growth and student housing are major drivers for Leeds, a vibrant city with a diverse economy. Its 60,000 students make up 13pc of the city’s population.

Says Lois Power at Carter Jonas: “With rental demand and population growth currently at seven times the rate of London, Leeds is attracting investors, with rental yields of 7-10pc.”

While Hyde Park, Headingley, Burley, Woodhouse or the city centre remain sought-for lets to students, first-time buyers are more likely to head to Holbeck and Beeston, an easy commute to the city centre.

The average property in Holbeck is £109,494, according to Rightmove, while for families, Roundhay remains popular (average price £358,324).

Southampton

Tourism is the big driver in Southampton. According to CBRE, domestic travel is forecast to increase 36pc by 2030 with Brighton, Southampton, and Glasgow forecast to be the biggest destinations for domestic visitors.

The top UK port for cruise passengers, Southampton has a “high” score of 82/100 as a short-term rentals location (demand and revenue potential) for would-be investors, according to the market analyst, AirDNA.

The suburb of Woolston is one to watch, says Barney Brander of Lets Rent estate agents. “Values are lower than across the river [Itchen] and with development around Centenary Quay [a former shipyard] it’s popular with investors,” he says.

The average house price in Woolston is £245,347 (Rightmove), and two-bedroom starter homes cost £230,000 to £250,000, and rent for £1,100 to £1,200 per month, according to Brander. “Average yields in the city are 5.57 to 6pc.”

Brighton

Tourism is also a big driver for Brighton. Along with Belfast and Bristol, it is expected to experience the biggest growth in consumer spending, retail and leisure, says CBRE – something the new branch of Ikea opening on Churchill Square will hope to tap into.

With the average property price at £515,871, according to Rightmove, buy-to-let yields are not tempting, and buyers looking for more growth are looking at nearby Worthing and Eastbourne instead.

Yet some pockets of Brighton, including its iconic squares, tend to be immune from downturn price wobbles, says Toby Powell of agent Winkworth.

“Seven Dials, Hove Park, Poets Corner, the New Church Road area and North Laine remain popular with young families,” he says.

Cambridge

Life sciences, affordable housing delivery and office growth are the big three for Cambridge, a city whose GDP is expected to grow by 15.9pc over the next decade, according to CBRE.

Yet with the average price of £579,786, according to Rightmove, 13.7 times median local incomes, buyers are looking to the suburbs.

Major development around the Cambridge North Railway station including 4,000 new homes, has drawn buyers to suburbs such as Chesterton and Arbury and the villages of Histon and Girton.

This is set to continue with Cambridge Science Park North planned near Impington and the A14, says Jack Johnson of Carter Jonas.

Source : TheTelegraph

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S. Korea’s Household Assets Fall on Property Market Slump

Garrett Townsend — Sat, 06 Jan 2024 02:17:38 +0000

SEOUL, Dec. 7 (Xinhua) — South Korea’s household assets fell for the first time in over a decade on the back of the property market slump, government data showed Thursday.

The average asset per household amounted to 527.27 million won (398,420 U.S. dollars) at the end of March, down 3.7 percent from a year earlier, according to joint data from Statistics Korea, the Bank of Korea, the Financial Supervisory Service.

It marked the first reduction since relevant data began to be compiled in 2012.

Per-household real asset, such as land and housing, retreated 5.9 percent in the cited period, but the financial asset expanded 3.8 percent.

The average value of residing homes per household tumbled 10.0 percent for the past year amid higher borrowing costs.

The Bank of Korea had left its key rate unchanged at 3.50 percent since January after hiking it by 3.0 percentage points for the past one and a half years.

Of the total household assets, the real asset accounted for 76.1 percent at the end of March, down 1.7 percentage points from a year earlier.

The average asset among households in the top 20-percent income bracket stood at 1,174.58 million won (887,550 dollars), about 6.8 times larger than 172.87 million won (130,630 dollars) in the bottom 20-percent income group.

Asset for those in their 60s or older added 0.9 percent in the cited period, but assets in all other age groups shrank in single digits for the past year.

The average debt per household inched up 0.2 percent from a year earlier to 91.86 million won (69,410 dollars) at the end of March.

Per-household financial debt reduced 1.6 percent, but security deposit for homes advanced 5.3 percent.

Of the total households, the proportion of households with debt came in at 62.1 percent at the end of March, down 1.3 percentage points from a year earlier.

The average debt among households in the bottom 20-percent income bracket surged 22.7 percent to 20.04 million won (15,140 dollars), while debt in the top 20-percent income group rose 0.4 percent to 206.34 million won (155,920 dollars).

Meanwhile, the per-household average income grew 4.5 percent over the year to 67.62 million won (51,100 dollars) in 2022.

Earned income increased 6.4 percent to 43.90 million won (33,170 dollars), and business income climbed 4.0 percent to 12.06 million won (9,110 dollars).

Public transfer income declined 4.8 percent to 6.25 million won (4,720 dollars) last year on lower government grants for small merchants and micro businesses suffering from the COVID-19 pandemic.

The average non-consumption expenditure per household, including tax, social insurance fee and interest payment, expanded 8.1 percent to 12.80 million won (9,670 dollars) in 2022 compared to the previous year.

Interest payment surged 18.3 percent last year, while expenditure for tax and social insurance fee gained 4.1 percent and 8.2 percent respectively.

Source : Xinhua

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US Slowest Housing Market in Years is Weighing on Consumer Spending

Fred Aguilar — Fri, 05 Jan 2024 02:11:51 +0000

PLUNGING US home sales are having a ripple effect on consumer spending, as fewer Americans are moving into houses that need to be outfitted with furniture and appliances.

The effects are visible across the economy. Spending on furniture and related items fell nearly 12 per cent from the year-earlier period in October. Home goods sellers including Z Gallerie and Serta Simmons Bedding have filed for bankruptcy this year, citing weaker demand, and more are probably coming. Williams-Sonoma’s chief executive said last month that consumers are hesitant to spend on expensive furniture. Home Depot, the hardware and appliance store, said its revenue will likely drop this fiscal year.

The Federal Reserve last year started a rate hiking campaign to tame inflation, and slowing the housing market is a key way to make that happen. In October, mortgage rates reached their highest level since 2000, helping to make housing the least affordable since at least the 1980s.

On Thursday (Nov 30), the effects of low affordability became even clearer: a gauge of pending sales for existing homes reached its lowest level since the measure started in 2001. Home loan rates have started drifting lower amid growing hopes the Fed will start to expand the money supply again next year, but it could take years for the housing market to return to normality.

“It’s just less affordable to buy a house today than it was a couple of years ago when rates were much lower, and that’s closed out a certain amount of spending that would have otherwise happened,” said Jack Kleinhenz, chief economist at the National Retail Federation.

The average household shells out US$8,000 more on home-related goods and improvements in the two years after a home purchase, according to a study published last year by professors including Efraim Benmelech at Northwestern’s Kellogg School of Management.

Falling revenue

Without that expenditure, retailers are feeling the pain. Williams-Sonoma, owner of Pottery Barn, estimated last month that its revenue will fall as much as 12 per cent this fiscal year. Ethan Allen Interiors, a maker and seller of furniture, posted a 24 per cent decline in sales in the latest quarter, due in part to slowing demand.

Some firms have struggled to navigate the broad decline in consumer expenditures. A series of companies that provide home furnishings have sought bankruptcy protection this year, including Z Gallerie, Mitchell Gold + Bob Williams, and discounter on Tuesday Morning. Pillow maker Pegasus Home entered bankruptcy in August, mattress wholesaler Serta Simmons did so in January and the photo frame seller NBG Home sought protection in February.

“From a creditor and trade vendor perspective, there’s concern in the industry,” said Jordana Renert, a partner in the bankruptcy department at law firm Lowenstein Sandler, referring to investors in stores that sell decor. “Until new home purchases pick up or mortgage rates decrease, I think the home-goods furniture industry may continue to see a pause in consumer spending and an increase in chapter 11 filings.”

With mortgage rates having risen as much as they have, it’s not clear when home purchase volume will resurge. Many homeowners are unwilling to sell, in part because that means letting go of the cheap mortgages they locked in during the pandemic. That’s translated to relatively more of the transaction volume coming from new home sales, where developers are looking to offload homes they’ve built.

More than 60 per cent of US home loans have rates below 4 per cent, according to data from Black Knight, while the latest 30-year Freddie Mac mortgage rate is closer to 7.2 per cent. On average, a 1 percentage point increase in mortgage rates relative to where borrowers have locked in leads to a 9 per cent decline in the rate at which people move houses, according to a study by professors including Julia Fonseca at the University of Illinois Urbana-Champaign. If a homeowner, for example, were thinking about changing jobs, the new position would have to pay much more for the consumer to be willing to give up their mortgage.

“Lock-in can prevent households from pursuing labour market opportunities that would have been worthwhile otherwise,” Fonseca said.

Homebuilder pressure

Lofty interest rates are not only crimping activity on the demand side, they are also pushing up prices on the supply side of the market and are threatening to keep them elevated for some time, said Robert Dietz, chief economist at the National Association of Home Builders.

The interest rate that homebuilders are paying to finance the construction of single-family homes is close to 13 per cent, Dietz said, and material costs have risen alongside inflation. That has made it more difficult for builders to break ground on new homes now, which could squeeze supply for two to three years. The impact could be felt across the economy for some time, according to Dietz.

“If you take all the challenges in the housing market and think of them almost as taxes on new housing supply, those taxes are restraining economic growth,” Dietz said. BLOOMBERG

Source : TheBusinessTimes

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