Real Estate

UK houses look expensive, like German bonds

14 Jun 2013

The British house price recovery will keep on for now, as the economy picks up. But even as it begins, homes are unaffordable. Prices have been propped up by ultra-loose money, rather like UK and German bonds. That creates the risk of a painful fall when interest rates rise.

U.S. mortgage plan may offer best of bad options

13 Jun 2013

A bipartisan Senate proposal finally phases out Fannie and Freddie, but only tweaks the flawed government-backed home finance system. It may even hand a few hedge funds a profit. Sadly, more radical options have faded with time. It’s now about what’s politically possible.

Foxtons IPO: Must be seen!

7 Jun 2013

New to the market, the property boasts an extensively refurbished capital structure. Potential to expand. Period features lovingly preserved from last boom, such as pushy salesmen in branded Minis. Comes with outside structural support. Would suit experienced property investor.

GM Building’s $3.4 bln price tag is sign of times

3 Jun 2013

A 40 pct stake in the Apple Store-tenanted Manhattan landmark has set a new record, with a value a fifth above a 2008 transaction. A Chinese property billionaire and Brazilian bankers are the buyers. But the building has a cursed history – not just for the carmaker that built it.

Property investors take pitiful governance cake

21 May 2013

Shareholders ousted directors at two U.S. real estate investment trusts managed by the same family company, only to have the boards reappoint them. It’s just the latest example of the wretched practices plaguing a sector that deserves the same activist treatment as the oil patch.

U.S. housing is both cheap and out of reach

13 May 2013

It’s one of the few assets that look undervalued as stock and bond prices go through the roof. That’s ironic, considering the Fed’s bond-buying policy was designed in part to prop up housing. But tight lending standards make it hard to take advantage of the opportunity.

Fannie/Freddie buyout plan needs killing off

1 May 2013

A few big hedgies, including Paulson & Co and a Carlyle fund, want Uncle Sam to sell Fannie Mae and Freddie Mac into private hands. Getting the bailout twins off the government’s books is appealing. But the plan would privatize short-term gains and leave taxpayers on the hook.

Housing watchdog needs new mandate, not new boss

17 Apr 2013

Washington is abuzz with names for the top job at Fannie and Freddie’s regulator. But current acting chief Ed DeMarco is doing fine. A fight to replace him would be an odd use of White House political capital. Better to focus on redesigning the flawed U.S. mortgage system.

Fannie’s record profit sets U.S. reform back further

2 Apr 2013

The failed housing agency earned $17.2 bln in its latest fiscal year, two-thirds of which it handed to the federal government. A recovering housing market should keep Fannie profitable for some time. That’s good for Uncle Sam’s finances but terrible for fixing a broken system.

New UK mortgage help misses lesson of U.S. debacle

21 Mar 2013

British Chancellor George Osborne hopes to boost housing by guaranteeing home loans. It sounds like the beginnings of an approach that saddled taxpayers across the Atlantic with huge losses at Fannie Mae and Freddie Mac. Letting a Limey Muck take root would only build trouble.

Hostile $5.7 bln real estate bid is a long shot

20 Mar 2013

American Realty’s offer for Cole Credit III is a better deal than the target’s plan to buy its adviser and go public. But Cole’s investors don’t get a vote. So American Realty’s only leverage is to dangle the prospect of reputational damage to appeal to insiders’ long-term greed.

Hong Kong experiments with new bubble-busting tool

14 Mar 2013

Two big banks raised mortgage rates after Hong Kong’s Monetary Authority hiked capital requirements for property loans. It’s the first time the activist watchdog has publicly tweaked lenders’ risk models. For western regulators seeking similar powers, it’s an important test case.

Stock sales make IPO rebound more than a pipedream

12 Mar 2013

Two 500 mln pound UK deals in 24 hours have given equity bankers something to cheer. Markets may be hungry, but the placings in landlord British Land and wealth manager St. James’s Place are chunky nonetheless. That augurs well for a rebound in the new-issues market this year.

UK would gain from homeowner tax switch

8 Mar 2013

Homeowners are a tempting target for cash-strapped UK tax collectors. One option is to levy “mansion taxes”; another is to milk existing stamp duties. It would be better to forget the first, scrap the second and close the capital gains tax loophole on residential property.

U.S. housing reform takes baby step uphill

5 Mar 2013

A much-needed overhaul of mortgage giants Fannie Mae and Freddie Mac is proving to be a Sisyphean task. Regulator Edward DeMarco keeps pushing, though, and is set to streamline their duplicative securitization businesses. It’s time for lawmakers to get things seriously rolling.

Negative intellectual equity traps mortgage reform

26 Feb 2013

The latest plan to shake up U.S. housing finance, from a bipartisan think tank, offers nothing new. It rests on the usual received wisdom that the market cannot exist without a government backstop. The idea’s prevalent among lawmakers, bankers and investors. It’s wrongheaded.

U.S. housing quagmire embodied in JPMorgan deal

22 Feb 2013

The bank looks set to sell its first mortgage bond without government backing in years. That hints at a belief in such products among both lenders and investors. But until mortgage finance rules are clarified and Frannie’s funding advantage is withdrawn, these deals will be rare.

Dubai’s new boom assumes short memories

18 Feb 2013

The world’s biggest Ferris wheel and a replica Taj Mahal are among the extravagant new mega-projects planned in the emirate. Dubai’s strategy isn’t quite a repeat of the expansion that crippled it in 2009. But funding will be hard while an existing debt restructuring looms large.

Swiss first to test-drive mortgage capital buffer

14 Feb 2013

Switzerland has ordered its banks to hold more capital against mortgage loans, in order to limit the surge of property prices. If it works, the UK and others might be emboldened to follow suit. But the opposition of some Swiss stakeholders could also make them steer clear.

Congress veers off course on housing reform

11 Feb 2013

Republicans are taking aim at the FHA. That has merit as the agency may need a $16 bln bailout. But fixating on it, as GOP lawmakers seem to be while Democrats get defensive, risks stalling the more necessary overhaul of Fannie and Freddie. A broader approach would fix all three.