Real Estate

Spanish bank take-under reveals real estate mess

27 Mar 2012

Caixabank is buying smaller rival Banca Civica and its dud property loans at a discount to market value. Caixa reaps savings from cutting costs, including its own network, and avoids being pushed into a deal with larger Bankia. Without state support, though, it’s still a risk.

Farmland promises real investment harvest

21 Mar 2012

The hunt is on, among fearful long-term investors, for inflation protection. History suggests that agricultural land could provide part of the answer. But ownership brings responsibilities, costs, and risks that need close management.

U.S. housing hangover finally wearing off

19 Mar 2012

Six years into the downturn, the overhang of housing inventory no longer looks so overwhelming. Population growth and reduced construction continue to cut the glut of buildings. Throw in rising employment and improved affordability, and at last a rebound is in sight.

Abu Dhabi tries merger to end property mess

12 Mar 2012

The emirate wants to marry its top-two listed developers in a bid to end the misery at Aldar, which has already sucked up $10 bln in bailout funds. But Abu Dhabi will have to work hard to protect prospective partner Sorouh’s independent majority shareholders.

Just let housing regulator DeMarco do his job

8 Mar 2012

The knives are out for Frannie’s overseer for not cutting principal on underwater home loans backed by the agencies. Borrowers would hail him a hero if he changed his mind. But he has a broader duty to taxpayers. His stance as a clear-eyed regulator deserves praise, not punishment.

Dutch houses are another euro zone drag

2 Mar 2012

Which country outside the euro zone periphery is in recession? It’s the Netherlands. A house price bubble is deflating. Tax deductibility for mortgages needs to go, but that’s another concern for consumers. The Dutch burst bubble is a troubling drag on euro zone growth.

Citi, BofA prove too big to punish harshly

17 Feb 2012

The banks will pay fines - $158 mln and $1 bln respectively - to settle claims they defrauded Uncle Sam through mortgage insurance. Citi even admitted it. Its awful quality control lapses make a ban on government business seem in order. But Washington needs big banks too much.

Five phases of China hard-landing denial

17 Feb 2012

China watchers have yet to face up to the country’s real estate problems. While politicians fret about too-expensive houses, economists still think 2012’s GDP will grow 8.3 percent. Faith in China’s ability to avert a property-led credit crisis rests on shaky assumptions.

House prices look to have bottomed in UK

15 Feb 2012

British mortgage lending is still below 2001 levels, but no longer shrinking. Very low mortgage rates are making homes affordable for those with access to credit. The economy looks to be stabilising, though City cuts may affect London homes. The euro zone crisis is the biggest wild card.

London real estate coming off steroids

13 Feb 2012

Lay-offs and bonus cuts in the capital’s financial sector are starting to skim the froth off rents. That would normally be a negative for bubbly house prices. But much depends on whether it dents London property’s status as a safe-haven investment for the global super-rich.

Biggest winner in $25 bln mortgage deal is Obama

9 Feb 2012

While the settlement is progress, compared to the $700 bln U.S. homeowners are under water, it’s a mathematical drop in the bucket. And banks still look vulnerable to future mortgage-related lawsuits. The president at least gets bragging rights for getting a gnarly deal done.

Renters need to flex muscle in U.S. housing debate

8 Feb 2012

Though America’s mortgage system subsidizes homebuyers, its dysfunction has cost all taxpayers dearly. Few groups are pushing for change. But the nation’s 39 mln renters - often an afterthought in the discussion - ought to be up in arms. They might find unlikely allies, too.

U.S. tinkers around edges of housing market

6 Feb 2012

The White House wants to breathe life into a depressed U.S. housing market. Its latest flurry of initiatives is as dizzying as the whirlwind of programs launched three years ago. The trouble is, housing policy isn’t easy - and President Barack Obama’s plans won’t make much difference.

Gingrich makes Goldman 4-letter word – to no avail

31 Jan 2012

The former House speaker is set to lose Florida despite labeling rival Mitt Romney an agent of the Wall Street firm. But Romney’s similar conflation of Gingrich’s work with Freddie Mac to the housing bust seems to have hit further home. It’s a small victory for Goldman’s image.

Revamped U.S. mortgage plan too little, too late

30 Jan 2012

The Obama administration is using the last $21 bln rattling around from TARP to cajole investors to cut struggling homeowner loans. Some may bite. But the new program won’t help enough borrowers to put housing back on track and may not entice Fannie and Freddie to participate.

Even unity can’t solve U.S. foreclosure problem

25 Jan 2012

Banks, as well as Fannie, Freddie and FHA, want to unload an expected 3.2 mln repossessed homes. Investors want to buy them and the regulator wants to help. Despite this rare general accord between Washington and Wall Street, financing and competition are proving tough obstacles.

China urbanises in its own not-so-great way

19 Jan 2012

Over half the Middle Kingdom’s population now lives in cities, up from a quarter in 1990. It’s the way of the world, and basically welcome. China’s tight state control and rapid growth have made the transition less chaotic than in many countries, but no more just or liberating.

SEC’s GSE charges underline need for revamp

16 Dec 2011

The U.S. watchdog has charged six ex-executives of Fannie Mae and Freddie Mac, the biggest bailout recipients, over subprime loans. It’s about time. Wherever the charges go, they’re symptomatic of the twisted consequences of the U.S. mortgage lending model. Its reform is overdue.

Big U.S. foreclosure settlement isn’t dead yet

1 Dec 2011

It sounds like the start of a Monty Python riff but also suits the Massachusetts lawsuit against major banks. Though it might seem to end a unified front by the states, it hasn’t really torpedoed their joint efforts. In fact, the suit could breathe new life into negotiations.

UK’s housing plan won’t deliver what’s needed

21 Nov 2011

Building more homes could ease Britain’s housing shortage and create jobs. But the government’s 400 million pound scheme to help housebuilders is modest, while stimulating sales by subsidising some mortgages looks a mistake. The plan is unlikely to make much of an impact.