A report from Bloomberg on New York. “Manhattan luxury-home sales had their best week of the year. The second-priciest home to find a buyer was a limestone mansion owned by financier Phil Falcone, at 22 E. 67th St., on the market since March 2018 and most recently listed at $27.5 million. A foreclosure auction had been scheduled for earlier this year after lenders sought to recoup unpaid loans used to renovate the home, purchased by Falcone and his wife in 2004.”
“Rising prices for high-end condos are making some buyers willing to consider a co-op again, even if it means going through an intrusive board interview and living with limitations on how the apartment may be used and purchased, according Donna Olshan, president of Olshan Realty Inc. ‘Some of them have decided to suffer if they can get a big-enough discount,’ she said.”
From Dirt on California. “Despite its choice location on almost two gated acres in a hilly, wooded and wealthy neighborhood above the Annandale Golf Club, despite its baronial opulence and idyllic privacy, despite six months of publicity and a series of heavy-duty price cuts, the longtime home of once vaunted but now disgraced attorney Tom Girardi and reality TV star/pop diva Erika Jayne, a.k.a. The Pretty Mess, has yet to entice a buyer serious enough to sign on the dotted line.”
“In an effort to flush out a buyer, the price for the hilltop estate was slashed again this week, by a whopping $700,000, bringing the ask to $8.2 million, 37% below its initial, pie-in-the-sky price of $13 million.”
The Coeur d’Alene Press in Idaho. “Look at enough homes for sale, and chances are good you’ll come across a few turkeys. This week we’re talking about those trashy houses, and we’re NAMING NAMES! Just kidding. That’d be needlessly mean. We can, however, categorize the various types of turkeys that buyers encounter while hunting for a new home. If you’re thinking about selling your house, definitely make sure you’re not one of these types of bad real estate listings.”
“By far the most common turkey on the real estate market — a home that costs more than it should. You know what the price should be. Your Realtor knows what the price should be. The seller’s Realtor knows what the price should be. But it’s like $50,000 more than that. Get real, average turkey, you’re not 20-30 percent better than the rest of your neighborhood. And don’t give me that corner lot, ‘oversized garage,’ or ‘mostly finished basement’ nonsense either.”
The Globe and Mail. “Canadians who stretched their finances to buy into the white-hot real estate market are highly exposed to rising debt servicing costs, Bank of Canada deputy governor Paul Beaudry said Tuesday in a speech about the stability of the financial system. Mr. Beaudry pinpointed real estate investors as a potential problem – the first time the Bank of Canada has called them out for their role in driving up home prices. It said investor buying has doubled since the start of the pandemic, while purchases by first-time homebuyers have increased about 45 per cent.”
“‘A sudden influx of investors in the housing market likely contributed to the rapid price increases we saw earlier this year. In such a case, expectations of future price increases can become self-fulfilling, at least for a while,’ he said. ‘That can expose the market to a higher chance of a correction. And, if one occurs, the damage can spread far beyond the investors.’”
From Reuters. “New Zealand’s central bank raised interest rates for the second straight month on Wednesday to keep surging consumer prices in check and warned homeowners in the country’s red hot housing market to get ready for more hikes. The Reserve Bank of New Zealand lifted the official cash rate (OCR) a quarter of a percentage point to 0.75% in the final policy meeting of the year. RBNZ Governor Adrian Orr said the bank had considered a range of options, including a 50 basis point hike, but added the 25 basis point increase placed its ‘best foot forward.’”
“‘At the moment, with everything we have in our hands, we see steady steps of 25 basis points back to levels where the OCR is marginally above the neutral rate as the most balanced approach we can take,’ Orr told reporters after the meeting. The RBNZ has said in its forecasts on Wednesday that rates would reach 2.5% by 2023 and go higher by December 2024.”
The South China Morning Post. “On the fourth Friday of every month, 30-year-old Ding Xunan makes a nearly 20-hour train journey of over 1,700km from Shenzhen in southern China to Pingdingshan, a prefecture-level city in the central Chinese province of Henan to reunite with his new wife. The newlyweds are unable to afford the property prices in the big urban cities, so in 2019, car factory worker Ding bought a flat in his wife’s hometown – a medium-sized city of around 4 million people in the hinterland province in central China’s Yellow River Valley.”
“‘I made a down payment of about 460,000 yuan (US$72,000), and will have to pay back the mortgage by more than 3,600 yuan (US$564) a month for the next 25 years,’ Ding said. ‘The prices were very high back then, about 8,000 yuan a square metre, and now there are very many communities nearby at around 6,000 and 7,000 yuan a square metre. Property prices are starting to drop in growing third, fourth and fifth-tier cities, but I feel relieved. I’ve already spent almost all my own and my parents’ savings on getting married, including the cost of the wedding and housing, but I still have a brother who needs to get married in the future.’”
“In 70 major cities across the country, second-hand property prices fell in 64 month on month in October, up from 53 in September, 43 in August and 29 in July, according to the National Bureau of Statistics. However, the official housing price index may also be understating the scope of the problem by covering only 70 large and medium-sized cities and excluding more than 3,000 third, fourth and fifth-tier cities in China.”
“House prices in a large number of county-level cities across the country have now fallen from a peak of more than 7,000 yuan per square metre in 2018 to around 3,800 yuan per square metre, said Gao Zhendong, an investor focused on developing industrial estates in China’s interior provinces, who has visited several small cities in China.”
From Expat Go. “International attention can be a fickle mistress. While Malaysia – and indeed most anyone – loves getting noticed in high rankings, any negative ranking tends to bristle. Such was the case when Johor’s $100B Forest City development made a social media splash recently. The topic of the video was a rundown of what the people behind the Top Luxury channel perceive to be the world’s most useless megaprojects.”
“Enter Forest City, the mammoth offshore development in Johor under mainland China’s Country Garden Holdings, along with a state-owned Johor conglomerate tied to the Johor Sultan. To say the development has been fraught with trouble since the start would be a fairly accurate statement.”
“With mainland Chinese pinned as its primary target for buyers, Forest City was envisioned as a futuristic, wholly integrated, master-planned green city of 700,000 residents. Despite being touted as an ‘an energy-efficient, ecologically sensitive, land-conserving, low-polluting offshore city,’ Forest City’s development resulted in significant and irreversible environmental impact as man-made islands were reclaimed from ecologically sensitive wetlands and mangrove swamps.”
“Local villagers who depended on fishing for their subsistence livelihoods saw their catches reduced dramatically as reclamation works decimated the fishing grounds. Despite complaints to Johor state authorities, nothing was done, and development continued, all without the legally required Detailed Environmental Impact Assessment (DEIA) ever having been carried out.”
“In 2020, the coronavirus pandemic led to considerable economic uncertainty and near-global travel restrictions, severely affecting the already-faltering sales at Forest City, which plummeted by more than 90% after March 2020. A November 2019 article in Foreign Policy levelled fairly intense criticism at the Forest City project, calling it a ‘massive boondoggle’ and pillorying corrupt Malaysian authorities and inept Chinese management alike.”
“The planned offshore city of 700,000 only ever sold about 15,000 units, most of which were subsequently sold off at steep losses as Chinese investors raced to exit following the political fallout from the development. Even estimates of only 500 people living in Forest City at the beginning of 2020 were termed ‘optimistic’ by one journalist who visited in late 2019.”