Real Estate

Credit score change tests U.S. bank reform resolve

8 Aug 2014

Revising so-called FICO math mainly reflects political pressure to help more Americans borrow. It’s a bit like the government’s push for home ownership before the 2008 crisis. So far, bank regulators are mostly still leaning the other way. But lenders can also play their part.

Mall rats join up to take on Zara and Amazon

29 Jul 2014

Klepierre is buying Corio, a weaker Dutch rival, for 7.2 bln euros including debt. That’s a reasonable price and will turn the French group into Europe’s biggest dedicated mall owner. With retail giants and e-commerce making life harder for shopping centres, scale matters.

Zillow and Trulia fire up online real estate boom

28 Jul 2014

The two listing services’ $3.5 bln merger won’t produce many cost savings. But the deal promises to reduce competition and squeeze prices higher, creating the potential for even faster growth. With only a tiny slice of the ad market, online real estate may not be tapped out.

London real estate at an inflection point

17 Jul 2014

Property values in the UK capital are up 20 pct in a year. But leading indicators – buyer enquiries, new mortgages and volumes – have stalled. For prices to hold, foreign buyers will have to spend more in spite of a stronger pound and punitive taxation.   

Mortgage curbs alone can’t stop housing booms

26 Jun 2014

The Bank of England is set to use new tools to cap home loans. They can help protect lenders and borrowers from getting into trouble. But global experience shows that restricting credit alone doesn’t bring down property prices. Only new taxes, or more building, will do the trick.    

Edward Hadas: Housing, the ultimate momentum trade

25 Jun 2014

Supply and demand influence house prices. Monetary and lending policies are more important still. But psychology is the biggest factor. What pushes up prices most is the belief that land values can keep rising. What pushes them down is the realisation that this belief is false.

U.S. home affordability on way to lowest in years

18 Jun 2014

With the Fed set to raise rates, house prices rising and incomes not keeping pace, the dream of home ownership – cheaper after the 2008 downturn – is receding again for many. A new Breakingviews calculator shows that by 2017 homebuyers may have to stretch the most in decades.

Blunt instrument is needed for global house bubble

16 Jun 2014

The IMF is worried about the risk of a global house price bubble. Housing markets may be regional, but low supply and excess demand are common worldwide. Macroprudential tools and construction are part of the response. But anything other than an end to cheap money is tinkering.  

Review: "House of Debt" diagnosis beats remedies

13 Jun 2014

Atif Mian and Amir Sufi make a compelling case that excess consumer debt caused the U.S. Great Recession’s severity, but their mortgage bailout proposal would make matters worse. Their shared value mortgages might help, but old-fashioned tight money is a simpler and better way.

Hugo Dixon: Six solutions for the UK housing crisis

9 Jun 2014

Britain’s main economic problem is that the supply of homes isn’t rising nearly as fast as demand. The main solution isn’t to build new homes on greenfield sites. Rather, it is to use existing housing stock much more effectively and build new houses in cities, especially London.

Apartment boom can only take U.S. housing so far

3 Jun 2014

Multi-residence buildings now account for 40 pct of new construction. That may sound promising. But they’re cheaper to erect than standalone homes and are usually rented out. There’s little here for mortgage lenders, most big builders or the economy to get excited about.

UK housing bounce obscures a credit-lite recovery

3 Jun 2014

Fears of a finance-driven binge are misplaced. Mortgage lending is low and the government’s foolish Help to Buy scheme is small. Lending to corporates is falling. The UK has little credit, arguably too much foreign capital, and weak exports. Sustainability is in question.    

Red Lobster sale leaves fishy smell at Darden

16 May 2014

The restaurant conglomerate is selling its floundering seafood chain for $2.1 bln, pre-empting a non-binding vote on the separation forced by activists. Engaging with agitators doesn’t always bring harmony – ask Sotheby’s – but Darden’s siege mentality exposes its board and CEO.

Fannie, Freddie overlord sets back mortgage reform

13 May 2014

New housing finance watchdog Mel Watt is reversing his predecessor’s plans to shrink the U.S. government giants. That means Uncle Sam will probably stay on the hook for 90 pct of new home loans. Profits will remain high as a result, complicating Congress’ efforts for reform.

How China is stoking London’s housing bubble

14 Apr 2014

Chinese buyers are a key new factor pushing up the UK capital’s property prices. As Beijing relaxes capital controls, the wall of money could intensify. UK politicians will need to decide whether to protect London’s global financial status, or the citizens who have to live there.

Global house price surge calls for QE door to shut

31 Mar 2014

It’s too soon to call it a global bubble, but house prices are rising in most countries outside southern Europe. U.S. quantitative easing is a big factor, because capital inflows generated credit growth in emerging economies. Tighter monetary policy, now, is the simplest cure.

Spain’s not-so-bad bank still has much to prove

28 Mar 2014

State-backed entity Sareb, key to the cleanup of the Spanish financial system, has set itself up in record time. It made a small loss in its first year, and 2014 doesn’t look much easier with real estate prices still falling. The bad bank must up its game to make ends meet.

Berlin’s housing boom has lessons for London

25 Mar 2014

The German central bank says Berlin’s property prices have risen 25 pct above fair value. But this mini-bubble is unlikely to expand to London proportions. Lending standards make speculation expensive, building is increasing sharply and the Bundesbank is on the case. 

Fannie investors may be using magic calculators

12 Mar 2014

 The latest plan to wind down the U.S. mortgage giant tanked its volatile stock. Some hedge funds still want to revitalize the business. Trouble is, even kind assumptions suggest Fannie isn’t worth enough for shareholders to get anything back – unless Uncle Sam is crazy generous.

Spanish real estate offers some IPO drought relief

21 Feb 2014

Two property funds are planning Spain’s first IPOs since 2011. Investors would get a direct play on the recovery of the country’s real estate market. But prices keep falling and competition for deals is tough. Much still depends on managers’ ability to spot bargains.