It’s Friday desk clearing time for this blogger. “When Carolyn Guss and her husband listed their California home, which sold for under asking, their real-estate agent said people were eager to buy homes with yards outside of San Francisco proper. Would-be buyers expressed interest, but there was a catch: Too many people were trying to sell in San Francisco. During the first week of August, property listings in the city of San Francisco were up 96% compared with the same week last year, according to Zillow. ‘We realized they couldn’t sell their place in San Francisco,’ said Ms. Guss. ‘When did you ever think that you would say the sentence, ‘Yeah, I can’t sell my place in S.F.’?”
“Tony Broccoli, whose father produced many of the James Bond films, has sold an oceanfront home in Malibu for a little over $7.44 million. Broccoli bought the property in 2014 for $8 million, records show.”
“$28.5 million — Beverly Crest. Behind the gates of Beverly Park, an under-construction mansion set on four acres where Oscar-winning producer Richard Zanuck once lived changed hands for $11.2 million shy of the original asking price. $25 million — Beverly Hills. On Sunset Boulevard, Donald Simon sold an estate for $17 million less than the original asking price.”
“The number of empty apartments for rent in Manhattan soared to their highest level in recent history, topping 13,000, as residents fled the city and landlords struggled to find new tenants. The number of apartments for rent, or listing inventory, more than doubled over last year and set a record for the 14 years since data started being collected, according to a report from Douglas Elliman and Miller Samuel. As the number of apartments listed for rent hit 13,117, the number of new leases signed fell by 23%.”
“July’s weakness, and what brokers say is already a slow August, suggests that Manhattan’s real estate and economic troubles could extend well into the fall or beyond. ‘The outbound migration is higher than the inbound migration right now,’ said Jonathan Miller, CEO of Miller Samuel. ‘This could be a difficult couple of years for landlords.’”
“High-end condos in Portland’s Pearl District sold on average at $507 a square foot last year while the price per square foot has dropped to $481 so far in 2020, says Sean Z. Becker of Portland-based Sean Z Becker Real Estate. Condos in the South Waterfront have dipped from $469 a square foot last year to $441 a square foot so far in 2020, he adds. In early March, three potential buyers looked at a $1.5 million condo Becker has listed. Two returned several times and he expected a sale. Then restaurants, cafes and bars — one of the walkability perks of living downtown — were shuttered due to the pandemic. The condo is still on the market, he says, and ‘we’ve only had two showing in four months.’”
“The Emerald, a 40-story condominium building in Seattle, is about to open and only about 30% of the homes have been sold. The result are price cuts averaging 9% across the 262 units in the project, said Josh Nasvik, managing director at Polaris Pacific. Nasvik attributes the weak sales numbers to a market that was softening before the crises. It was a slowing from ‘the frenzy that Seattle had experienced for the five previous years,’ he said.”
“Although rental rates in Mississauga held strong at the beginning of the COVID-19 pandemic and associated lockdown, a new report suggests that prices are down about 10 per cent year-over-year. The report says data from the Canada Mortgage and Housing Corporation indicates that 2,229 condo apartment builds were completed in May—the third-highest monthly total over the last three years. The report says a ‘significant portion’ of those units were purchased by investors and are hitting the rental market.”
“Growing economic uncertainty relating to both COVID-19 and Brexit is prompting lenders to tighten their purse strings. Another ominous development is the trend for lenders to shun the Bank of Mum and Dad. This apparently draconian measure was followed closely by Lloyds withdrawing their ‘Lend a Hand’ mortgage for new applicants. The axing of the Lend a Hand mortgage is a sign that Lloyds no longer expects house prices to increase sufficiently to justify this offer.”
“Thirdly, Moneyfacts reports a sharp drop in the number of high LTV mortgage deals available. This time last year there were 758 mortgage deals available with only a 10% deposit. Now there are just 46, and the number may shrink further. Withdrawal of low-deposit / high LTV mortgages is a further indication that lenders are no longer confident of house price increases, and may even be fearing a price drop.”
“Apartments have held their value better than houses since the pandemic sent property prices reeling, but plunging demand and oversupply is putting investors under pressure to sell at the worst time. Brisbane investor Lisa Liang is among owners looking to cut their losses. She recently listed her three inner-city apartments for sale because she is worried prices will fall further over the next three years.”
“‘There’s very little demand for apartments at the moment, especially for high rises, and there’s so many of them in Brisbane,’ she said. I think there’s no prospect for capital growth for apartments in this market. My apartments have fallen in value by up to $100,000 each since I bought them six years ago. So I want to sell up and buy houses instead, but unfortunately the apartments are not getting a lot of interest and those few people who inquired are looking for a bargain.’”
“Popular suburbs across Sydney are seeing the highest discounts on sale prices as the property market struggles. In New South Wales, the Canterbury Bankstown, Lower and Upper North Shore, City, East and Wollongong areas prices have fallen at least 16 per cent for July. Around 15-16 per cent of homes listed across the Eastern Suburbs and further south in Wollongong can also be picked up for below the initial asking price.”
“Cherie Humel from Clarke & Humel Property in Manly told Domain sellers were still playing catch-up to the changing market conditions, and it was important to have open conversations up front rather than ‘sending them off to Disneyland’. ‘It’s a rookie error to list it higher and hope that it’s going to get there. All that happens is buyers aren’t even interested in the first place,’ said Ms Humel.”
“The prices of pre-owned homes in Hong Kong have come off their 10-month peak in June. More cases of losses are on the rise, with up to 4,000 new apartments remaining in the pipeline for launch over the next four months of the year, on top of the current inventory of 13,000 unsold abodes around the city, according to published data. That is pushing owners of lived-in homes to slash prices.”
“A flat measuring 508 sq ft at Harbour Pinnacle in Tsim Sha Tsui sold last week for HK$12.3 million, making a loss of HK$3.3 million after taxes and fees were added. Another flat measuring 737 sq ft flat at Parc Oasis in Kowloon Tong sold for HK$15.2 million, for a loss of HK$3.07 million inclusive of taxes and fees because the owner was in a rush to emigrate from Hong Kong. ‘As more owners offer more discounts, there will be … pressure on property prices,’ said Sammy Po, chief executive of residential division at Midland Realty.”
“Not yet 30, Beijing office worker Li thought she was already on her way up China’s private property ladder with two apartments bought and rented out. Then came the new coronavirus, jobless tenants leaving town and a rent falloff. She’s one of millions of Chinese landlords who have bought apartments to let in a highway to the country’s growing middle class, many now facing a first slump in rental income. Li, who declined to give her full name, said she had to almost halve the rent at one of her apartments between February and May to hang on to a tenant, while her own salary was slashed 25% as her employer made coronavirus cutbacks.”
“‘I must pay the rent of my room in Beijing, and monthly mortgages for the two apartments,’ she said.”
“‘Two groups … suffer the most,’ said Yuan Chengjian, vice president of Zhuge House Hunter. ‘One is long-term rental firms … the other is investors who buy properties through high leverage financing, because they pay off part of their mortgages with rent.’”
“Luo Shuzhen, 50, with 80 rooms to sublet in two buildings in the southern industrial city of Dongguan, said tenant numbers have dropped 30% this year. She’s now postponing plans to furnish an apartment she bought last year. ‘It’s hard to say how long the epidemic would last, so I’m not sure whether I can maintain the rental business in the second half,’ said Luo, who runs a convenience store.”
“‘Half of the transactions in the securitisation market use 90 days as the definition for default, while the other half use 180 days,’ said Tracy Wan, senior director of Asia-Pacific structured finance at Fitch Ratings. “For those who use 180 days, you’d have a longer time to recognise defaults, and that number is still going up.’”
“For Beijing office worker Li, the time to seek assistance in keeping her property dreams in one piece has already come. ‘I even asked my father for help – and I’m nearly 30 years old!’ she said.”