China deflates a bubble – but the wrong one 28 Aug 2009 The 23% fall in stocks over the past month doesn t mean a return to normality. While valuations now look almost sane, share prices have a limited effect on China s economy. The real worry is real estate, a bubble that's bigger, harder to spot, and devilishly tricky to shrink.
US home price increases may not stick 25 Aug 2009 For the first time in three years, values rose in most major American cities. This good news might be fleeting. An $8,000 government credit has goosed demand, and a large shadow inventory of houses may be sitting on the sidelines.
A first step for Fannie and Freddie 17 Aug 2009 As the anniversary of their conservatorship approaches, the $5.4 trillion mortgage giants remain the biggest black holes in the financial firmament. Robert Cyran says there s an easy and fairly painless first step the US could take to begin their reform.
British Land shares price in too much hope 17 Aug 2009 The UK commercial property group is flying high on speculation of a bid or a partial sale of its prized London office complex to US buyout firm Blackstone. Its Q1 results may mark the trough. But corporate activity is no certainty and the shares look overpriced.
UK house-price bulls should keep champagne on ice 7 Aug 2009 The end of a buyers strike has pushed the average price up slightly. The good news could continue for a few months. But the recovery relies on extraordinary and temporary banking conditions. The most likely outcome remains flat prices with substantial downside risk.
Trump resurrection no bellwether for buyouts 4 Aug 2009 The Donald convinced a bank to bail out his Atlantic City casinos again. But that doesn t necessarily mean financing will start to flow for private equity restructurings, too. And buyout firms are less likely to invest the effort to resuscitate their cratered companies.
Schaeffler alienates as it takes power at Conti 31 Jul 2009 Usually majority shareholders get their way without too much complaint. But Schaeffler s decision to oust the top man at Continental was delayed by board resistance. The fight between the two overindebted German car part makers is making it harder to find a durable solution.
Risanamento can’t blame market for E2.8bn problem 28 Jul 2009 The Italian developer is set to refinance that much debt to avoid becoming the crisis s biggest Italian casualty. A nearly20% decline in property sales has hurt, but an Italian fondness for cosy relations between banks and entrepreneurs probably let it take too many risks.
US housing rebounds, but won’t lead recovery 27 Jul 2009 New home sales, existing home sales and housing starts all rose in June. But housing starts are still far below previous cyclical lows, and sales levels are boosted by fiscal and monetary subsidies. These seem to have brought a bottom, but won t end housing s bear market.
BoE faces QE dilemma 23 Jul 2009 One member of the monetary policy committee has been criticised for suggesting the programme of printing new money may be put on hold. That won t help the government sell gilts but that s hardly the BoE s job. As for QE itself, it doesn t seem to be working.
UK’s CMBS market on shaky ground 30 Jun 2009 Despite a 43% slump in commercial realestate prices since mid2007, asset valuations underpinning much of the UK s £42bn of commercial mortgage securities are flat or up. But many are out of date. Some investors are in for a nasty surprise when the numbers are updated.
Even Lehman stigma can’t stop banker’s rebirth 17 Jun 2009 Mark Walsh, the architect of a real estate deal that helped sink Lehman, has a new gig: sorting out Lehman's property portfolio. It's a striking example of Wall Street's short memory. But former poachers can make good gamekeepers, and the logic holds for Walsh as well.
UK property vultures could be circling a while 16 Jun 2009 As borrowers default, the balance sheets of RBS and Lloyds are filling up with unwanted property assets. Equityrich buyout firms like Blackstone would normally be looking to buy. But postbailout, these banks don t have to sell. That will force vultures to swoop elsewhere.
Paulson’s contrarian real estate bet looks smart 10 Jun 2009 The man who made his name betting on the subprime mortgage bust has turned his eye to commercial real estate with a $100m investment in broker CBRE. That seems gutsy prices are tanking. But Paulson may not need a rebound. Indeed, he has already made $24m on the deal.
No need to rush back onto London housing ladder 5 Jun 2009 After falling 24%, the central London housing market has picked up. Supply has increased. Affluent buyers with fat deposits are exploiting supercheap mortgages. There is anecdotal evidence of sealed bids and gazumping. But a sustained period of growth looks unlikely.
UK housing recovery is wishful thinking 1 Jun 2009 Several indices suggest house prices are stabilising. But the signs aren t strong enough to call the bottom of the slump with certainty. That would require a turn in the labour market and improved mortgage financing for firsttime buyers. Both look some way off.
US homeowners may be poorer than they feel 28 May 2009 The 19% drop in US house prices in the past year looks less dire than the S&P 500 s 40% plunge. But adjusted for leverage, homeowners may have lost more than they think. Throw in price opacity and lack of liquidity in housing, and stocks may provide better shelter.
Rising yields could hurt housing and delay upturn 27 May 2009 The rate at which US home prices are dropping has slowed. But rising interest rates could damp buyers enthusiasm, delaying or even deepening the market bottom. With economic recovery depending on the stabilization of the housing market, that could prolong the recession.
Ex-mortgage salesman tries rebirth as savvy buyer 26 May 2009 Stanford Kurland made a mint as the number two at lender Countrywide. Now he s looking for $750m to bankroll picking over the wreckage of the mortgage market. Sure, he should be equipped to find bargains for investors. But he and his colleagues will make the more certain return.
UK commercial property slump yet to hit bottom 21 May 2009 The battered realestate market has already fallen over 40% since its peak. But rents are still sliding, and problems refinancing £40bn of debt due this year could spark forced sales. Peaktotrough values could be more than 50%.