A weekend topic starting with Real Estate Weekly. “For a fourth straight month the number of vacant apartments in New York City increased, according to a survey of the members of the Community Housing Improvement Program (CHIP). ‘This is a housing crisis. Hundreds of thousands of apartments that were occupied a year ago are now sitting empty,’ said Jay Martin, executive director of CHIP. ‘In some places, an owner would have to drop the rent by 50% to rent out an apartment. But, most owners cannot sustain that type of operating loss for the next few decades because of the high operating costs, especially property taxes,’ explained Martin.”
“In addition to the growing number of vacancies, the CHIP survey found that 17.6 percent of residential tenants have paid no rent in November. Additionally, 43.4 percent of commercial properties have paid no rent. Members also report that they have offered their other commercial tenants significant concessions during the COVID-19 emergency. Many rent-stabilized buildings have first-floor retail stores that have historically been able to offset the artificially low rents in the residential units.”
From Patch New York. “In what is surely no surprise for residents, two ZIP codes covering Midtown and Hell’s Kitchen rank among the most expensive in the U.S. by home sale price this year — although one saw a precipitous drop compared to 2019. According to the annual study by Property Shark, released this week, the 10018 and 10019 ZIP codes both ranked among the nation’s 100 most expensive this year based on the median sale price of homes from Jan. 1 through Oct. 15.”
“Three spots below is 10018, covering a sliver of the Garment District and Hell’s Kitchen, with a median price of $1,575,000. High as that may be, it represents a 38 percent drop from last year, when 10018 had a median sale price of $2,520,000 — good for 26th on the nationwide list.”
From Patch California. “Orange County has seven of the most expensive zip codes in the U.S., according to Property Shark’s annual ranking of the 100 priciest zip codes in the U.S. ‘Covering the exclusive Santa Monica neighborhood North of Montana and parts of Rustic Canyon, Santa Monica’s 90402 marked its second year as the third-priciest zip, despite coming in 10% below 2019 pricing levels,’ Property Shark said. ‘This price drop allowed Beverly Hills’ 90210 to equal Santa Monica’s median, as the former’s median sale price contracted at a milder 8%, thereby giving Beverly Hills its highest position since 2015.’”
From The New Statesman in the UK. “Even before Britain entered the second wave of Covid-19 and England was locked down again, you might have noticed that something was wrong with London – specifically central London. The truth is that cities such as London have lost their raison d’être – namely the monopoly they enjoy on the provision of talent. Have we reached peak London?”
“I put this to Jim O’Neill, the cross-bench peer and former Goldman Sachs chief economist. ‘The whole Bric concept, came out of 9/11,’ he said, in reference to the grouping of the major emerging economies of Brazil, Russia, India and China. ‘The message below the surface was that this is the end of American-led globalisation. I suspect you’re onto something. In a way you could see a number of signs that London’s peak might have already been. Arguably Brexit is a very bad thing for London, given what it had done for the internationalisation of London. The real estate market had already peaked four years ago, and the rest of the country kind of hadn’t.’”
“More worryingly, his recent visits to London have crystallised his own fears for the capital. ‘What my generation, what your generation has grown up on seems to be dead, and the whole presumption [about] what’s driven the world economy in the past 40 years is now actually gone. All over the world – and London epitomises it – 60 per cent of GDP has come from big metro cities. I used to call London the Bric capital of the world [as the city that benefited most from the emerging Bric nations], now it looks like the capital of nothing.’”
From Money Control on India. “As the COVID-19 induced lockdown started easing in June there were indications that rents had been trimmed by 15% – 20%. Flexible and smart landlords agreed to re-negotiate rents downwards for a limited period with their existing tenants. The ones who remained stubborn and let go of their tenants have paid dearly with the consequences.”
“By the 1st week of November – rentals quoted by landlords were down 25% from pre-COVID levels at a median level in Mumbai. In the case of premium properties, quotations have dropped deeper anywhere between 30 – 40%. Now as properties lie vacant for months and maintenance bills remain at high levels, owners are pushed into a situation of steep cash outflow every month. Mumbai’s battered and bruised landlords are seeing red with no light at the end of the tunnel.”
“Perhaps COVID-19 will provide a lesson that the market has been teaching over the last 5 years. Real-estate in Mumbai stopped being an investment opportunity a long time ago. The only reason to purchase a home is for the reason it was initially meant to be: end-use. By the end of this brutal carnage, if the lesson has been imbibed by recent apartment owners and prospective buyers – it will be an education that would have been worth it.”
From Stuff New Zealand. “There’s nothing more dangerous than a bunch of politicians who have painted themselves into a corner over 20 years and now face the noise and the heat of a braying mob with torches demanding heads on pikes and instant action.”
“The politicians tend to lash out or throw others into the path of the mob in a panic to avoid being pinned to the wall and torched. It can get ugly and that is exactly what is happening now as 20 years of inaction and short-sighted self-interest come home to roost in the now-toxic politics and economics of the housing market.”
“Homeowners are suddenly $100 billion richer because the Reserve Bank is printing up to $128b and lending it via the banks at obscenely low interest rates to those with inflated equity to outbid first-home buyers. It feels like those at the top of the ladder have been given a chainsaw to remove all the rungs below them and lop off a few aspiring heads for good measure.”
“After so many housing price boom shocks, young renters and their parents are beside themselves. This latest one seems even more obscene because it is the Government’s own central bank that seemed to trigger it, and the most popular Government in a generation seems to either think it isn’t a crisis, or has no ideas on what to do.”
The South China Morning Post. “The number of homebuyers reneging on flat purchases this year has reached an all-time high as the Covid-19 pandemic casts a shadow on the city’s economy, pushing the unemployment rate up and forcing many companies to implement pay cuts as they struggle to stay in business.”
“They have walked away from 47 deals this month alone, taking the total so far this year to 380, the highest since 2013 when record-keeping first started. Last year’s cancellations stood at 335 versus 160 seven years ago. ‘The changing economic fortunes of new buyers due to the Covid-induced recession, could mean the number of reneged purchases continues to increase,’ said Will Robertson, executive director at Nest Property.”
“New World Development saw buyers forfeit around HK$6.8 million (US$877,000) on 13 units at The Pavilia Farm in Tai Wai this month. Sun Hung Kai Properties also saw 13 cancellations amounting to some HK$16 million in the second phase of Grand Yoho in Yuen Long in November.”