A report from the South China Morning Post. “Some heavily indebted mainland Chinese owners have been forced to sell their luxury apartments in Hong Kong at huge losses or discounts, as the economic slump at home takes a toll. At least 10 transactions – nine residential properties and one parking space – have incurred big losses, of up to HK$8.2 million (US$1.06 million), or been sold with steep discounts since the second half of July, according to agents.”
“‘The economies in both mainland China and Hong Kong are so-so during the pandemic, causing some mainland buyers to sell their properties at lower prices and losses, because they need cash,’ said Derek Chan, head of research at Ricacorp Properties.”
“Earlier this month, a third-floor unit at Fleur Pavilia in North Point was sold by creditors for HK$21.6 million, just three quarters of the HK$28.61 million that was paid less than three years ago. The mainland Chinese owner had been forced to abandon the luxury apartment when he failed to repay the mortgage, according to media reports.”
The Times of India. “At present, around 60% of the 3,000 villas between Neelankarai and Uthandi on ECR are vacant. Mohan Kartha, a real estate agent who has been dealing with expat rentals for a decade, said the villas market now become a tenant’s market. ‘There was a time when the landlord used to have three prospective clients from different MNCs and selected the best. Now, they are ready to revise their rent even by 50%, but cannot find expats.’”
The Guardian Nigeria. “These are trying times for property owners in highbrow areas as the exit of expatriates is forcing them to reduce rents. The reality of the moment has continued to dawn by the day in the nation’s real estate sector, mostly in luxury segment of the property market. It is worsened by depressed economic sentiment, and the excess supply of these properties – which is outstripping demand.”
“Nigerian Institution of Estate Surveyors and Valuers (NIESV), Sam Eboigbe said that if the pandemic lingers, most of the properties vacated by the evacuated expatriates will ultimately have their running tenancies and leases attain expiration and the sector will be negatively imparted with colossal loss of income. According to the Chairman, Royal Institution of Chartered Surveyors (RICS) Nigeria Group, Mr. Gbenga Ismail, ‘the absence of expatriates has caused a glut in the higher end rental market. Effectively, the rents have dropped at least by 50 per cent in Ikoyi particularly.’”
From Gulf News on Dubai. “Service charges on freehold property in Dubai will need to start dropping if new investors are to feel comfortable with buying again. More so as rental income has dropped by 30-40 per cent in the last 24 months, according to Rizwan Sajan, Chairman of Danube Group. ‘If rents have dropped to this extent, there’s no way property investors will want to keep paying high service charges like they do now,’ said Sajan. ‘Those service charges made sense when rental income was high… not now.’”
The Baltic Times. “The number of apartments in the Tallinn rental market this summer is higher than ever before, granting tenants a clear advantage, according to Karin Noppel-Kokerov, manager of real estate portal City24.ee. ‘Growth in the number of rental ads was already observed in spring, but no one could predict at the time we’d reach such figures,’ Noppel-Kokerov said.”
“Changes in the rental market are also indicated by ads increasingly being tagged as ‘without commission,’ ‘commission down 50 percent,’ or ‘first month free.’ ‘Rental apartment owners have understood that times have changed and conditions must be rendered more flexible and prices lowered for the purpose of finding tenants and maintaining profitability,’ Noppel-Kokerov said. The average offer prices of Tallinn rental apartments were 17 percent lower in July compared with the same month last year.”
From Expats on the Czech Republic. “More flats are available for long-term rental on the Prague market, and rents are dropping due to the effects of coronavirus, which has limited tourists who would have used short-term rentals. The number of available flats for long-term rental in Prague at the end of the second quarter of 2020 increased by 97.7 percent year-on-year to 14,738, compared to 7,453 in Q2 2019. This is the most flats available in the last four years. Compared to the previous year, rents fell in all parts of Prague, although in Prague 5 and Prague 9 the situation could be described as closer to stagnation.”
“‘We are seeing more significant changes in the metropolis in the rental housing market, where supply has doubled year-on-year —mostly at the expense of apartments that were originally intended for short-term rental. The growing supply of rental apartments also affects their prices. These have been gradually declining since the end of last year,’ Trigema board chairman Marcel Soural said.”
The Property Industry Eye on the UK. “Increasing numbers of landlords have had to shift from short to long-term lets due to lockdown. Analysis by Hamptons International found the reduced number of tourists and corporate relocations in Great Britain during the pandemic has caused landlords to look for tenants in the long-term rental market. This trend has mainly been concentrated around inner London, the agent said.”
“More than a third (37%) of homes in London which had previously been advertised on a short let basis are now being offered for long- term occupation, according to the research. However, landlords switching from a short to a long-term let are also having to take a reduction in rent. On average the change means a 35% cut in rental income, equating to £1,952 a month less, Hamptons International said.”
From Now Toronto in Canada. “Toronto rent is way down in the downtown area, according to a July 2020 report from Rentals.ca. The average price for condominium apartments in the M5H area listed on the site is $2,444. That’s down 22.2 per cent year-over year. The M5H area, which includes the financial district, suffered the steepest price decline, followed by the south core M5E area, which dropped 16.8 per cent. The M5A area, stretching from St. Lawrence Market to Regent Park, dropped 12.8 per cent. The M5V area, including the fashion and entertainment district, dropped 11 per cent.”
“According to Rentals.ca, downtown condo rents peaked at $2,740 in August 2019. The current average fell 16 per cent to $2,302. According to the Toronto Regional Real Estate Board, rental listings during the COVID-19 pandemic were up 42 per cent year-over-year. Meanwhile, rentals were down 24.8 per cent.”
The Australian Financial Review. “One in seven Sydney vendors slashed their asking prices in July, three times more than last year, as the decline in home values accelerated in the past three months, data from Domain shows. Across Sydney, 14.7 per cent of sellers have cut their prices, a figure slightly lower than the 15.2 per cent recorded in June, but still the highest proportion of reduced price listings in the country. A year ago, just 5.1 per cent of Sydney vendors were discounting their asking prices.”
“Vendors have slashed their asking prices by 4.3 per cent on average, roughly in line with the amount recorded in July last year. In Melbourne, more than one in 10 (11.5 per cent) vendors reduced their selling prices – almost four times the discount rate in 2019 and the second-largest proportion of vendor discounting nationally. Sellers had reduced their selling prices by an average of 4 per cent.”
“Domain senior research analyst Nicola Powell said the high proportion of vendors dropping their selling prices suggested the housing market would weaken further. ‘It’s correlated to price growth, so in a weaker market, you get a higher level of discounted listings and in a strong market, fewer vendors would cut their prices,’ Dr Powell said. ‘At the moment, vendors feel compelled to revise down their asking prices, which means that values are likely to continue to fall each month because we’re still seeing a portion of vendors having to lower their asking prices.’”