A report from the Times of London in the UK. “Almost 1,000 days after the Grenfell Tower fire killed 72 people, the fallout from 20 years of failed building regulations that allowed the disaster to happen is affecting every flat in the UK. It is hitting buildings of all heights, with any type of cladding, or none at all. Now, The Sunday Times estimates that three million private flats in England could be affected, thanks to the latest government safety advice that is leaving owners unable to sell or get a new mortgage — even if their block is low-rise and safe.”
“Ahead of next month’s budget, The Sunday Times has learnt that ministers are considering loans to fix such blocks. ‘But why should I have to take out a loan to pay off something that isn’t my fault?’ asks Rebecca Fairclough, 37, a solicitor who says she faces bankruptcy to fix dangerous insulation at her Manchester flat. ‘I’m not only facing losing my home. Solicitors cannot be bankrupt: it would also mean losing my career.’”
“They have all become prisoners in their own homes. They can’t move jobs. They can’t get married. They are putting off having children. They can’t retire. They are stuck.”
The Edinburgh Evening News. “Experts say an over-supply is already having a ‘negative impact’ on occupancy levels and room rates, even before a string of proposed new developments across the city are either completed or come up for planning permission. The Edinburgh Hotels Association (EHA), which represents more than 50 of the city’s key players, claims some businesses have been left in a ‘fragile’ state due to dwindling business. It says there is ‘no doubt at all’ that the addition of more than 5,000 new rooms over the past 10 years is to blame for a slump which has left hotels unable to fill beds.”
“EHA spokesman Russell Imrie said the industry was experiencing worrying decline across several key indicators, including occupancy rates and the average daily hotel rates as it also struggled with the lack of control over an ‘explosion’ in the number of properties being marketed for short-term lets on sites like Airbnb. Cliff Hague, chair of the Cockburn Association heritage watchdog, said: ‘This news of an oversupply of hotels will be frustrating to the many households trying to find affordable housing in the city, since sites that could have been used for housing were snapped up for hotels.’”
From ABC News in Australia. “The twin disasters of bushfires and coronavirus have devastated Australia’s tourism industry resulting in a massive decline in visitor numbers and booking enquiries. That downturn is causing some Airbnb operators in the Far North Queensland tourist city of Cairns to rethink their future on the platform. Brian Kovacs, who runs an Airbnb hosting service, said this year is looking particularly grim on the booking front.”
“‘This time last year, we were fully booked for February and half of March was booked as well,’ Mr Kovacs said. ‘February 2020, we’ve got 50 per cent vacancies and we’re struggling to secure a booking.’”
“Mr Kovacs’ business partner, real estate principal Billy Gartner said there were other factors at play, in particular, the oversaturation of listings on the gig economy platform. ‘The one-bedroom, the two-bedroom units, rooms in houses, that’s the part of the market that’s really become saturated,’ Mr Gartner said. ‘What was probably getting $95-a-night two years ago is down to $70-75-a-night for the simple reason that [there are] so many mums and dads with one [an investment property]. They’re competing with each other by dropping the prices and that’s affecting the whole market.’”
The Daily Telegraph in Australia. “You can still snap up properties near the beach for ‘first home buyer’ prices — as long as you’re prepared to travel at least an hour north of Sydney. Research from CoreLogic showed the Central Coast was the only major region within the Greater Sydney area where prices are lower than they were last year, with prices in pockets of some beach suburbs down 15 per cent or more.”
“‘It’s definitely a buyer’s market on the Central Coast,’ realestate.com.au chief economist Nerida Conisbee said, adding booming sales conditions in premium Sydney areas were yet to hit the coast.”
“Wamberal, which shares a beach with tourist favourite Terrigal, saw its median apartment price drop 38 per cent to $645,000, sales data from realestate.com.au revealed. Bateau Bay unit prices fell 15 per cent and now average under $450,000. The Entrance North had the biggest drops for detached house prices at 13.4 per cent. Unit prices in Ettalong Beach dropped 22 per cent and that entire area through Ettalong and Umina still has properties for around the $650,000 mark.”
From Newshub on New Zealand. “After years of having a housing shortage, Auckland now technically has a surplus of homes, according to the Salvation Army. In the housing section, the report concluded that based on provisional population estimates from Statistics New Zealand, Auckland’s housing shortage ‘has now, at least statistically, become a housing surplus.’ Based on the data, there were around 7,000 surplus houses in Auckland, the charity concluded.”
The Sunday Guardian on India. “The Central and state governments have been paying much attention to housing for the poor section, but the middle-budget and luxury housing segments are still witnessing a rise in unsold units. Data has revealed that the unsold stock of luxury houses has increased to an average of 10% in the top seven cities of the country. As per property data of 2019, at least 89,200 luxury housing units, priced at Rs 1.5 crore, remained unsold across the top seven cities of the country, while in 2018, there were 81,290 unsold luxury units. The total value of unsold luxury housing stock is approximately Rs 1.59 lakh crore—that is 34% of the total value of the entire unsold housing stock.”
“Anuj Puri, chairman, ANAROCK Property Consultants, said: ‘Snapped up like hotcakes by investors in previous years, luxury housing sales are still in the doldrums and hinging largely on end-user sales. Even after three years of demonetisation, the sale in the housing sector remains poor in the entire housing segment, but the luxury and mid-budget housing segments are facing the worst situation.’”
From Bloomberg on China. “Home sales in China have been dealt a huge blow by the spreading novel coronavirus with figures showing that transactions plunged in the first week of February. New apartment sales dropped 90 per cent from the same period of 2019, according to preliminary data on 36 cities compiled by China Merchants Securities. Sales of existing homes plummeted 91 per cent in eight cities where data is available.”
“‘The sector is bracing for a worse impact than the 2003 SARS pandemic,’ said Bai Yanjun, an analyst at property-consulting firm China Index Holdings. ‘In 2003, the home market was on a cyclical rise. Now, it’s already reeling from an adjustment.’”
“The downturn will challenge those developers with poor liquidity, even if the coronavirus only crimps sales for several months, S&P Global Ratings said in a note last week, without identifying any firms. Many count on steady cash flows from home sales as a liquidity lifeline, S&P said. ‘For developers, the biggest challenge is the stress on short-term cash flow,’ said Mr Bai. ‘It’s manageable so far, but the situation may suddenly worsen.’”
The Hong Kong Standard. “Centaline Property Agency reported seven second-hand deals over the weekend, four more than the previous weekend, as homeowners lowered prices and analysts forecast more price cut amid the coronavirus epidemic. Owners were willing to cut prices under a low-interest environment, after the PBOC had lowered its required reserved ratio in January.”
“In Ma On Shan, a 736-sq-ft flat at Oceanaire Tower fetched for HK$9.48 million, 9 percent lower than asking price in December after a confirmed case of the coronavirus was reported at the estate. In Tseung Kwan O, a 533-sq-ft flat at Ocean Shores sold for HK$7.8 million, or HK$14,634 per sq ft, HK$400,000 less than the asking price, according to Midland Realty. The price was a 6-month low for two-bedroom flat at the development.”
“There have been seven cases of forfeiture of deposit among new projects so far this month. Among them, a buyer of a 497-sq-ft flat at Seaside Sonata forfeited a HK$417,950 deposit or 5 percent of the price after canceling the purchase while a buyer of a 286-sq-ft flat at Victoria Harbour in North Point forfeited a HK$530,000 deposit, or 5 percent of the total price, after canceling the purchase.”
The St Albert Gazette in Canada. “Jennifer Lucas, new chair of the Realtors Association of Edmonton, said last year continued on as a buyer’s market, but as sellers came down in price and more homeowners were able to qualify for a mortgage, inventory has finally started moving. Continued stabilization could depend on the mortgage stress test, she said – a federal policy in place since 2018 aimed at helping homebuyers ensure they can qualify for a mortgage based on income and expenses. The test sets the financial bar higher than the actual mortgage rate, with the goal of saving borrowers from incurring more debt than they can handle if rates rise. It also put downward pressure on pricing in Vancouver and Toronto, Lucas said, but had a ripple effect across the country.”
“‘Equity was essentially stolen from homeowners because sellers had to lower their price to get to a point where home buyers can actually qualify,’ Lucas said. ‘Some of the sellers said, ‘You know what, I bought here, I had this much equity in it, and I can’t lose money,’ so those went off the market.’”