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 Many regulations are outdated for the likes of Airbnb and Uber, but a more cooperative attitude would help their cause.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.
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.