A report from CTV News in Canada. “Still out of reach for most Canadians, high-end houses and apartments in both Western Canadian cities saw drops in their median prices over a recent 12-month period, according to Royal LePage. ‘The last couple years have been trending in a pretty dramatic reduction of value across the board,’ said Jason Soprovich, a Royal LePage Sussex realtor in Vancouver. Soprovich has been seeing more luxury homes sell at what he called ‘anomaly drops,’ sale prices as much as 40 per cent under the listing price.”
“Sellers who can’t afford to wait could be taking major losses. ‘When they have to suck it up, they suck it up big,’ said realtor John Hripko. Recently, he knows of a seller who bought their home for $3.7 million and sold it for $2.9 million.”
From Teesside Live in the UK. “Residents of a luxury Nunthorpe development say a housebuilder’s plan for extra homes is ‘madness’ and a traffic ‘accident waiting to happen.’ ‘Furious’ residents are worried their homes will be de-valued by the new additions and they would ‘not have bought’ if they’d known about the changes. One resident, who preferred not to be named, claims the extra houses will cause ‘massive’ traffic problems. ‘It’s quite a big-build estate,’ he said. ‘It’s the last little bits on the estate and they want to cram these houses in. ‘We have paid £400,000 for a new house. They’re still putting things through the door saying exclusive four to five bedroom homes, knowing fine well they’ve applied for planning permission.’”
The South China Morning Post. “Hong Kong’s commercial banks are cutting their valuations of mortgaged homes as they bow to the double whammy impact of a viral epidemic with months of anti-government protests, in a move that could drive even more borrowers into negative equity and provoke panic selling. ‘Some owners, who may not be as liquid as others, are becoming nervous, and are keen to offer deeper discounts to get rid of their property before it turns into a negative asset,’ said Derek Chan, head of research at Ricacorp Properties.”
From Bloomberg on Thailand. “Bangkok’s condominium market, once a favourite of Chinese investors, faces a bleak year as the Covid-19 outbreak keeps buyers away. ‘The demand from foreigners may disappear in the first half following the outbreak,’ said Sopon Pornchokchai, the consultancy’s president, adding that there are 100,000 vacant condominiums in and around Bangkok. ‘We will need to rely on local buyers, but that won’t be easy.’”
“Even before the virus spread from China, foreign interest was flagging as the outlook for an economy reliant on trade and tourism deteriorated amid currency strength in 2019 and the US-China trade war. Land & Houses does not plan to open any new condominium projects this year. Another developer, Singha Estate, is ‘very cautious’ about buying land for residential offerings because of concerns about an oversupply of property in certain locations, its head of investor relations Maysenee Ratnavijarn said.”
The Asia Times on Cambodia. “Has Cambodia’s property bubble finally burst and is a sudden exodus of Chinese nationals to blame? Cambodian house prices have fallen by as much as 33% in some areas since the government announced last August a ban on mainly Chinese-run online gambling operations. Chinese investments drove an almost ten-fold spike in rental, lease and sale prices between 2017 and 2019, buoyed by cash-rich Chinese who often paid well above then-prevailing market rates.”
“Because online gambling accounted for the lion’s share of profits in the city’s gaming sector – up to 80%, according to some estimates – the ban has since brought the city to a veritable standstill. Construction projects in the once-frenzied city have stalled, with many sites lying half-finished, while many roads remain ripped up from all the building. Land prices in Sihanoukville have fallen by as much as 30% since the ban was implemented, while rental prices have also slipped. Houses that were fetching $800 per month last year are now getting just $200, according to industry reports.”
“‘The construction sector in Sihanoukville is a bubble. It rose too quickly,’ Vongsey Vissoth, permanent secretary of state of the Ministry of Economy and Finance, told local media. ‘Therefore, when something happens like banning online gaming, it drops quickly.’”
The Edge Malaysia. “Rahim & Co International Sdn Bhd CEO of real estate agency Siva Shanker anticipates a rental price war. ‘You’re going to find thousands of these properties available for rent as more stock will come into the market now. [Many] will start off by asking for high rents that were promised by their investor clubs, but that won’t happen and they’ll have to drop the price further. The huge rental price war, which has been happening in the last year or so, will just escalate and become even more vicious in the next one to two years when more units are completed and get thrown into the market.’”
“Affordability and oversupply issues in the property market are predisposing many first-time homebuyers in the Klang Valley to rent, a shift from the current tendency to buy. Siva notes that many of these units were bought by speculators who were, to some extent, sold the idea by investor clubs or property gurus, based on speculation that once the properties were completed, the rent would far surpass mortgage repayments or the properties could fetch a gain of 20% to 40%.”
“‘There was a lot of easy financing and everything worked towards an easy purchase even if you had no money. A lot of people bought properties all over the place, which is why the market was booming in 2011 to 2014. Now the [buying] has stopped, but the building cannot stop, which is why we’ve got an overhang of 50,000 overhang units,’ he says.”
The Times of India. “A tycoon puts an 8,000 sq ft, sea-facing penthouse in a south Mumbai highrise on sale, expecting at least Rs 120 crore. With no takers two years later, he has reduced the price to Rs 50 crore. A developer said this is one of the major reasons for the oversupply in Mumbai. ‘It was good when prices were appreciating and flats were selling. Now, the chickens have come home to roost,’ said a developer.”
“‘In the past 15 years, extensive money poured into real estate through FDI and private equity,’ said Pankaj Kapoor of Liases Foras. ‘In order to improve their cash flow, builders are compelled to launch projects even in the current stagnant market just to recover the cost of land. They are not getting any additional money by building. There are no buyers for the land they bought at phenomenal rates,’ he added.”
The Herald Sun in Australia. “The novel coronavirus is beginning to infect Melbourne’s property market, with Toorak’s top end its first victim. Real estate experts have warned there will be short-term pain for apartment developments with exposure to offshore investors, as well as for landlords relying on foreign students to fill vacancies. There’s also a possibility of cheaper rents for the city’s most affordable apartments if international students are unable to leave quarantine zones overseas.”
“But the most pronounced effect so far has been in Toorak, which top-end buyer’s advocate David Morrell said was looking listless. ‘Coronavirus has smashed the top end,’ Mr Morrell said. ‘Nobody wants to put their house on the market if they (Chinese buyers) aren’t buying.’”
The Wall Street Journal on New York. “In its latest report on investment sales, the Real Estate Board of New York for the first time provided a breakout of data on rent-regulated buildings. It found that the number of transactions for such buildings fell by more than half since the law took effect in June. The value of sales for buildings with at least one rent-regulated apartment dropped by more than $4.1 billion in the second half of 2019 compared with the same period the year before, the report said.”
“It found that for larger regulated buildings, those with 11 or more apartments, the value of all sales fell by 78% in the second half of last year across the city compared with the same period in 2018. The number of transactions declined from 231 to 88. The total value of transactions in these larger rent-regulated buildings fell by 81% in Manhattan. In Queens, they fell an astonishing 96%, from $979 million in sales in 18 transactions in the second half of 2018 to $39 million in sales in seven transactions in the same period last year, the report said.”
“Behind the scenes, building owners tell of dramatic cuts in property prices, which are down about 30% to 50% from the peak a year or two ago, with few buyers stepping up to bid.”