The rent is, infamously, too damn high. That refrain has such staying power because the United States’s noxious rent crisis has shown no signs of abating, with rents rising over 30 percent since 2019. All manner of ill effects have resulted; the rapid simultaneous growth of the homelessness crisis is no coincidence.

Obfuscations aside, the correlation there is quite direct. But the origins of the rent and housing crisis itself can seem a bit more diffuse: perhaps some combination of shortages driven by lulls in development (though in truth, we don’t lack housing per se so much as we lack affordable, low-income housing). Those shortages, in turn, can be influenced by zoning law, mortgage interest rates, various public policies, and other variables like rising materials costs. Neither is it helping matters that Wall Street private equity funds are buying up homes in droves to flip them for profit.

But in 2022, a singular factor that exerts an outsized influence on rent hikes was identified: In October of that year, reporting by Heather Vogell in ProPublica turned up some remarkable revelations. Vogell found that the nation’s punishingly high rents are not solely attributable to vague and abstract structural trends. In fact, allegedly, landlord-coordinated price-gouging has been taking place, and at a staggering scale.

The ProPublica investigation found that a software called YieldStar, supplied by a company called RealPage, has provided a means to share pricing information between large corporate landlords. The program feeds this information into an algorithm that determines the highest possible rent and directs its users to set rents to maximize profit — effectively, legal challenges argue, a form of collusion-by-algorithm to keep rents high. The software has facilitated anti-competitive market manipulation on a scale that multiple state attorneys general and the Department of Justice (DOJ) have charged is tantamount to a nationwide price-fixing cartel.

The subsequent litigation efforts and government inquiries into RealPage and many of its clients continue to mount: class-action and private lawsuits are pending in multiple states, and may set an important precedent for analogous cases. Now, the Department of Justice has weighed in to support plaintiffs and is conducting civil and criminal investigations of its own — and relatedly, a recent FBI raid of one of its major clients indicates that RealPage is facing some real trouble.

Nationwide, the ubiquity of RealPage software among residential management corporations has meant that its algorithmic suggestions and competitor price data have in all likelihood played a determining role in the inflation of rents across the country, exacerbating the suffering of everyday people and inflaming the homelessness crisis. Depending on the outcome of litigation, the cases against RealPage have the potential to set major precedents: Inadvertently, RealPage may end up being comparably influential in the future prosecution of algorithmic price-fixing charges.

Price-Fixing at Scale

The sweeping success of RealPage’s algorithmic rent-setting software product, YieldStar, has its origins in a questionably green-lit 2017 corporate merger in which RealPage acquired four companies — its largest competitor Rainmaker Group among them. The latter company made a software called Lease Rent Options, which, once acquired, granted RealPage access to software technologies and reams of new client data. (The acquisition of the original, obsolete version of the YieldStar platform appears to date to 2002). RealPage found great success hawking its signature YieldStar product and later comparable software suites, thoroughly embedding itself in the industry and attaining near-ubiquity among major landlords. Today, RealPage has traded on that data and rent-raising acumen, expanding to immense proportions, and its products are now involved in the administration of millions of housing units worldwide.

That success is attributable to its adeptness at increasing profits — by a “consistent” 3 to 7 percent year-over-year growth rate on a given property, according to the company itself. At the highest levels, as rent climbs ever-higher and the increased income from those properties trickles all the way up to the top of the hierarchy, the largest corporate landlords have been treated (or rather, have treated themselves) to a profit windfall.

RealPage software works by computing and sharing both public and private rent data from the other local managers, including direct competitors, in RealPage’s extensive client portfolio. To a given client, the software then presents “suggestions” for just how high rates can (and should) be pushed for a property asset in the area. The sustained, elevated rates that the algorithm spits out are only possible when squeezing a powerless and captive audience — when all the other apartment complexes in town are doing it, too.

The effective result is coordinated price-fixing: i.e., the mutual (and illegal) agreement between competitors that none among them will undercut the other’s prices too severely, keeping their products as expensive as possible across the board and ensuring more profit for all. In addition, the widespread use of RealPage software may not only catalyze rent increases — it also incentivizes landlords to accept the low occupancy and high turnover rates that can come with inflated prices and evicting tenants to raise rent.

In effect, the program trains landlords to operate against what was considered conventional industry wisdom: that high occupancy is the best route to high profits. Instead, landlords now trade on RealPage’s key discovery, the strategic innovation that has enabled the algorithm to deliver such outsize returns: if profit is all you care about, then it’s more effective to prioritize income by rent-gouging instead of keeping more units occupied. Low occupancy and higher prices then worsen shortages, establishing a feedback loop.

It’s true that this modern variety of illegal coordination relies on algorithmic computations rather than the more traditional smoke-filled back rooms. However, it is appearing that, legally speaking, that distinction may be moot.

Wave of Litigation

Numerous lawsuits promptly followed the publication of the ProPublica investigation. Initiating the series was a suit filed in San Diego, with renter plaintiffs from both California and Washington State suing RealPage as well as massive landlords Greystar and Lincoln, which are some of the largest property management firms in the nation, just days after the article came out.

Analogous litigation has also been filed in Fresno, California. Across the country in Nashville, Tennessee, a number of private lawsuits against RealPage and landlords were consolidated into a single case. Suits against two of those defendants were settled in February, but plenty more remain ongoing. Additional class-action suits — including in a suit targeting RealPage plus nine landlord companies in Arizona, and another against RealPage and 14 landlords in Washington, D.C. — are also well underway.

Lee Hepner is an antitrust lawyer and senior legal counsel at the American Economic Liberties Project. Reached by Truthout, Hepner detailed the potential significance of the various incarnations of the RealPage litigation. To begin with, the government handling of the litigation from case to case is far from assured. Different parties in the Federal Trade Commission (FTC) and the Department of Justice, Hepner points out, fall across a spectrum of opinions as to the relevance of existing antitrust and price-fixing law to these sorts of cases.

An analogous case against Rainmaker (the same company that merged with RealPage), which was under fire for its provision of software that allegedly helped Nevada hotels coordinate prices, was thrown out by Chief Judge Miranda Du — it could not be proven, according to her ruling, that the hotels actively collaborated to fix prices. Du’s decision could prove highly relevant to other cases against RealPage, as it highlights a distinction in thinking among different elements in the criminal legal system.

While Judge Du saw the algorithmic aspect as a novel application of price-fixing law, Hepner explained that others in the legal system have a different approach: “You have a different school of people, including members of the Federal Trade Commission and Department of Justice, who have argued that price-fixing by algorithm is still price-fixing. There’s a little bit of an ideological disconnect between the camp that says, ‘This is price fixing — doesn’t matter that it’s being done with a software algorithm,’ and the judiciary, particularly the case of Judge Du, saying that this is a relatively novel application of price-fixing law because it invokes the functionality of these newer software algorithms.”

Hepner, speaking from experience as an antitrust lawyer, explained how difficult it can be to further a price-fixing charge through the court system. “These cases are making their way through the courts, and where they get tripped up is at the motion to dismiss phase,” he told Truthout. “The Supreme Court, going back to 20 years ago, has really raised the pleading standards required to survive a motion to dismiss phase. That phase is very early on in the litigation, before parties have been able to conduct any discovery, so they’re operating on limited facts.” The legal procedures structuring these lawsuits may well have a determinant impact on the results.

This might well explain the early settlement reached in the Nashville cases — there are difficult hoops that suits such as these must make it through. As Hepner said, “I think we’re learning whether existing law is adequate to confront the problem of algorithmic price fixing. And we’re learning that through how judges are applying it, in somewhat inconsistent ways.”

The Department of Justice has shown signs that, at least in some cases, it does back plaintiffs bringing the suit against RealPage, indicating that the case is a viable one; before the settlement, it gave an official blessing of sorts to the tenant plaintiffs in the Nashville cases, issuing a type of legal memorandum called a Statement of Interest of the United States, in which the DOJ reiterated the antitrust statues in question. Along with effectively siding with tenant plaintiffs against RealPage, the Justice Department also initiated a civil proceeding of its own in late 2022.

On two occasions, U.S. senators have written letters to the Department of Justice Antitrust Division requesting further, potentially criminal investigation into RealPage. First came Amy Klobuchar, Dick Durbin and Cory Booker in late 2022, followed in March 2023 by Elizabeth Warren, Tina Smith, Bernie Sanders and Edward J. Markey. The latter four urged in their letter that “the DOJ should act to protect American families and closely review rent-setting algorithms like YieldStar to determine if they are having anti-competitive effects on local housing markets that have seen increased institutional investor activity.” Evidently taking heed of their words, later that month, the Department of Justice opened a criminal probe, in a significant escalation. May’s FBI raid of the offices of RealPage client Cortland Management appears to be related to that inquiry.

Interestingly, it’s the third time that the DOJ has intervened in cases of algorithmic pricing lately; clearly, it considers algorithmic collusion as equivalent to the more familiar kind. In fact, in one of those cases, filed by a Seattle tenant against Yardi Systems, which produces comparable property management software, the plaintiff is leveling very similar charges as those faced by RealPage — in this instance against a Yardi price-setting software product called, far too pointedly, “RENTmaximizer.” In addition to the Nevada hotel case involving Rainmaker, Hepner also pointed to a case involving potential algorithmic price-fixing collusion via sharing private information, this time in the poultry industry: one of two lawsuits against the AgriStats software, another price clearinghouse venue, which it is alleged, facilitates “anticompetitive information exchanges.”

One of the ongoing class-action lawsuits against RealPage has been filed in Arizona by the office of Attorney General Kris Mayes. Truthout reached Mayes’s office for comment on the pending litigation. Asked about the nature of the charges against RealPage, Director of Communications Richie Taylor described the violation as follows: “The defendant landlords illegally colluded with RealPage to artificially raise rents and concealed their conspiracy from the public. By providing highly detailed, sensitive, non-public leasing data with RealPage, the defendant landlords departed from normal competitive behavior and engaged in a price-fixing conspiracy. RealPage then used its revenue management algorithm to illegally set prices for all participants.”

Chiefly, in this particular case, the violations are of antitrust and fraud laws on the Arizona books: the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act. The latter is relevant because, as Taylor explained, the Consumer Fraud Act “makes it unlawful for companies to engage in deceptive or unfair acts or practices or to conceal or suppress material facts in connection with a sale, in this case apartment leases.”

The AG’s office drew a direct link from RealPage’s widespread availability to the local rent crisis and tenant harms: “In the last two years, residential rents in Phoenix and Tucson have risen by at least 30% in large part because of this conspiracy that stifled fair competition and essentially established a rental monopoly in our state’s two largest metro areas.”

The Arizona class-action suit is pursuing an injunction to halt RealPage’s practices, as well as “restitution for consumers harmed by their conduct, civil penalties to the full extent authorized by Arizona law,” plus “any other equitable relief the Court deems appropriate.” In a certain respect, RealPage has already halted of its own accord: according to some sources, YieldStar has been shelved in the wake of the lawsuits. However, RealPage continues to operate a rebranded “AI Revenue Management” suite that empowers clients to “Maximize revenue potential with timely, actionable data.” The company will also be rolling out the new, AI-driven “Demandx,” promising “data-informed insights” to “optimize the entire demand funnel,” as the business press breathlessly reported.

Cartel Enforcers

RealPage has certainly found themselves on the defensive lately. But the Department of Justice and its Antitrust Division were not always such a bitter foe. It was under the Trump DOJ that the merger between RealPage and Rainmaker, which supplied the data and instigated the chain of events that brought RealPage software to nationwide prominence, was approved by the very same Antitrust Division. Well, not precisely the same one — in another ProPublica article, Heather Vogell cited a source who claimed that DOJ staff concerns raised internally at the time “were overridden by political appointees of former President Donald Trump.” The Biden Department, conversely, is keen to make antitrust enforcement one of its primary focus areas.

Reached for comment by Truthout, RealPage directed readers to a previously published statement. Company representatives have contested in court arguments that, because their software only offered “suggestions” and set prices by faceless algorithm, its functions did not amount to facilitating collusion or price coordination. Similar points were raised in the letter the company wrote in response to senators’ calls for investigation, claiming that reporting misrepresented the algorithm’s functioning.

Nevertheless, as Department of Justice prosecutors wrote in the Statement of Interest, “[W]hether firms effectuate a price-fixing scheme through a software algorithm or through human-to-human interaction should be of no legal significance. Automating an anticompetitive scheme does not make it less anticompetitive.”

And, more to the point, findings of the DOJ probe appear to indicate clear intent on the part of RealPage to incentivize and even enforce compliance with the algorithm’s calculated rent maximums — going beyond friendly “suggestions.” Again, in a price-fixing gambit, in order to reap the benefits, it is critical to ensure prices remain high throughout the market; one undercutting competitor can spoil the game.

As Hepner explained, there are indeed significant obstacles that a case of this sort must breach. But in the RealPage cases, it’s becoming apparent that evidence of active coordination and enforcement is rather damning. In a price-fixing case, said Hepner, “The burden of proof is on the plaintiffs to plead more than just what’s called ‘conscious parallelism.’ It’s got to be more than just the fact that competitors were raising or lowering their prices around the same time. You have to allege actual evidence of an agreement between the parties.”

“The key variable here, where we see the cases break,” he went on, is the evidence of RealPage’s enforcement of prices. “In the hotel price-fixing case in Nevada, the court did not find evidence that the parties were actually adhering to the price recommendations of this central Rainmaker algorithm. … Hotel chains weren’t necessarily taking the recommendations.”

“That’s very different in the RealPage cases,” Hepner continued. “The pleadings there suggested that there was actually a very cumbersome process [that was necessary if a client wanted to] deviate from the recommendations that were being made by RealPage.”

There was, Hepner noted, an allegation that individual clients of RealPage were assigned a pricing adviser who would ensure compliance with these algorithms. “The penalty for which could be, you get kicked out of the algorithm’s pricing recommendations, and you no longer get to use RealPage. They were really enforcing its price recommendations — and that was evidence of an agreement.”

The DOJ’s Statement of Interest echoed those findings that arose during pleading: “To ensure that the landlords abide by these ‘recommendations,’ RealPage puts significant pressure on them ‘to implement RealPage’s prices,’ including by requiring clients to submit requests to deviate to the ‘corporate office’ and tracking the ‘identity of the client’s staff that requested a deviation. … As a result, landlords using RealPage adopt RealPage’s recommendations 80-90% of the time. … Collaboration on prices, including via sharing nonpublic pricing and supply information, is thus the central feature of the product.”

The DOJ statement also describes and quotes an especially damning characterization: “As an employee for one landlord stated: While ‘we are all technically competitors, [RealPage product] helps us to work together … to make us all more successful in our pricing,’ as the software is ‘designed to work with a community in pricing strategies, not work separately’” [emphasis added].

The text of the San Diego lawsuit contains a similar charge, detailing RealPage’s encouragement and outright requirements of conformity with the “cartel’s” pricing demands:

If [landlords] wish to diverge from the “approved pricing” they must submit reasoning for doing so and await approval. RealPage encourages participating Lessors to have daily calls between the [landlords’] employees with pricing responsibility and the RealPage Pricing Advisor. … RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating [landlords] must adopt RealPage’s pricing at least 80% of the time.”

Another factor upon which RealPage cases may hinge is the use of public vs. non-public information. It’s perfectly legal for a company to use publicly available information to set prices. But, said Hepner, “If you’re mixing non-public information into that analysis, and that non-public information is being shared with competitors, that, too, can be evidence of an agreement.”

The result is what’s known as a hub-and-spoke conspiracy, said Hepner. “RealPage, the hub, was enforcing its recommendation on the spokes, the landlords, which created a rim” of collusion. In the Nevada case, conversely, because recommendations were not enforced, “they could not prove that there was actually a rim connecting all of the spokes. Without that rim, you don’t have an agreement, under the law.”

It would seem that there is abundant evidence legitimating the charges tenants are bringing against RealPage in cases nationwide. However, again, as Hepner noted, the risk to these lawsuits is that, because major decisions are made in the pleading stage, “the court is exercising major discretion to make assumptions about the full facts and nature of the case before discovery has come to light, before you actually have that real information to base it on.” For that procedural reason — as well as the differences of opinion in the Department of Justice regarding the appropriateness of price-fixing law — it’s possible that some of these lawsuits may fail.

For the time being, as litigation mounts, RealPage’s operations continue in the background. The company’s offerings are not limited to algorithmic rent services; it also produces a tenant screening program, a type of product rife with bias — and a product over which RealPage was fined $3 million by the FTC for failing to ensure personal information was accurate. (RealPage is also now owned by private equity company Thoma Bravo, in an intersection of insidious housing trends.) Those deep pockets may help prolong the lawsuits far into the future.

Hepner offered strategic insights into the future progression of the cases: “If a price-fixing case can survive the ‘motion to dismiss’ phase, then you’re in full-blown litigation. … Some parties may decide, if they lost the motion to dismiss … [that they would] rather settle this than go through the whole process of litigating a very costly, expensive and cumbersome trial.” This was likely the origin of the early settlement reached in Nashville: “I think that’s what happened in the Tennessee case — some parties saw the motion to dismiss as the writing on the wall,” Hepner told Truthout.

Because of the high profile and the novel (i.e., algorithmic) aspects of these cases, it’s apparent that the ultimate outcomes of RealPage lawsuits may have a significant precedent-setting impact. Asked if he felt the RealPage litigation would form an influential precedent, Hepner said, “I think so. These cases are informing each other. … There’s certainly a dialogue going on, not just between the defendants, but among the district courts that are considering these cases. I think we’re watching as the law is being shaped in real time.”

Real People

The effects of RealPage’s price-setting facilitation and landlord profiteering were not confined to an abstract financial realm. They had substantive impacts on people’s lives, livelihoods and well-being. Truthout spoke with tenants of corporate landlords to learn how the rent crisis has impacted them. Sarah (who requested to go by a first name only to avoid any potential retaliation from her landlord) lives in a one-bedroom in a large apartment complex administered by a major corporate landlord in Tucson. Echoing the facts presented in the lawsuit by AG Mayes’s office, she described the everyday frustrations of living in Tucson, where median income levels rate below the rest of the state and the national average.

“In 2021 to 2022, rent increases went nuts. … My rent went from $1,240 to $1,450. They then raised me to $1,500 and started charging me for the garage, which I didn’t have to pay for my first year here.” Sarah alleges that a manager informed her that they adjust prices as often as “every two days to match the market.” When she attempted to press them about their use of RealPage to tune prices as high as possible, they demurred, claiming that it was proprietary information.

Sarah is hoping that the Arizona lawsuit brought by tenants and AG Mayes’s office against RealPage and its clients might eventually include her own corporate landlord, one of the largest in the region; right now, the company goes inexplicably unnamed in the suit, for reasons unclear.

In the meantime, though, Sarah says her rent has stabilized for now. “I think they probably know at this point they’ve stretched people out as far as they can go,” she told Truthout. “It’s just become unmanageable, since wages are so low in Arizona. I’ve had to change jobs like four times since I moved here, and have a second job on the side.”

As a result of long-stagnant wages and the rent crisis, stories like Sarah’s are not uncommon. Bri is a disabled woman of color who has lived in Boston for three years; she also requested that she be referred to by only her first name to avoid any consequences for speaking out. In that span, she’s moved three times, in large part due to rent increases. Her current residence is managed by Bozzuto Management Company — one of the 14 named alongside RealPage in the lawsuit filed in Washington, D.C. by Attorney General Brian L. Schwalb.

Bri described major frustrations in trying to secure housing compliant with the Americans with Disabilities Act (ADA) in a major city. First of all, before her tenure at a Bozzuto building, she lived in a unit owned by another property management corporation (almost without a doubt another RealPage customer, as the software’s use is endemic among corporate landlords, with Boston being no exception). When that company decided to increase her rent by $600 a month, an apartment for which she was already paying $3,150, Bri and her husband decided to move out.

She moved to a Bozzuto property in August 2023, paying $2,330 for a smaller ADA-compliant unit. But when a leak developed in her unit, she was forced to move to a different (though, she says, not better) unit — and was now paying $2,650 a month for the privilege.

“It’s a lot, to move. Every year I’ve had to move because the rent went up, or some problem with the commute. … It’s really frustrating that we couldn’t get the same rent [as the previous unit that was damaged by the leak],” she told Truthout. “Our unit is not too much different, other than our windows are slightly bigger.” And what’s more, she said, upon her next lease renewal, her landlord will be increasing her rent by another $300, on top of the already elevated rate.

Bri, speaking for herself and other tenants, described a pattern of poor responsiveness to maintenance issues and Bozzuto’s attempts to push for rent increases whenever possible. She reported seeing company social media posts boasting of 95 percent occupancy rates when the buildings were still unfinished — and while managers, she felt, did little to meet the needs of existing tenants. Yet there is little recourse, should she seek to move again. “One of the things I think about — with all of this price-fixing going on, in Boston, the smaller landlords are also raising their rents that much. There’s nowhere people can go for a reprieve,” she said. (Bozzuto Management Company did not respond to Truthout’s request for comment.)

“I’ve noticed [the impact on my finances],” Bri went on. “I don’t buy much. If I buy anything for fun, I notice it. I already don’t make enough to live in Boston. And I don’t think anybody else does. [Laughs.] My husband is unemployed, and it’s hard. We have this $300 rent increase in the middle of the year.” Bri does not, she said, see a commensurate increase in conditions or service that would justify an increase.

“[Over time, in Boston] quality of life has declined, not increased. [Charging more] doesn’t make any sense. At some point I decided, yeah, this has to be because of some algorithm.” When her husband went to the building managers to ask if they could maintain the same rent as their first unit, Bri said, he received stony indifference in return. “They don’t care, because they can always get someone else to take the apartment.”

Bri’s story is only one of millions, of course. At scale, RealPage software (formerly YieldStar, and now in its other incarnations) is so widespread that the true difficulties low-income people face from rent hikes are unimaginable in scope. Making housing unaffordable does not only drive hundreds of thousands of people out to suffer in the street. It also makes the everyday struggles of those who do manage to cling to housing that much more punishing.

Housing, a realm of social necessity (alongside others like education and health care), has fallen victim to the profiteers of the neoliberal era, who are so often the victors when terrains of the commons are opened up to predation. Whether or not RealPage persists through its legal challenges, its existence in the first place points to the broader concern: the perverse incentives introduced into structural functions when social necessities are made subject to the prerogatives of capital. Inevitably, the profits are privatized, the costs socialized. In this case, the costs borne by society are a housing crisis and untold everyday sufferings.

Instead of a perennially precarious underclass, in a moral world, adequate shelter would be supplied to all — not as a commodity but as a human right. As Bri said of the treatment she and her fellow tenants received from her property company, “They’re obviously running it like a business. Not like this is a place to live.”

Source: Truth Out

The post Real Estate Software Aided Price-Fixing “Cartel” Among US Property Companies appeared first on Amora Escapes.

The post US office loan pain is only starting to ramp up appeared first on Amora Escapes.

The post China Must Rethink Its Reliance on Property Sales to See Real Growth appeared first on Amora Escapes.

Thailand’s political deadlock is turning potential homebuyers cautious in Southeast Asia’s second-largest economy, posing risks to the property market as some 50,000 flats are likely to be launched this year, analysts say.

“The market is currently slow but quite stable in terms of supply and demand as local buyers are now adopting a more wait-and-see attitude, rather than making a decision,” said Wittaya Dave Apirakviriya, general manager of ThinkOfLiving.com and DDproperty, a unit of proptech group PropertyGuru.

“This is due to the current political situation as we are still in the process of forming a new government.”

Thailand’s political situation is in a bit of flux as Pita Limjaroenrat, the leader of the Move Forward Party that won the most seats in the May election, has been thwarted twice in his attempt to form a government by conservative members of the senate, most of whom have been appointed by the military junta. In another setback, the Constitutional Court has decided to proceed with two cases against Pita for allegedly violating election rules.

Supporters of the Move Forward Party hold a portrait of party leader Pita Limjaroenrat during a protest in Bangkok on July 29, 2023. Photo: AP Photo

To break the deadlock, Move Forward said it would give way to coalition partner Pheu Thai to try and form the government instead. It remains to be seen, however, if the less liberal Pheu Thai will be able to convince members of the senate and assume power after parliament cancelled plans to elect a prime minister on Friday and said a new date would be set.

The political impasse is impacting the property market as real estate stakeholders expect the new government to implement measures to boost the market, Wittaya said. The previous government cut fees for registering mortgages and transferring ownership from this year until the end of 2025. Extending these measures would help the property market, he added.

Pita’s PM bid is over, says Thai deputy speaker, as the country braces for more turmoil

Real estate stakeholders would like the government to further ease foreign property ownership laws, including allowing foreigners to own landed homes but limiting it to 20 per cent outside Bangkok or luxury villas in beach towns, where the market caters mostly to overseas buyers, according to Peerapong Jaroon-ek, founder and CEO of Origin Property.

Before the pandemic, foreigners accounted for a quarter of all property sales in Thailand, with Hong Kong-based buyers contributing to as much as a third of all purchases from 2018 to 2022, according to official data.

“Currently we see an unclear picture of the political situation, including stimulus measures for the property market and other economic activities, but we believe that we will have a more thorough outlook and understanding after we have a clear political picture and what’s driving the country’s economy,” ThinkOfLiving.com’s Wittaya said.

Real estate is a major driver of the Thai economy, accounting for about 10 per cent of the gross domestic product in 2022, according to a study in May by the Bank of Ayudhya, Thailand’s fifth largest bank.

Before the coronavirus pandemic, developers enjoyed a mini boom due to demand from foreign buyers. But when travel was disrupted in 2020 because of the pandemic, cutting off a vital source of buyers, developers began offering huge discounts and threw in freebies such as cars, hotel and restaurant vouchers and even transfer fees to drum up sales.

The current political uncertainty is likely to further weigh on the property market, as some 50,000 flats are likely to be launched this year in Thailand, slightly more than the 48,700 units last year, according to CBRE.

Thai developers are also likely to launch 35,000 landed units this year, nearly the same as the 34,364 launched in 2022. Developers are also forecast to offer 1,200 luxury and super luxury homes, nearly the same as the 1,218 units in 2022, CBRE added.

The political uncertainty will only have a short-term impact on the property market and investor sentiment, said Artitaya Kasemlawan, head of residential sales project at CBRE Thailand.

Real estate stakeholders would like the Thai government to further ease foreign property ownership laws, including allowing foreigners to own landed homes, an analyst said. Photo: Shutterstock

“The current deadlock will have minimal impact as it has little effect on day-to-day business or cause changes in real estate policy,” Artitaya said. “Any impact on Thai real estate is usually a result of what’s happening in the economy rather than in politics.”

Apart from the political drama, there are several reasons for local and foreign buyers to consider investing in Thailand, according to Kashif Ansari, co-founder and group CEO of Juwai IQI.

For example, average rental yields range between 4.3 per cent and 6.7 per cent in Bangkok, Pattaya and Phuket, he said. This compares with Hong Kong’s net annual return yield of less than 2 per cent.

“Developers have reduced the supply of new units in each of the past four quarters,” Ansari said. “The share of new listings sold in each quarter has nearly doubled to more than 40 per cent as a result. Prices are climbing slowly.”

The Thai property market remains fundamentally sound despite the current political challenges as the country continues to provide a safe and stable environment for foreign residents and investment, Ansari added.

“If you’re investing in Thailand, then the current situation is not a deal-breaker.”

Source : SCMP

The post Pita, Politics and Policies: How the Current Political Impasse is Impacting Thailand’s Property Market appeared first on Amora Escapes.

The largest proportion of global wealth is held in the residential property market, and it’s been outperforming almost every other asset class.

Any budding investor weighing up their options may consider putting their money into bonds, funds, stocks, gold or even cryptocurrency, among other things, but it is the real estate market that not only has the highest level of investment globally, but has soared in value in the past three years.

The latest research published by Savills shows that the world’s property market was worth a huge £379.7trn as of the end of 2022, with more than three quarters of this to be found in residential property specifically. The sector alone was worth £287.6trn globally by the end of last year.

Further to this, the residential property sector saw a huge 21.1% leap in its value in the three-year period between 2019 and 2022, faring well through various factors that created market turbulence elsewhere, such as the Covid pandemic.

The only asset class to perform more strongly during the three-year time period was gold, which saw its value grow by 26.9%. However, as Savills points out: “The total value of gold is still dwarfed by the value of the real estate markets worldwide.”

Outperforming bonds and equities

Residential property across the globe “significantly” outperformed both bonds and equities over the last three years. Over the past year, the global value of equities has fallen by 20.3%, followed by agricultural land by 11.4% and debt securities by 3.2%.

Across the whole of the real estate sector – including both commercial and residential property – there has been an 18.7% hike in value over the past three years. Commercial real estate was slower to climb, though, with a 14.4% rise in value.

The most valuable real estate market, says Savills, remains China, as it makes up more than a quarter (26%) of the world’s total real estate value. Of course, it is also one of the most highly populated countries in the world, with 1.4 billion people and a vast amount of land space.

The US was the country with the second highest value real estate market, accounting for 19% of the total; but again, it is a large and highly populated country. After this, Japan came in third position, followed by Germany and then the UK.

Savills explains the balance: “Significant real estate wealth is concentrated in Europe and North America. The value of property in these two regions accounts for almost half (47%) of the total value worldwide, despite them being home to just 17% of the global population.

“Asia-Pacific (excluding China), by contrast, has 37% of the world’s population but accounts for only 17% of global real estate value.”

UK residential property hit £8.68trn in 2022

As of the end of 2022, Savills estimates that the total value of UK residential property was a record-high £8.68trn, having grown by 5.1% since the previous year. This comes off the back of accelerated house price growth over the past three years.

Lucian Cook, head of research at Savills, said: “The total value of all housing has risen by almost a quarter (+23%) since 2019, while outstanding mortgage debt went up by a lower +11%. So, while outstanding borrowing increased by £168bn, the growth in the total equity pot was well over nine times that figure at £1.46trn.”

The residential property market in the UK remains an extremely popular asset class among investors. It has continued to perform strongly throughout the past few years, in spite of some major shifts within the economy, and appetite remains strong despite rising mortgage rates.

Estate agency Hamptons recently released a forecast indicating that the market will return to growth from 2025, in what it deems to be the start of a new “property market cycle”, so the total value of UK residential property looks set to continue to climb.

Source : BuyAssociation

The post Residential Property Remains the World’s Most Valuable Asset appeared first on Amora Escapes.

The post Property Tax Not on Horizon, but Speculation Unlikely appeared first on Amora Escapes.

Beltone Financial Holding, a large Cairo-listed investment company, announced that its wholly-owned subsidiary Beltone Real Estate Finance has obtained a license to practice real estate financing activity from the Egyptian Financial Regulatory Authority (FRA), according to the company’s statement on Sunday.

With this new license, Beltone aims to distinguish itself by offering unique solutions that make it the preferred choice for individuals and businesses seeking real estate finance.

“Beltone is keen to meet the growing demand for real estate financing from individuals and companies in Egypt,” Hassan Abdel-Nabi, the CEO of Beltone Real Estate Finance, said.

He expressed the company’s commitment to building long-term relationships and fulfilling customers’ needs at every stage of their financing journey.

The timing of this announcement could not be more opportune, as Egypt’s real estate sector is currently experiencing high demand. Investors are increasingly looking forward to allocating their savings to safe assets, with real estate being the most prominent choice.

Recognizing the significance of the real estate sector, the Egyptian government has taken steps to organize and enhance it. In August, the cabinet approved a draft law that aims to establish a national electronic database for real estate.

This database will simplify the registration of old properties, which is crucial given the presence of millions of unregistered old buildings throughout the country.

Egypt is boasting one of the largest real estate sectors in the Middle East and North Africa (MENA) region. In the first half of 2023, the country ranked second in terms of the value of ongoing real estate projects, totaling $500 billion, according to a report by global property intelligence firm JLL.

The report also highlighted that $771 million worth of residential real estate projects were launched in Egypt during the same period.

Private developers play a significant role in driving real estate projects in Egypt, as the country seeks to foster greater private sector participation in the economy.

Currently, the Egyptian private real estate sector is responsible for developing $180 billion worth of real estate projects. This accounts for 66 percent of total investments in the sector and 85 percent of all ongoing real estate projects in the country, as revealed by a report from Property Finder.

The positive growth trend in the Egyptian real estate market is evident, with some companies reporting in September a remarkable 100 percent increase in real estate sales value during the first half of 2023 compared to the same period in 2022.

With the sector witnessing high demand and the government taking measures to enhance its organization, Beltone aims to provide tailored solutions and establish enduring relationships with its customers as they navigate their real estate financing journey.

Source : AfricanMarkets

The post Egypt’s Beltone Obtains Real Estate Financing License appeared first on Amora Escapes.

“When juxtaposed with property deals in Dubai Hills, Jumeirah Golf Estates or Emirates Hills, Al Barari stands out as a compelling choice, offering prices per square foot that typically sit 20 to 30% lower,” it said, adding that despite notable transactions, the area – billed as a preferred destination for billionaires – remains undervalued in comparison to other residential areas in Dubai.

“The ongoing developments and the forthcoming construction of mansion plots and custom mansions will be key drivers of Al Barari’s continued expansion, Ryan Almond and Ellie Street, Senior Property Consultants & Al Barari Specialists at Maria Morris Real Estate, said.

“With a multitude of luxury villas set to be completed from now until the end of the year and into Q1 2024, buyers are discovering exceptional value for money in Al Barari’s community, where purchasers are also lured in by the idyllic family community, lush greenery and lakes, setting it apart from other hotspot areas in Dubai,” they said.

Increase in capital value

According to the report, Al Barari has experienced a significant 111% price increase since January 2022. This growth has brought Al Barari in line with Dubai’s well-established prime areas, which have also witnessed a capital value increase of 125 percent over the same period.

The brokerage firm said the Al Barari market is currently experiencing increased enquiries from both investors and end-users as it offers a wide variety of property types.

“The area caters to different preferences and needs – whether someone is looking for apartments, penthouses, duplexes, modern contemporary or traditional style villas,” the report said.

Maria Morris Real Estate said it had an extremely impressive 2023 so far, with some highlight transactions in Al Barari, including the sale of 2 luxury villas for AED42 million – reportedly the joint second highest transactions ever in Al Barari, according to Dubai Land Department.

The firm also said it represented 71% of the apartments sold in Al Barari’s popular Seventh Heaven sub-community so far this year.

“These two AED42 million villa transactions in the community also re-affirms the fact that ultra-premium, luxury properties remain the most in demand commodity in the Dubai real estate market amongst local and global buyers, compared with other key global property hotspots such as London, Singapore, Miami and Tokyo,” it said.

Source : ConstructionWeek

The post Dubai: Properties in Al Barari See 111% Price Increase Since 2022 appeared first on Amora Escapes.

Spillover?

The post China’s Big Property Market Problem Will Take at Least 4 to 6 Years to Resolve appeared first on Amora Escapes.

The post Property Woes Loom Large Over China’s 2024 Outlook: Economist appeared first on Amora Escapes.