Asia’s Rich Invest in London
Asia’s Rich Invest in London
PRSEA | May 20, 2011
Asia’s rich are increasingly investing in property in mature markets such as London, according to Standard Chartered plc. Investors want to curtail risk and London is considered a safe place to place money.
Talking to Bloomberg, the bank’s global head of private investment Shayne Nelson said, “We’re seeing quite a flow into the U.K., into prime property in London, both commercial and residential.”
The bank generated a record £5.9 billion (US$9.5 billion) from Asian investors last year and plan to focus on emerging markets for private banking such as Asia, the Middle East and Africa. “The wealth creation in Asia is pretty incredible,” Nelson said. “In China, there are 477,000 high- net worth individuals, or people with US$1 million or more of cash to invest. And it’s not just China, but India and Indonesia.”
Private banking assets under management globally grew 31 per cent to US$46 billion as of December 31, according to a 2011 outlook statement issued March 2 by the bank. Assets in Asia increased 39 per cent as the region’s economic expansion drove demand for credit cards and wealth management services.
Global ViewPoint | August 2011 | CBRE
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Housing and Economic Forecast Points to Rising Activity
Housing and Economic Forecast Points to Rising Activity
Brought to You By: Realtor.org
Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the Realtors® Midyear Legislative Meetings & Trade Expo here.
Lawrence Yun, NAR chief economist, said existing-home sales have been underperforming by historical standards and will rise gradually but unevenly.
“If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better,” Yun said.
“We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million – that’s a sustainable level given the size of our population.”
Mortgage interest rates should rise gradually to 5.5 percent by the end of the year and average 6.0 percent in 2012 – still relatively affordable by historic standards.
“A huge volume of cash sales, supported by the recovery in the stock market, show that smart money is chasing real estate. This implies that there could be a sizeable pent-up demand if mortgages become more readily accessible for qualified buyers,” Yun said. “The problem isn’t with interest rates, but with the continuation of unnecessarily tight credit standards that are keeping many creditworthy buyers from getting a loan despite extraordinarily low default rates over the past two years.”
Yun said that if credit requirements returned to normal, safe standards, home sales would be 15 to 20 percent higher. He added that some parents are buying homes with cash for their children, and offering them loans which provide better returns than bank accounts or CDs.
Yun projects the Gross Domestic Product to grow 2.5 percent this year and 2.7 percent in 2012, adding 1.5 million to 2 million jobs yearly over the next two years. The unemployment rate should decline to 8.8 percent by the end of 2011 and average 8.6 percent next year, returning to a normal level of 6 percent around 2015.
Housing starts are forecast to rise but remain below long-term trends, reaching 603,000 in 2011, up from 595,000 last year, and continue growing to 908,000 in 2012. New-home sales are seen at a record low 320,000 this year, rising to 487,000 in 2012. “A recovery in new homes will be slow because of the extra price discount in the existing home market,” Yun noted. In March, the typical new single-family home cost $53,300 more than an existing home.
Inflation appears to be relatively modest for now, with the Consumer Price Index rising 2.9 percent this year. “We’ll be closely watching the impact of fuel costs on consumer spending and inflation – that would slow economic growth, job creation and home sales,” Yun said.
Apartment rents are trending up, and are likely to rise at faster rates as vacancies decline. Following the correction in home prices, it has now become more affordable to buy in most of the country. “Twice as many renters had enough income to buy a home in 2010 in comparison with 2005, so we have a much larger pool of financially qualified renters,” Yun said. “Rising rents and excellent housing affordability conditions will encourage potential buyers who’ve been on the sidelines.”
Yun expects the median existing-home price to remain near $170,000 over the next two years, which would mark four consecutive years of essentially no meaningful price change.
Frank Nothaft, chief economist at Freddie Mac, holds similar views on the outlook. “Economic activity will accelerate this year – there will be no double dip in the economy,” he said. Nothaft is more optimistic on job growth, expecting 2.0 million to 2.5 million jobs created in 2011 with unemployment dropping to 8.4 percent by the end of the year.
Nothaft expects the 30-year fixed-rate mortgage to trend up to 5.25 percent by the end of the year, and for home sales to rise 5 percent. “National home price indices are close to a bottom and prices are likely to bottom sometime this year,” he said.
Refinancing activity in 2011 will be only half of what it was last year. “As a result, banks may become more willing to lend to home buyers,” Nothaft said.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
Japan's Fujisawa Sustainable Smart Town - a model for 'smart life'?
Japan's Fujisawa Sustainable Smart Town - a model for 'smart life'?
• Purpose-built, green cities could be a sign of things to come
• Fujisawa 'smart-town' due to open its gates in 2013
• Fujisawa 'smart-town' due to open its gates in 2013
Life in Japan's Fujisawa Sustainable Smart Town could be free of traffic jams and petrol stations. Photograph: David Levene
Picture life without traffic jams or petrol stations. Have your Smartphone automatically book your next doctor's checkup. Tootle off to work on an electric bike through manicured parkland.
Reserve one of the 1,000 homes in Japan's Fujisawa Sustainable Smart Town and such a low carbon, eco lifestyle is yours for the taking.
Sound like a futuristic, eco-version of Yuppie-ville? Perhaps. But this conversion of a disused factory site into a purpose-built, green city could well be a sign of things to come.
And not before time: by 2050, about eight in ten people will be living in cities, population experts predict. The implications of such rapid urbanisation are worrying environmentalists. The planet's future, many of them warn, could be won or lost on urban planners' drawing boards.
Authorities in the central Japanese city of Fujisawa are hoping their "smart town", due to open its gates in 2013, might provide a model for the way forward. With a total budget of 60bn yen (£463m), the pilot experiment is expected to cut average carbon dioxide emissions by 70%. With the first brick laid only last month, the ink on the blueprints has yet to be completely finalised. But the city's backers – a consortium of nine companies, led by electronics giant Panasonic – aren't short on ambition.
"Our aim is to build a smart town that will be the model for 'smart life' [that is being] called for worldwide," says Teruhisa Noro, a spokesperson for the project at Panasonic, which sees its involvement as part of Japan's rebuilding efforts after March's tsunami.
As a minimum, every house will have solar power generator units and home fuel cells. Energy storage devices and heat-pump hot-water systems will come as standard. The same with energy-saving air conditioners and sensor-controlled lighting.
Green energy systems lie at the heart of the leaf-shaped city, a structure intentionally designed to show the natural interconnectedness of its constituent parts.
One of the critical innovations underpinning the project is a smart grid, which will see every villa, apartment and condominium hooked up to same real-time information network, enabling the supply of electricity to be lined up with demand.
"Fujisawa will be a town with power and information networks that are connected from the start,," says Noro.
The statement holds an important clue as to the drivers behind the Smart Town idea. Saving the planet is part of it and Panasonic has set itself the target of becoming the world's greenest electronics company by its centenary in 2018. But sustainable cities promise to become big business too. By Panasonic's reckoning, global demand for new cities will hit 3,100 trillion by 2030.
The consortium bankrolling the Fujisawa project includes utilities, a consultancy firm, several banks, a real estate developer, an architect firm and a construction company. All see it as an opportunity to test out products and solutions that can then be spun out elsewhere.
Most of that demand will centre on Asia, where migration from the country into cities is set to explode. China alone is expecting its urban population to increase by 350 million over the next 10 years. The country has earmarked funds for at least a dozen new eco-cities as part of its five-year plan.
Panasonic is involved with a number of other projects, including the Sino-Singapore Tianjin Eco-City project in China and the Delhi-Mumbai Industrial Corridor in India.
"There's a convergent trend between companies and cities," says Bruno Berthon, managing director of sustainability services at global consultancy firm Accenture, one of the companies participating in the Fujisawa pilot.
Part of that convergence centres on shared environmental targets. Carbon emissions in Europe are going up in every city bar one (Stockholm). Innovative business solutions are seen as critical to turning that around.
Fujisawa's emphasis on healthcare also fits public policy objectives. The early plans promise technology link-ups with medical facilities and other ways to help older people live a comfortable life - important, given Japan's ageing population.
Competition represents another overlap of interests. If the20th century was all about the competitiveness of nations, Berthon says, then the 21st century will be about the competitiveness of cities.
Companies are looking to set up operations in urban environments with efficient transport links, low pollution and good housing options, he adds. "Industries are choosing not between countries, but between Frankfurt, Barcelona and Marseilles or Beijing and Shanghai."
This raises another important issue. The innovations being tested out at Fujisawa are designed not just with future greenfield cities in mind; existing urban conglomerations stand to gain much too. "In theory, it's easier to get these 'smart cities' right from the start. In Europe and elsewhere, the battle is to retrofit", says Paul Rainger, an expert on urban sustainability at Forum for the Future.
The ultimate aim of these huge "working labs" is to engineer ideas that will become standard for future urban infrastructure across the board, argues Rainger. "Companies are looking for the sustainability equivalents of the Sky dish or Edison light bulb."
He cites the example of San Francisco, where the municipal transportation department has introduced an open source database and invited companies to devise businessideas on the back of it. A Smartphone app to determine when your bus or tram will arrive is just one of the ideas to have emerged so far. Another app uses sensors in the city's car parks to direct drivers to empty parking spaces.
The big prize for companies focuses at the "macro level" ofrunning urban services, such as the power grid or water grid, argues Rainger. That requires an entirely different business model and skill set from current practices and will be less related to large scale power generation, for instance, and more about micro-managing energy networks.
OPP Launch Issue
OPP Asia – Launch Issue – May 2011 (Overseas Property Professional)
Posted on Friday May 27, 2011 by Steve Dawkins
PREIT Group is delighted to present the first issue of the Asian edition of Overseas Property Professional – May 2011
http://issuu.com/homesearch/docs/opp_asia_may CLICK HERE
We have teamed up with OPP Asia to offer property agents across the region a free hard copy subscription of the magazine. Please email preit.cn@gmail.com with your name, company name, contact details and postal address. We hope that you enjoy the magazine and welcome the chance to speak to agents that may be interested in marketing international property.
April 2011 US Real Estate Market Review
All the April real estate numbers are out, so it's time for our monthly round-up of everything that moves in U.S. real estate! First, our big Redfin news is that Agent Insights is a huge hit: in markets like Seattle, San Francisco and Washington DC, Redfin agents have published first-hand insights on 10 - 30% of the listings that debuted since the website feature launched, everything from "the 4th bedroom isn't legal" to "significant water damage" to "spectacular view" to "on a bus line, but electric so very quiet."
Very, very good stuff. Our data providers limit us to sharing data with registered users, so sign in and start searching! Hopefully, we can help you pick the homes to see before you get in your car.
Prices Down, Sales Up
Alright. Now. WHAT ABOUT REAL ESTATE PRICES? The data are mixed. February prices fell across every city in the U.S. except Detroit, almost re-visiting the pre-tax-credit April 2009 low:
| Market | MoM Change | YoY Change | Date of Max | Change from Max | Prices Last at This Level in... | # of Months of Decrease |
| Phoenix | -0.7% | -8.4% | Jun-06 | -55.7% | Feb-00 | 9 |
| LA | -1.0% | -2.1% | Sep-06 | -38.6% | Sep-03 | 7 |
| San Diego | -1.3% | -1.8% | Nov-05 | -38.1% | Dec-02 | 3 |
| Bay Area | -2.6% | -3.5% | May-06 | -40.5% | Dec-00 | 7 |
| Denver | -1.2% | -2.6% | Aug-06 | -13.6% | Jul-01 | 8 |
| DC Area | -0.1% | 2.7% | May-06 | -27.8% | Apr-04 | 1 |
| Atlanta | -0.5% | -5.8% | Jul-07 | -27.1% | Nov-99 | 7 |
| Chicago | -2.2% | -7.6% | Sep-06 | -32.8% | May-01 | 6 |
| Boston | -1.5% | -1.0% | Sep-05 | -17.9% | Mar-03 | 7 |
| Las Vegas | -1.0% | -5.0% | Aug-06 | -58.1% | Jun-99 | 5 |
| New York | -0.5% | -3.1% | Jun-06 | -23.5% | Feb-04 | 6 |
| Portland | -1.6% | -7.0% | Jul-07 | -28.3% | Sep-04 | 8 |
| Dallas | -0.2% | -1.2% | Jun-07 | -10.0% | May-02 | 8 |
| Seattle | -1.9% | -7.5% | Jul-07 | -30.9% | Jun-04 | 7 |
| 20 City Index | -1.1% | -3.3% | Jul-06 | -32.6% | Apr-03 | 7 |
The West has been much more volatile than most of the East:
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I was surprised to see DC-area prices slip in February:
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The Next Six Months Are Going to Be a Wild Ride
Prices nationally are at the level first reached in Q2 2003, wiping out almost a decade of appreciation. Butthe number of homes sold in March rose by 3.7%, whereas most economists expected only a 2.5% increase.
This is exactly in line with the forecast we published in the Wall Street Journal on February 10, where we wrote that "January and February numbers will be woeful. But...March will be better."
What will happen next? After nine months of falling prices, the next six will probably be up and down. April and early May will soften again -- March new-construction contracts were dreadful, and applications for home-purchase loans just ticked down -- but the summer looks strong to us.
Redfin has been setting records over the past two weeks for accepted offers, with most of that business set to close in June. For the first time in a long time, you hear folks on Wall Street talk about "hefty gains for housing prices over the next 5 - 10 years." Whether this is true or not, just hearing people talk that kind of chatter raises one of my substantial, hairy eyebrows...
In A Falling Market, Bidding Wars
On the ground, a shortage of high-quality inventory still frustrates home-buyers. Rising rents are just starting to push first-timers back into the market, but they're getting blown out by cash buyers, who now account for a record 35% of purchases.
Listing agents continue to under-price properties ahead of the falling market to create bidding wars: in many counties, we're seeing a bizarre combo of month-over-month price drops and sale-to-list ratios above 100%. This tactic started with bank-owned listings, but now it's often the way regular listings are priced too.
As we predicted over and over again, foreclosures began falling in 2010, a trend that continued in the first three months of 2011: by 15 percent from the previous three months, and by 27 percent from the same period last year. Some of this is temporary while banks sort through the robo-signing fiasco, but mostly banks have figured out that they lose less money negotiating with the owner than foreclosing on properties. Shrinking foreclosure inventory is one reason further wrenching drops seem unlikely to us.
Interest Rates at 4.8%, Affordability At 20-Year High
The x-factor is interest rates. Rates on 30-year mortgages rose to 4.9% through most of April, but fell back to 4.8% this week. Because the rest of the economy is recovering modestly while interest rates and prices have mostly stayed low, home affordability is at its highest level in 20 years or more, according to biased sources like the home-builders and the Realtors, but also according to slightly less biased sources, like Wells Fargo and Zillow too.
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We know we sound like a Realtor -- "record affordability!" -- but baby it's a fact. The long-term question --debated even by the great real estate economists Robert Shiller and Karl Case -- is whether real estate will be like groceries, which account for a smaller and smaller percentage of our income over time, or if housing prices rise with income. If real estate is like groceries, affordability doesn't matter much.
We won't settle that issue here, but you can weigh in on our blog, where we post this newsletter for comment. As always thanks for your Redfin support!
Best, Glenn
Glenn Kelman | CEO, Redfin
Glenn Kelman | CEO, Redfin
