A report from Inside Nova in Virginia. “‘Demand fell for each type of home in November,’ Bright MLS analysts said. ‘The higher-priced single-family segment posted the largest drop, but still recorded ‘Moderate’ demand.’ Median home prices also were up, although November’s figure for Fairfax County ($593,000) was below its year-to-date figure ($640,000).”
The East Valley Tribune in Arizona. “Mesa City Council wrapped up a busy year on Dec. 8 by trying to jump-start a stalled residential project that’s now just steel skeleton in the heart of downtown. Construction on a ballyhooed residential complex on city-owned land on the south side of Main Street began in March 2020. So far, however, The Grid remains an idle construction site because of financial snags attributed to the COVID pandemic.”
The Los Angeles Times in California. “Pharrell Williams is getting serious about selling his Hollywood Hills home. The Grammy-winning artist just trimmed the price of his glass-covered compound in Laurel Canyon to $10 million, or $2 million less than he was asking last year.”
The New York Post. “Steve Hafner has sold his Chelsea condo at the beautiful and scandal-scarred Walker Tower at 210 W. 18th St. for $23.5 million. The sale price is half a million dollars off his 2016 purchase price of $24 million, and far less than its $28 million ask in 2017. The classic Art Deco building has been tied to the 1MDB Malaysian sovereign wealth fund scandal. A penthouse there was bought with the stolen funds for $50.9 million in 2014. It was seized by the feds and sold for a pittance – $18.25 million.”
From News Manchester in the UK. “Although this year has been named a seller’s market, there are still some hard-to-sell homes that sitting on Rightmove. A variety of properties across Greater Manchester, listed for one million pound and more, have failed to attract a sale.”
From Stuff New Zealand. “ANZ now expects house prices to fall 4 per cent by the middle of next year, before resuming milder growth after that. The country’s biggest bank had previously expected house prices to edge up 1 per cent overall next year, still below the rate of inflation. It said current housing supply growth was ‘far outstripping’ new demand, describing population growth as ‘anaemic’ with the border closed.”
“‘It’s looking like the shine is well and truly coming off the housing market, with weaker sales, tighter LVR restrictions and new consumer lending protections seeing mortgage lending rapidly drying up, even as new listings surged to multi-year highs.’The narrative around house prices had shifted to a ‘more pessimistic stance’ in recent weeks, ANZ said. ‘There are fewer people at open homes, and auction clearance rates have fallen.’”
“The 4 per cent drop it was forecasting by mid-2022 would only bring prices back to where they were in September, it said. ‘Re-winding the clock a few months for house prices may not be ideal for people who have purchased a property very recently.’ ANZ saw little risk of a pricing collapse. ‘Unless the wheels fall off the economy due to some unforeseen shock, we’re unlikely to see a sudden and deep decline in house prices.’”
The New Daily in Australia. “Wisdom has it that nobody rings a bell for the top of the market – but those with keen ears heard a certain tinkling around Sydney property last weekend. Some closer to the ground were picking up vibrations before that. The auction clearance rate falling into the low 60s on Saturday said residential real estate in Australia’s most expensive city was no longer a rocket ride – now, at best, more of a glide.”
“A trusted North Shore real estate agent reported in conversation before the weekend that the lower end of the market had quite suddenly and definitely turned. The higher end was still strong, but the expected pattern was for the weaker trend to work its way up the ladder. And the turn, as usual, catches out vendors’ expectations. Having watched their neighbours’ house sell for a record, a vendor expects to do at least as well, if not better.”
“After every Sydney boom though, once buyers shed their FOMO and TINA (Fear Of Missing Out and There Is No Alternative) though, prices can drop by a few per cent and plateau for years. Now listings are soaring, not only are there no new government incentives but there are pretty constant headlines about when, not if, the Reserve Bank will lift the cash rate.”
“Once the herd has the perception that the rocket ride is over, that the market is indeed cooling and could well fall a bit, it can rapidly become self-fulfilling. Some very silly prices have been paid and it now might pay to wait. The bad news is twofold: Sydney loses the ‘wealth effect’ it has been enjoying – the sensation of your home being worth so much more encouraging you to spend more; and the boom-bust fallout for the housing building industry.”
From Vision Times. “In addition to the debt crisis, real estate companies in China are also facing another headache – slowing home sales. According to a survey by the E-house China Research and Development Institution, unsold housing stock rose to 2.1 percent in November compared to a year earlier. Over 521 million square meters of housing inventories remained unsold for the month and 44.95 million square meters of supply was added in November which saw only 34.37 million square meters in home transactions by volume.”
“‘The biggest problem in current supply and demand is the prominent weakness in home transactions,’ the E-house report stated.”
The South China Morning Post. “China’s new home prices recorded their biggest month-on-month decline in more than six years in November. Some banks have offered a discount on interest rates to a select number of first-time buyers, as well as speeding up the mortgage application process, said Huang Tao, a project manager with Centaline Property in Guangzhou, another tier-1 city.”
“‘But this slight adjustment of lending rules is insufficient to boost buying significantly. Many homebuyers would prefer to stay on sidelines in face of the growing uncertainty in the property market,’ he said. ‘While new home prices have dropped 10 per cent in Guangzhou, there are nearly no transactions in the secondary market.’”
“‘New home prices fell for a third straight month, at a faster pace. This indicates the property market has gone from overheated to over-cooled,’ said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute. ‘Home prices continue to fall largely due to slow sales amid slacking demand. This is also affecting Chinese developers, who are under severe pressure to shore up their cash flow,’ he added.”
From Bloomberg. “Turmoil in China’s junk bond market has been testing investors’ nerves – and that’s just concerning the debt they knew about. It turns out that property developers including China Evergrande Group, Kaisa Group Holdings, Fantasia Holdings Group and Agile Group Holdings also have lots of opaque liabilities that may or may not be reflected on their balance sheets, making it hard to assess the companies’ true credit risks.”
“Relatively short-term, high-yield obligations known as wealth-management products sold to retail investors, homebuyers and sometimes even developers’ own employees. Unlike wealth-management products offered by banks, those issued by developers are loosely regulated, if at all Public details are sparse on the value of products outstanding and their due dates.”
“Privately placed bonds, often issued by special-purpose companies with obscure names. One tactic to keep the debt off balance sheet – and off the radar of regulators – is to provide guarantees for the bonds that apply on all days except Jun 30 and Dec 31, when the developers compile their financial statements.”