It’s Friday desk clearing time for this blogger. “Lenders should be better prepared to deal with home owners who are in danger of losing their home, the Consumer Financial Protection Bureau (CFPB) warned on Thursday. ‘There is a tidal wave of distressed homeowners who will need help from their mortgage servicers in the coming months. Responsible servicers should be preparing now. There is no time to waste, and no excuse for inaction. No one should be surprised by what is coming,’ said CFPB Acting Director Dave Uejio.”
“A stunning Prospect Park West mansion is now officially back on the market for $12.25 million. That’s actually less than the $12.4 million the sellers paid for it six years ago, in 2015, according to property records.”
“The New Jersey Apartment Association, which represents mostly large landlords, estimates that its members and other landlords across the state have lost around $2 billion in rent since COVID-19 began to devastate the economy. What’s more, it predicts that several rounds of federal assistance will pay for only about half of the total. ‘The small landlords are still holding on by a thread, while the large landlords are seeing greater and greater losses,’ said David Brogan, executive director. ‘It was fantastic that the federal government finally woke up and saw that this was necessary, but I think there are going to be some write-offs.’”
“A spine-tingling ghost town of mansions in Missouri, that was supposed to become a $1.6 billion resort community, went viral on social media this week. ‘Have you ever seen a subdivision full of abandoned mansions?’ she asks in the video. ‘This was supposed to be a 1.6 billion dollar resort community. But instead it turned into a ghost town when the 2008 housing crisis hit. Five people had ended up in federal prison. And 13 years later the houses just sit here.’”
“Metro Vancouver has a ‘moderate’ degree of vulnerability in its housing market largely because of too many new rental units sitting empty, said the Canadian Mortgage and Housing Corp. in a report. The excess inventory can be seen in the higher vacancy rate for newly completed apartments ‘that are asking for rents that are more than what is demanded by the market in these times,’ said Eric Bond, senior specialist at CMHC. ‘Operators of those buildings might see some financial head winds in the short term.’”
“Egypt’s housing market remains depressed, with the nationwide real estate index falling by 14.38% during 2020, far worse than the 2.28% y-o-y decline seen during 2019. House prices are being undermined by the vast amounts of new construction, for instance in the new capital.”
“Emaar the Economic City said losses widened after a tough year for the commercial real estate sector. Losses grew by more than 130 percent to reach SR1.25 billion ($333 million), the company said. ‘Due to the prevailing economic environment and delays in completing projects, the management reassessed life cycle cost estimates of residential and industrial projects and accordingly, the cost estimates were revised, resulting in increase in gross loss by SR307 million as compared to the corresponding year,’ the company said in the statement.”
“PayProp has published its latest rental index, highlighting how the Covid-19 lockdown devastated the rental market in South Africa. The second factor is that many short-term and leisure rental properties moved onto the long-term rental market in 2020, after a sharp decline in tourism. This led to an oversupply of housing – particularly in tourism hotspots like Kwa-Zulu Natal and the Western Cape, putting further downward pressure on rental prices.”
“A Queenstown resident whose former development company is in hock to creditors for $1 million is selling luxury apartments through a new company. Lachlan Francis’ company was to build a 16-unit apartment complex, Freshwater, on the corner of Hallenstein and York streets. His company, CSF Trustees Ltd, was placed in liquidation on May 4 last year at the request of an out-of-pocket contractor, Amalgamated Builders Ltd.”
“One of the creditors, Queenstown Earthworks Ltd owner Craig Harper, says he’s owed about $50,000, including about $30,000 he shelled out for his own subcontractors. ‘We bent over backwards to help [Francis],’ he says. ‘It’s absolute bulls***.’”
“Tasmania has chalked up some of the country’s most stunning property price growth, with two suburbs achieving price rises of over 90 per cent in the past five years. Tasmania’s results contrast sharply with all the other states, bar Queensland. Sydney, for example, has a number of areas where prices fell over the past five years – houses in Austral by 78 per cent, Hillsdale units by over 30 per cent and Sydney Olympic Park units by 19.8 per cent being the clearest examples. In Melbourne, units in Carlton dropped in price by 37.1 per cent, and in Docklands by 12.5 per cent.”
“In Darwin, units in the city centre suffered a 30.7 per cent price drop over the last five years, units in Campbell in Canberra Central fell by 18.1 per cent, while houses in Balga in Perth sank by 24.2 per cent. In South Australia, Kadina on the Yorke Peninsula was the worst performer with a price fall of 9.9 per cent.”
“In Zhuozhou, a small city in China’s north, Zhu has stopped making mortgage payments on her apartment after its developer did not build a promised rail line that would have allowed residents to commute to Beijing for work. The accountant is one of some 1,000 home owners in the housing project who ceased payments in anger last year, according to Zhu and two other buyers campaigning for compensation who spoke with Reuters. ‘I didn’t do anything wrong, so why do I have to bear all the consequences?’ said Zhu.”
“In the picturesque city of Dali in the southwest, Li, a small business owner, is still waiting to move into an apartment that was meant to be handed over more than two years ago. Li and another buyer in the project said they had been told by the developer it could not hand over the keys to the apartments because it doesn’t have the money to pay its contractors. ‘The developer has postponed delivery four times since the end of 2018. We have completely lost trust in them’ said Li, who is currently squeezing his family into a small rental apartment with his parents.”
“The plight of Zhu and Li, who asked that only their surnames be used for fear of harassment, underscores the growing debt woes of developers active in smaller cities. Many of them indulged in unbridled borrowing amid a red-hot market between 2016 and 2018 but now find themselves grappling with too much debt, sharply weaker demand and tighter regulations.”
“Bond defaults by property developers quadrupled last year to 26.6 billion yuan ($4.1 billion) and as of mid-March this year, developers, led by China Fortune Land, had already defaulted on 8.7 billion yuan of bonds, according to data from the National Institution of Finance & Development. Onshore and offshore bonds from developers maturing this year are set to jump 42% to a record 900 billion yuan ($138 billion), the data also shows.”
“‘Some real estate companies with high leverage and weak capital turnover are facing a relatively high amount of pressure on short-term debt repayments,’ economists with Beijing-based Zhixin Investment Research Institute said in a report. ‘The tightening financing environment may lead to a cash crunch, and there is a possibility of cross defaults among developers, trusts and third-party wealth institutions.’”
“Zhu, who still lives and works in Beijing, is hoping the lack of mortgage payments will bring China Fortune Land to the negotiating table after she and other buyers engaged in fruitless rounds of petitions and protests. ‘I came from the countryside hoping through hard work to earn my own home in a city, but now I am back being rural again with an apartment in the middle of nowhere,’ she said.”