Real Estate

Easy money undermines Canada’s property prudence

17 Feb 2015

Sound lending and sensible regulation are formidable barriers against a housing crisis. Rising prices and debt weaken defenses. The Bank of Canada warns valuations appear too high – but its most powerful protection against a bubble, interest rates, are moving the wrong way.

Li Ka-shing converts to shareholder value religion

9 Jan 2015

Asia’s richest man is splitting his empire in two: a property company, and everything else. The reshuffle should help shrink the conglomerate discount while allowing Li to leverage up in real estate. It’s an overdue recognition there is value to unlock in the $85 billion empire.

U.S. housing should thrive without Obama’s help

8 Jan 2015

The president plans to cut mortgage costs for risky borrowers. That could help on the margins but won’t change the larger picture. Home ownership among older Americans is at near-record levels, and younger buyers should gain ground soon. The government can safely step aside.

U.S. housing demand is building

26 Dec 2014

The post-crisis rebound boosted home prices 25 pct even as sales and construction lagged. Increasing household formation, job creation and easing credit look set to give the market another leg up, despite rising interest rates and the headwind of sliding affordability.

UK doesn’t look ready for a rate hike

8 Dec 2014

Bank of England research suggests the impact of rate rises on mortgage holders could be manageable. If wages and rates rebound as the BoE forecasts, that might be so. But the data is sufficiently equivocal, and the UK economy sufficiently weak, to make it not worth finding out.  

Canary Wharf bid short on tactics and value

4 Dec 2014

Qatar Investment Authority and Brookfield Property have gone hostile with a raised 2.6 bln stg offer for Songbird, owner of London’s easterly finance district. Bypassing the board is not how to buy key UK infrastructure. And the 34 pct premium ignores the Wharf’s trophy status.

Germany’s $5 bln housing deal looks hard to topple

1 Dec 2014

Residential landlord Deutsche Annington is offering to buy rival Gagfah to create Germany’s largest real estate group and reap sizeable savings. The 18 pct bid premium seems stingy. But the price fairly reflects Gagfah’s fundamentals, and it’s hard to see anyone else paying more.

REIT scandal could be good test for Sarbanes-Oxley

29 Oct 2014

American Realty Capital Properties says its false financials were intentionally left uncorrected. Details are scant, but that sounds tailor-made for the Enron-inspired law. After more than a decade as an afterthought for U.S. prosecutors, the reform may have a chance to shine.

U.S. mortgages sputter on demand more than supply

23 Oct 2014

Plenty of home loans are available, industry data show. But a lukewarm economy has made potential borrowers skittish. With the likes of ex-Fed boss Bernanke complaining about getting turned down, blaming stingy banks is easy. It’s the other side of the equation that needs work.

Foxtons alert points at housing momentum reversal

23 Oct 2014

The London-focused real-estate agent says booming sales volumes have suddenly slowed. That fits with other evidence the market peaked earlier in the year. Foreign buyers may assist a soft landing. But, as Foxtons hints, UK political uncertainty could act as a powerful brake. 

U.S. mortgage watchdog risks subprime repeat

20 Oct 2014

New rules on federal guarantees clarify lending criteria. They also cut required down payments to 3 percent. That invites another wave of underwater borrowers. Sure, home ownership is down from its peak. But focusing on that, rather than prudence, helped inflate the last bubble.

Airbnb and Uber lack full spirit of sharing

17 Oct 2014

Most of the $10 bln home rental service’s New York listings are illegal, a top lawman has found. And Pennsylvania judges put the kibosh on the $18 bln taxi app. Many regulations are outdated for the likes of Airbnb and Uber, but a more cooperative attitude would help their cause.

Real estate rescue may not help China’s developers

16 Oct 2014

Homebuyers will still spend if prices and financing are attractive. But property companies are selling more for less, which beats down their margins. If a pick-up comes at the expense of profitability, things will continue to get worse for Chinese housebuilders.

China’s Agile Property only the worst of the best

13 Oct 2014

The developer needs urgent assistance after its chairman was detained and a rights issue pulled. House prices are slumping. Yet despite these problems, Agile is one of the few property groups with some access to capital markets. The sector’s gravest dangers lie further from view.

China’s real estate trophy hunt has further to run

8 Oct 2014

The $2 bln sale of New York’s Waldorf Astoria hotel to a little-known Chinese insurer echoes Japan’s U.S. property binge in the 1980s. But outbound investment from the People’s Republic is much lower than Japan at its peak. Expect China to add more landmarks to its portfolio.

Bernanke refi fail symptom of wider mortgage mess

3 Oct 2014

The ex-Fed chair blamed bank wariness for his home loan do-over being refused. Lenders are overcoming some of their caution. But without progress on regulatory reform and a willingness to move away from 30-year mortgages, many wannabe homeowners will be locked out of borrowing.

Good Fannie-Freddie verdict bad for housing reform

1 Oct 2014

A federal judge rightly tossed out a shareholder suit to recoup $72 bln of profit from the bailed-out mortgage firms. That means Fannie and Freddie earnings will keep flowing into Uncle Sam’s coffers. For as long as that continues, revamping housing finance looks a non-starter.

China house prices on brink of pessimism spiral

30 Sep 2014

As prices fall in most big cities, developers and banks are trying to lure buyers back to the market. But cheaper mortgages and less red tape are no match for sagging real price expectations. Short of giving cash to buyers, it is hard to arrest negative thinking once it sets in.

Financial fall raises Gherkin’s symbolic status

25 Sep 2014

Receivers are shopping London’s pickle-shaped edifice for $1 bln. Bankruptcy can’t undo its effect on the skyline. Now, though, the glass-sided Gherkin also will reflect back to City bankers and traders an ill-advised currency hedge, a lasting monument to the dangers of avarice.

Ivory tower beats market to U.S. mortgage fix

17 Sep 2014

Academics at the AEI, a free-market think tank, have hit on what may be a simple solution to the nation’s home-loan morass: replace the 30-year mortgage with a 15-year product that quickly gets borrowers’ skin in the game. Even BofA and an affordable housing advocate support it.